Ukraine Conflict Impacting Logistics

The conflict in Ukraine is already starting to impact logistics across all transport modes, with the potential for more disruption to come.

The most obvious being the impact rising fuel prices are having on costs. Following the UK and US oil ban on Russia and escalating sanctions, many experts are predicting that oil may rise to a record high of $200 a barrel by the end of this month. This would be double the cost of the beginning of this year.

UK & European Road Transport

We are regularly receiving updates on fuel surcharges and/or increased costs, due to the hike in fuel costs. The situation remains very fluid and pricing could potentially change weekly while hostilities continue.

Ocean Freight

Bunker rates have increased by one-third already this month, which will impact ocean freight costs – especially on longer routes such as Asia/Europe round trips. Lower demand from Asia had seemingly pointed towards an upcoming reduction in rates, which may be curtailed by the soaring fuel costs.

Air Freight

Fuel is also impacting air freight prices, which are generally on the rise since the conflict started. No fly zones over Ukraine, Belarus, and parts of Russia are also impacting some flights to and from the Far East.

Rail Freight

Rail freight services, to and from China, generally travel through Russia and either Ukraine or Belarus. While some services are operational, many shippers and importers are avoiding this mode of transport for fear that shipments may be snagged due to sanctions.

Needless to say, all services to and from Ukraine, Russia and Belarus have been impacted by the conflict or the sanctions.

The Simarco team continue to monitor the situation closely. In the meantime, should you require further information, then please do not hesitate to contact us via sales@simarco.com.

Championing International Women’s Day

It is International Women’s Day today, a global day celebrating the social, economic, cultural, and political achievements of women. To mark the occasion, we would like to thank and honour the many women in our organisation who continue to play such a critical role in our ongoing success.

One such trailblazer in Simarco is paving the way for more women to move into HGV driving, as she determinedly moves towards gaining her own HGV1 driver’s license.

Laura (pictured below) is aiming to be one of the 2% of heavy good drivers that are women.

Laura joined Simarco in November 2021 to work in transport as a van driver, although her intention was to achieve her class 1 driving licence.

After just a few months, Simarco recognised Laura’s ambition and have worked with her to help her complete her ADR course and achieve her theory tests for Class 1 driving.

She is now receiving advanced driver training, which starts with Class 2 driving theory and practise and progresses to Class 1.

Laura has always had a passion for driving and Simarco’s support alongside her own determination has led to her being close to achieving her goal in the next few months.

With the industry very short of drivers, increasing the number of women in HGV1 cabs could be critical to the global supply chain over the coming years.

Laura remains extremely grateful for the support she has received from Simarco, and is a great advertisement for other women considering a driving career.

Simarco International Limited has received an award from Essex Limited.

Essex Limited measures the performance and success of businesses throughout Essex.  There are three categories:

• The Top 100 using publicly available accounts of the county’s biggest largest privately owned companies based on turnover within their principle trading address in Essex.
• Growth 20 – the top 20 businesses with the highest percentage growth above £10m
• Most profitable Businesses.

Simarco was delighted to receive their award in The Top 100 ranked at 57.

Fund raising for Children in Need

Our team in Stoke had fun raising money for Children in Need 2021 and the many fantastic causes they support.

We are a finalist for the 2021 BIFA awards in the European Logistics Category.

“Simarco has been awarded a “finalist” in the BIFA 2021 Awards in the European Logistics Category.  We are delighted to be recognised in this category especially since overcoming many challenges during 2020 and 2021.  This category takes account of the changes brought about by leaving the EU and as a finalist we will be judged on what we have done to ensure continuation of service and customer compliance with new procedures.  We are confident our agile approach to ensure our service offering throughout Europe was executed proficiently as well as providing guidance, advice and support to our customers throughout Brexit.”

Simarco receive BRCS Accreditation

We are delighted to announce that Simarco has recently received BRC Accreditation, Grade AA; Globally recognised standards for the storage and distribution of food, packaging and consumer products.  Along with our AEO and ISO standards, this demonstrates Simarco’s full commitment to the continual safety and quality initiatives we can offer our customers giving them the confidence that their goods are in the best of hands.

If you are importing from Europe are you aware of the customs procedure changes that will affect your business from the 1st Jan 2022?

Customs regulation changes from the 1st January 2022 you can no longer delay supplementary declarations. These must be completed at the time of importation.

For businesses currently using delayed declarations for their European imports you need to prepare to make supplementary declarations on time to comply with the new regulations.

You should check with your forwarder to ensure they have completed the required supplementary declarations for goods you have already received?

If you have any concerns regarding European Import clearances, we would be delighted to discuss your requirements and see how we can help you.✓  At Simarco we are AEO-C approved and authorised consignee & consignor, meaning we are a trusted trader with HMRC and allows a more efficient import/export system for all parties involved

✓  We complete all European declarations in-house

✓  With our inland ETSF customs facilities in Witham, Essex and Stoke-on-Trent, it allows us to avoid unnecessary delays at the ports of importation

✓  We have a team of 34 people dedicated to European customs clearance

✓  Using another forwarder? We can still customs clear your goods on your behalf

✓  We can clear at all UK ports if your goods must clear upon entry into the UK

✓ With our inland customs badges, we can clear your goods if presented to third party ETSF facilities

Are the products you purchase from overseas dutiable? If yes, are you interested to know more about deferring the duty payment?

✓  Customs Freight Simplified Procedures, also known as CFSP, was introduced by HMRC in 2001 and is an alternative to traditional full import declarations at the time of goods arrival

✓  The scheme allows faster release of goods from ports, airports and inland customs facilities, subject to anti-smuggling checks

✓  Cash flow incentive – The import duty and VAT (if not using Postponed VAT Accounting – PVA) do not need to be paid until the Supplementary Declaration is submitted. This must be completed within the same month as the goods withdrawal from the Customs warehouse. Please reply to chris.bentley@simarco.com if you would like our customs experts to provide further service information in this specialist area.

AA-rated BRC Accredited Warehouse Facility

Simarco’s final BRC audit takes place in August.  The provisional audit has shown we will obtain an A-Rated Accreditation.  We are on course to improve this to AA status when the final audit take place.

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AEO-C status

Simarco is pleased to advise that our AEO-C status has been Revalidated

AEO-C Status means that HMRC have rigorously tested and inspected our Customs Clearance procedures and certified that Simarco meet their highest standards for accurate, professional Customs Clearances.

Now, more than ever before, Companies trading Internationally need an accurate, high quality company to handle their shipping and Customs Clearance requirements.

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One to watch – Simarco Worldwide Logistics

16 April 2021

Interview with Trevor Scott, Managing Director

Simarco Worldwide Logistics – Established in 1997, Simarco is a prominent, mid-sized privately held forwarders operating in the UK, generating revenue of £50m + annually. Recently highlighted in the Sunday Times Profit Track 100, Simarco’s growth is not going unnoticed.

Providing international Air, Ocean and Road freight forwarding services, local UK distribution and warehousing solutions, Simarco manages cargo of all descriptions with a particular expertise in the retail, automotive and industrial markets. With offices located across the UK, they have five distribution centres offering more than 320,000 sq.ft of high security warehousing, as well as an owned fleet of vehicles that provides clients with a nationwide distribution service.

This thought piece will discuss how Simarco navigated the challenges of Coronavirus and the Brexit transition – events affecting many of our connections in the last year.

Coronavirus

Given Simarco’s focus on European groupage, the Covid outbreak in March 2020 had an immediate impact as Europe went into lock down. By the end of April, EU volumes were down by 50%, but due to an agile and flexible approach by the management, these numbers have rebounded strongly over the course of the year.

Simarco addressed the challenges headfirst, winning numerous Air Freight and Warehousing contracts, handling and distributing supplies globally of Personal Protective Equipment culminating in being awarded the prestigious BIFA Air Freight Services award in 2020.

With the UK’s impressive vaccine rollout aiding the economic recovery, Simarco are expecting demand to surge, as the hospitality and retail sector looks set to reopen in the UK. This resurrection is likely to drive greater volume through their existing contracts.

Many people will ask whether Covid accelerated the death of the high street, given the shift towards Ecommerce. Simarco believe this trend will continue, but a major issue prohibiting the pace of this change is the complicated customs formalities following Brexit, which is affecting the flow of goods.

Given the added complication, Simarco are seeing greater bulk shipping into regional hubs of the UK for onward delivery into the EU. Simarco are servicing this via their contract logistics warehouses located throughout the UK and Netherlands, as a result of the rise in B2C requirements.

Brexit

As the Brexit deadline passed in July 2020, Simarco activated contingency plans and came out the blocks early in terms of recruitment. Taking a regional approach, 20x customs staff were hired, and a further 10x administration & finance. By October 2020, another 20x new staff members were recruited and trained across the various branches, in preparation of what was to come.

Even though this was 3 months in advance of the Brexit deadline, it enabled Simarco to stress-test systems, contact regular shippers and delivery points to obtain information for customs clearances, as well as attuning staff to the culture and pace of the business.

From mid-October the Board of Directors started to work full time on engaging with customers virtually, and provided advice in terms of paperwork, commercial terms, and a range of options available to ensure their businesses would have limited disruption.

Simarco prepared for the worse, planning for a “No deal” with full duty on exports and imports and the impact that would have on warehouse capacity as well as cashflow. When the deal was completed on Xmas Eve, like the entire UK logistics industry, the Simarco team were relieved to see that this trade deal would limit duty payable on some goods of non-EU origin.

The drastic change in procedures in the UK and the EU simply left businesses in the dark. It is well documented by the industry and business, that January was nothing short of a disaster. Like every other logistics provider, Simarco thought they had planned for every scenario, but what came to fruition was unexpected and businesses simply were not ready.

Following a turbulent start to 2021, Simarco found smarter ways of working in February both internally and externally. Remodelling their internal processes by improving data flow through integration of systems, as well as providing additional training for staff. As customers and EU partners were starting to understand, Brexit was not just an issue for the UK logistics industry, but for everyone in the supply chain and they all had to play a part in moving goods in a compliant and legal manner.

Where are they now?

The trading trends are as Simarco had forecasted, lower UK export volumes with an increase in the number of units per job, as customers ship more cargo less often to reduce costs. UK imports have increased and look to remain buoyant until full border controls are in place. As a pre-cursor, UK exports have faced full border controls in Europe since January 2021 so when the change also happens in the UK, Simarco are in a positive position, knowing what to expect.

Moving into April, the situation has stabilised, and customers have greater knowledge, expectation and understanding of the importance of logistics companies within their supply chains.

These new challenges have further elevated our industries importance to both exporters and importers in the UK and Europe and Simarco will continue to embrace challenges by investing in people and processes.

Published on April 16, 2021

Luke Mitchell

Head of M&A Deal Origination at Connect Corporate Finance