Customs Compliance: What you didn’t know about the flower industry
The world of Customs Compliance is a necessary but often overlooked component of importing and exporting goods, especially when it comes to perishables like flowers, due to the high economic value and the need to protect European flora and fauna.
For every bunch of flowers bought at a supermarket, a shipment has gone through stringent Customs and Phytosanitary checks to ensure safety and security, and the blooms would not reach the stores without Customs staff doing their jobs.
In today’s climate with political issues such as Brexit and the ongoing security issues on international trade lanes, Customs officials are kept incredibly busy.
Jeroen Borst, Manager Customs Airfreight at Kuehne + Nagel, talks about how the use of data is transforming the nature of Customs Compliance and the shipment of flowers, and how Brexit is revealing opportunities to improve data sharing for the benefit of the European import and export market.
How does Customs Compliance work in the flowers supply chain?
Flowers are considered a perishable product and there is a lot of pressure on the supply chain for them to be shipped quickly while also conducting the relevant Customs checks. For example, a lot of flowers come from countries that are known for drug production and therefore we have to ensure that shipments are fully inspected before they can be cleared by Customs.
How will the supply chain be impacted by Brexit?
Some of the flowers that are imported into the Netherlands are sold at auction and exported again to other countries, including the United Kingdom. Brexit, especially a hard Brexit, will impact the supply chain because there will be inspections at the border resulting in deliveries being delayed. As flowers are a time sensitive product this will impact the quality for the end consumer.
From a customs perspective, what is the biggest challenge for the flower supply chain right now?
The biggest challenge right now is that customers are becoming more aware of the supply chain and how flowers are transported. As a result, they are demanding more information about the temperature of flowers during transit or if they are being shipped with food products like bananas that can cause the quality of flowers to deteriorate. In the coming years, we expect there to be an increased focus on traceability, especially on Fair Trade and organic goods to reassure customers that the product meets their expectations.
What is the biggest opportunity?
Brexit is providing an opportunity right now because it is forcing different parties along the supply chain to collaborate and share data in a positive way so that we can make improvements.
How is the use of data transforming the supply chain? Are there any privacy concerns?
Today, there is plenty of evidence demonstrating the positive impacts of using data, such as Blockchain, but many people are still afraid of it. In the supply chain, data is currently being used on the container level but not yet on the item level. The biggest problem so far is that some parties are reluctant to share data, but we all need to work together for the benefit of the supply chain. For example, the Holland Flower Alliance (HFA) is willing to share data with the aim to establish a data pipeline to improve trade compliance and the overall performance of the supply chain. The HFA is leading the way when it comes to collaboration and the flower supply chain is being strengthened as a result.
Tell us about your work with Erasmus on the Kenya to Amsterdam trade lane.
Last year I did research with the Dutch Customs Authority and the Dutch Consumer Health Authority on the Kenya to Amsterdam trade lane. We analysed which products are shipped on the route and the quality of the information available, such as status updates. We then looked at how we can improve the data quality by creating incentives for data sharing. For example, a positive incentive could be paying lower rates of a certain percentage for sharing specific data such as purchase order information, or actual loading information. Another possibility could be a penalty such as additional fees for not sharing necessary data. If there was a model of incentives, we could use it to encourage more parties in the supply chain to share data.
How important is the flowers industry to Kuehne + Nagel?
The business of flowers is very important to Kuehne + Nagel and we are the global market leader. Flowers are considered a ‘quick product’ because they have a short life span. Our ability to effectively handle the flower supply chain demonstrates our expertise in perishables.