David Williams, Managing Director of Rhenus Logistics, explains how using a specialist clearance centre can help UK exporters to overcome customs challenges and capitalise on the growing Russian market.
As the world’s 12th largest economy by Gross Domestic Product, the Russian market offers significant opportunities for UK exporters, despite ongoing political concerns and bureaucratic complexities.
Although it has the smallest population of the BRIC economies, per capita Russia is the wealthiest by a considerable margin and has over 140 million consumers. Its major investment and modernisation programmes and the respect for UK brands among its discerning consumers, mean there is growing demand for imported technology products, as well as retail and luxury goods. The top UK exports to Russia include engineering products, pharmaceuticals, chemicals and consumer goods.
The huge Russian market offers great opportunity for UK exporters, but doing business in the country does have its challenges, not least because of its incredible size. Russia covers one seventh of the world’s land mass and spans 11 different time zones, each with their own geographic, cultural and climatic features (with temperatures ranging from – 30 degrees in the North to sub-tropical heat in the South).
Bureaucratic hurdles and a poor infrastructure further complicate logistics processes, along with complex and time consuming customs clearance procedures. Indeed, many companies underestimate the time and cost required for the preparation of technical data and certification for imports into Russia, as well as the time taken to clear customs.
When goods are imported they have to be kept in a special bonded warehouse under the supervision of customs authorities until they are cleared for free circulation in the Russian Federation and only Russian legal entities are allowed to arrange customs clearance and make payments to customs.
Proper guidance by a specialist freight forwarding company can be invaluable in removing the hassle, time and cost of exporting to Russia. To help facilitate this process for our customers, Rhenus Logistics has built its own customs and logistics terminal on the Belarus/Russian border, located in Smolensk, the first and only one built by an international forwarder in the region.
The customs terminal has room for 400 truck parking places and has its own 2,500 metre squared bonded warehouse for secure storage of goods until they get customs approval. This unique service means we have officers from the Department of Customs Clearance and Smolensk Customs actually working onsite to clear our customers’ good as quickly as possible.
Our investment in this facility supports the aims of the Russian national customs policy, which seeks to relocate customs stations to the outer borders of the country to ease the pressure on traffic in congested urban areas. This will also enable goods to be distributed across the regions, without the need for trucks to make huge, time consuming detours to central customs clearance centres deep in-land.
Our specialist staff at the terminal offer customers a wide range of services from preliminary documentation to reduce customs clearance time, through to the completion of customs clearance, whilst additionally providing support to customers in obtaining required certificates and licences.
Given the ongoing political unrest in the region, security is always a concern for exporters and we built the customs terminal with this in mind, with video surveillance, radiation monitoring and x-ray equipment, to ensure the security of goods at all stages of the storage and customs clearance process.
Some UK exporters may have had concerns about the complexities of working within the Russian market, but the use of a specialist clearance centre like this can make the process much easier for them, saving significant time and cost. It is also invaluable to have someone on the ground in the country, protecting their goods and ensuring they pass through customs as quickly as possible, as well as giving them automatic updates about the status of their cargo.
Following the Brexit vote, there are further complexities to consider once Britain is operating outside of the EU, with concerns that there could be additional costs, red tape and customs considerations for UK exporters. This means it is even more important than ever to seek the advice of a specialist freight forwarding company who has experience on the ground and local knowledge to help companies navigate their way through uncertain waters and unfamiliar procedures.