The changes in customs law due to Brexit stand to have a significant impact on Honda Motor Europe, however our partnership with Customs4trade has allowed us to prepare in advance. By expanding the UK import/export customs logic in CAS, which will, together with their Special Procedures Module for Customs Warehousing, increase our cash flow optimisation for future EU imports into the UK.
Shaun Hall
Challenges
Due to changes in the supply chain and the UK’s exit from the EU, increased duty costs threatened the competitiveness of a new worldwide car model, and new Special Procedures authorisations were required. The increased costs were perfectly avoidable but keeping up with changing legal requirements presented a huge administrative workload that could not be solved with spreadsheets and outsourced customs formalities.
Solution - Inward Processing and Customs Warehousing
Honda were looking for a solution to avoid paying unnecessary duty costs for materials that were sourced from other countries and processed in the Honda plants for vehicles that will then be exported. They implemented both Inward Processing and Customs Warehousing within CAS, allowing them to avoid paying full duty on materials and instead calculating the sum of the duties based on origin and the final destination. By using the IP model, Honda can prevent human interaction with declarations for each car part processed in real-time, keeping the car plant producing at maximum speed.
With the Customs Warehousing module, customs declarations are automated to and from Honda’s UK Customs Warehouse, allowing them to keep track of their customs stock, track movements for reporting to the customs administration, and optimise customs duty costs.
Their Item Master Data in CAS is fully in sync with internal ERP systems and commodity codes get a TARIC check on a daily basis in order to ensure full legal compliance. CAS allows Honda to manage declarations using an exception-based approach and only take action on the specific subset of customs declarations that need special attention.
Since CAS has already generated significant savings in terms of administration and customs duties for our Inward Processing (IPR) flow, we were confident that CAS could realise great things for our Customs Warehouse project as well.
Shaun Hall
Reporting
Increased cash flow optimisation with a higher margin per car, gaining a competitive edge. Reporting functionality to increase visibility and control of all customs and trade data
Scalability
Flexibility and scalability in case of changes in the goods supply chain and FTA preferential rates are applied automatically.
Automation
Fully automated and insourced declaration process, without increasing Honda’s customs and international trade team
Reporting
Increased cash flow optimisation with a higher margin per car, gaining a competitive edge. Reporting functionality to increase visibility and control of all customs and trade data
Scalability
Flexibility and scalability in case of changes in the goods supply chain and FTA preferential rates are applied automatically.
Automation
Fully automated and insourced declaration process, without increasing Honda’s customs and international trade team