Demand for freight, higher rates and quarantine rules blight international trading. Despite many of us being stuck at home due to lockdown measures in various parts of the world, working in the international used clothing and textile processing industry in 2021 cannot be described as uneventful.
Just about every exporter has to grapple with the current crisis in the freight industry. For the last year, the Covid-19 pandemic has resulted in loads being quarantined in ports for weeks at a time, leading to a shortage in the supply of containers. Freight companies are understandably trying to ensure that the containers they can get hold of are being sent to ports where there is the most demand. It means shipments are frequently being diverted on route to de facto hub ports where the containers are again often delayed for several weeks.
In one reported case a shipment of used clothing that departed the UK on 5 December 2020 was diverted to Antwerp where the container was quarantined for four weeks before being diverted to Algiers where it is now sitting. This container is not expected to reach its final destination until March. Normally such a shipment would take about four weeks, not 12 or more.
Freight rate hike
However, it is not only the unacceptable delays that merchants have to cope with but also the severe hike in the costs of shipping. With demand for containers outstripping supplies, costs have skyrocketed. One estimate suggests that the cost of shipping to Pakistan from Europe has risen by over 130% in the last 12 months whilst the fees for shipping to Africa have risen by over 50%. These are costs that our customers struggle to meet and suppliers are taking the hit.
On top of this, European traders are coping with the new UK/EU trade deal agreed at the 11th hour and 59th minute, just before the UK left the single market. Nobody had sufficient time to study the thousands of pages of documentation ahead of the implementation.
One issue that has come to the fore is the correct classification of ‘country of origin’. Under the agreement, products from the UK can be exported into the EU tariff-free if the UK is the country of origin and it is declared correctly. Indeed, the deal includes a clause which specifies that waste produced in the UK can be exported under the preferential zero rate for reuse and recycling.
However, it seems that some customs officials and others have a problem accepting that used clothing products from the UK are actually produced in the UK and that the country where a garment was produced before it was sold in the UK is irrelevant. This is even the case if a label on the clothing states the original country of manufacture.
Trade deal breach
The fact is that when a new item of clothing is imported into any country, it must be done so using one of hundreds of different product codes for such garments. Typically, it is purchased by a consumer and worn for years before being passed onto several other consumers then deposited for reuse or recycling – where it may even be classed as waste and moved out of the waste definition. When the used clothing is then exported, it must be done so using a specific product code for worn clothing and worn textile items (6309). In other words, these items have legally become a new product, albeit a used clothing/textile product.
What this means in the case of the EU/UK trade deal is that second-hand used clothing/textile products coming from the UK must have the UK declared as the country of origin. To do otherwise would be legally incorrect. The same applies to second-hand clothing shipped from any EU member state to the UK.
The fact is that if a customs authority refuses to accept shipments of used clothing with the UK correctly recorded as the country of origin, then this in breach of the EU/UK trade deal. We implore the EU and the UK Government to get their heads together and resolve this absurd and totally unnecessary situation without further delay.
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