Any shipper that’s ever operated in the EMEA region can attest to the complexity of this endeavor. Made up of Europe, the Middle East, and Africa, the region is comprised of more countries and a greater total landmass than any other business region. The sheer scale is intimidating enough—but that’s only the tip of the iceberg when it comes to the region’s shipping challenges.
Understanding what’s at stake is essential—as is being prepared. For shippers considering expanding into this market, here are some of the biggest challenges that lie ahead.
A patchwork quilt of different languages and cultures
Arguably, no other region is as varied and complex as EMEA, at least in terms of the languages and cultures found within its far-reaching borders. EMEA spans three continents and is home to more than 2,000 native languages. That can create all manner of difficulties for shippers, who may need to find local translators when negotiating deals, sharing documentation, and fielding requests.
The region’s business cultures are equally diverse, with vast differences from one country to the next—and, often, one county to the next. Within the UK, for example, shippers might sour a relationship if they approach business in London the same way they would further north.
To navigate this region successfully, shippers cannot take a copy-paste approach from one country to another. Shipments need to be designed and executed on a local level, with careful thought and attention put into building relationships and gaining trust.
The obstacle course of VAT Management
Complying with value-added tax (VAT) legislation in EMEA is another core challenge for many shippers entering the region. Since the region spans so many countries across multiple continents, anyone expecting consistency will be disappointed. And pinpointing exactly what is owned in each country is harder than it looks.
The European Union (EU), for example, has standard rules on VAT—but each of its 28 member countries applies those rules a little differently, sets its own rates, and may or may not allow VAT returns to be filed online. In Africa, meanwhile, VAT legislation can be very unclear, with the multiplicity of VAT systems creating countless stumbling blocks for unsuspecting shippers to trip over.
To avoid paying penalties and additional tax, its crucial that shippers gain a nuanced understanding of what they should be paying—or partner with a provider that understands the legislation and can help them remain compliant.
No clear answers about Brexit—and a snap election in the mix
Since the UK voted to leave the EU in 2016 in a move that was dubbed “Brexit,” shippers in EMEA have faced a logistics landscape marred by uncertainty and unease. Three years on, it’s still unclear what exactly Brexit will look like, or what it will do to logistics in the region.
Brexit was initially scheduled to take place on March 29, 2019, two years after then-Prime Minister Theresa May triggered Article 50, which kicked off the formal withdrawal process. With no deal in sight, shippers were left to speculate on what impact Brexit would have on issues like demand, operating costs, and border control.
That exit date was later pushed back to October 31, 2019—then pushed back again to January 31, 2020. And since the UK is now facing a snap election, with key parties sporting wildly opposing views (or no clear position at all) as to what should be done about Brexit, what will happen next is anyone’s guess.
One thing is certain though: freight audit is more important in the region now than ever before. Many experts warn that the UK’s withdrawal could lead to significantly higher shipping costs in the region and a lot more paperwork, particularly in the case of a no-deal Brexit. Whatever happens, it will be vital for shippers to gain better control of their transportation spend—and the visibility provided by freight auditing will be a key component of that.
Challenging—but not insurmountable
EMEA’s complex logistics landscape is not to be taken lightly. We should know—we’ve spent 60 years gaining deep expertise in the region and learning all its ins and outs. And with a company-owned-and-operated facility in Limerick, Ireland, we’re immersed in these challenges every day, so we know how to help our clients overcome them.
Over the next few weeks, we’ll dive deeper into each of the issues touched upon above, exploring what shippers can do to navigate EMEA’s logistics challenges successfully and bolster themselves against a future of uncertainty. Until then, find out more about CTSI-Global’s industry-leading logistics solutions in EMEA and beyond by contacting us today.