Changes in the logistic environment

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Changes in the logistic environment – consequences for the international supply chain, trade and customs

A report on a session of the International Commerce and Distribution Committee at the IBA Digital Operations Conference in Hamburg 

Thursday, 14 November 2019

Session Co-Chairs

Judith Alison Lee  Gibson Dunn & Crutcher, Washington DC; Newsletter Editor, IBA International Sales Committee

Guillermo Sanchez Chao  Chevez Ruiz Zamarripa y Cia, Mexico City; Senior Vice-Chair, IBA International Trade and Customs Committee

Speakers

Robert Ernest  Arent Fox, Boston, Massachusetts

Nashielly Escobedo  CEO, Confederacion Latinoamericana de Agentes Aduanles AC, Mexico City

Alan M Rhode  Taxmen Ltd, London

The session gave important insight into how logistic-related technological advancements are defining trade topics, not least because Hamburg is one of the global leaders in this service sector. In the first presentation Robert Ernest gave outstanding detail on the dozens of participants in the global network of a manufacturer and end-user distribution channels and how intermediaries are increasingly disrupting the market, from the traditional second-party logistics (2PL) supply-chain model to the so-called 3PL and 4PL models, which offer services of consolidation, real-time tracking, warehouse management and multimodal transport. He described how many companies have grown into this ecosystem, as well as the immediate 5PL disruption in which Amazon is taking the lead by handling all of the logistics in a product through control from the moment it is an out-of-factory product to when a driverless vehicle or even drone can deliver it to the end customer, which is also directly connected to an Amazon digital platform.

Alan Rhode went on to give a detailed explanation of ‘the three pillars of the European Union 2020 tax reform’, referring to the change in origin countries’ VAT, which means that this tax will be paid at the consumer destination. Marketplaces (eg, Amazon and eBay) will now need to collect VAT and will be considered to be sellers of good for tax purposes.

Judith Alison Lee gave a formidable speech on the importance of making sure that the correct data is transmitted along with the goods, with Guillermo Sánchez in the opening and closing remarks of the event encouraging participation of the attendees.

Overall, not only did this part of the event help to connect manufacturing-related topics with the challenges of suppliers and carriers, but also give an insight into the many intermediaries that we take for granted most of the time and that are playing an ever increasing role in the logistics market.

We hope that these participants become more involved in the activities of the committee and are grateful for their role at the conference.

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