CROSS-BORDER MASTERY
Compliance as Competitive
Advantage
Global trade has faced its fair share of headwinds over recent years. Carriers have been buffeted by tariffs, trade rows and a tsunami of incoming regulation. It is the relentless pace of regulatory change that is so challenging for companies, adding layers of compliance, cost and confusion. And this is hitting at a time when there is more protectionism, more conflict and war, and a competitive landscape that is constantly shifting, be it increased M&A activity or the growth dynamics of the marketplace giants. For many, the biggest impacts on day-to-day cross-border business are the result of constant regulatory pressure. According to Wim van de Sande, Director, Procurement and Business Development at PostNL, it is not just the number of regulatory rules, but the pace of change, with short implementation times compared to historic norms. Changes roll in from different countries in a relentless wave.
For many, the biggest impacts on day-to-day cross-border business are the result of constant regulatory pressure. According to Wim van de Sande, Director, Procurement and Business Development at PostNL, it is not just the number of regulatory rules, but the pace of change, with short implementation times compared to historic norms. Changes roll in from different countries in a relentless wave.
You can’t see [cross-border compliance] as one big project, like Brexit, for example. You really have to organise in a completely different way to adapt to these continuous changes.
Wim van de Sande
Director, Procurement and Business Development,
PostNL
Companies are now adapting to the EU’s new Import Control System 2 (ICS2), which requires carriers and businesses to submit detailed electronic data about goods before arrive in the EU. Then, later this summer, the EU removes the €150 duty-free exemption for low-value goods, making all imports subject to customs duties and VAT. This follows the US, which eliminated its $800 exemption in 2025. Companies must also ready for eFTI as EU freight documentation goes digital. Ahead of the system going live in July 2027, companies need to get their digital operations in order and, while longer term eFTI could bring benefits and reduce the administrative burden, the short term impact is yet more change, more compliance demands and more investment in systems to accommodate the new rules. This is all part of a rising tide of digital regulation, including UK Platform Reporting, already in force and which requires digital platforms like eBay and Vinted to verify and report the income of UK-based sellers to HMRC. In the EU, the VAT in the Digital Age (ViDA) package, designed to modernize VAT rules, combat fraud, and reduce administrative burdens for businesses operating across borders, will be rolled out between 2027 and 2030 onwards. The demands of meeting this regulatory workload haven’t put dent in trade, with cross-border volumes continuing to grow even as the complexity of crossing those borders explodes.
‘The compliance burden is increasingly heavy, which is why systems automation is now a critical path item to stay in the game. APIs that connect stakeholders in real-time can ensure pre-clearance to reduce delays, although data quality will increasingly be under scrutiny as flawed data will act as a barrier to clearance. The concern, of course, is that some companies will find alternative routes through the regulatory maze, leveraging different business models, different jurisdictions and different structures. Major Chinese e-commerce platforms, such as Shein, Temu and AliExpress, are increasingly establishing logistics hubs inside the EU to handle local inventory and deal with VAT and customs in bulk, moving away from direct shipping to mitigate tight VAT regulations and enable faster delivery. Cainiao Smart Logistics Network, for example, has sited a logistics hub in Europe at Liège airport, supporting its ‘Delivery in 5 days’ promise while also shifting from B2C to B2B2C, and avoiding per-parcel duties entirely. ‘By the players going closer to their markets to do local fulfilment, you see them exploring different routes of customs clearance, and it would seem that B2B2C is here to stay in order to avoid line item declarations, which attract quite high costs,’ said Wim van de Sande at PostNL. Europeans, however, have less room to manoeuvre. ‘There isn’t a level playing field, with the different ways of importing things and then penalizing the postal flows,’ said Jean-Paul Forceville, Director of European and International Relations of La Poste. According to Grzegorz Szaton, Director, Group Delivery Operations at Allegro, this is part of a wider shift in supply chains, from global to local hubs. ‘This is the game, between the cost and the speed,’ he said. ‘Some customers expect the parcel very fast, and some expect it very cheap and these regional hubs can combine both.’
Here is Tom Killeen, COO at THG Brands discussing the choice of automation
Companies chasing the right logistics matrix to avoid the complexity and cost of shifting tax and customs rules can be incredibly fast and flexible. Yet this is a constantly moving game, and it’s played on a treadmill: by the time companies have automated ICS2, eFTI changes the game, and once that is resolved, another regulation emerges, which is why automation will be important to streamline and optimise compliance.
Yet regulatory compliance doesn’t have to be just a cost centre. According to Grzegorz Szaton of Allegro, regulation can be an opportunity to rethink processes, technology and operations. ‘We need faster decision-making processes in Europe, and to be prepared to think outside the box,’ he said, noting that regulation can sometimes be the prompt that is needed to make the change.
Indeed, external challenge can sometimes be the catalyst for much-needed change. The postal duty paid product (PDDP), for example, which takes care of VAT and customs duties prior to delivery, was developed at speed in response to the removal of the $800 de minimis threshold for US imports.
Regulation may weigh heavily on the industry, adding in friction and costs, but it can also be a spur to improve data, invest in automation and encourage innovation to work smarter and faster, whatever the future may hold.
Regulation may weigh heavily on the industry, adding in friction and costs, but it can also be a spur to improve data, invest in automation and encourage innovation to work smarter and faster, whatever the future may hold.
Get in touch
Ellie Kennedy
Senior Business Development Executive,
Leaders in Logistics
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