Logistics: Bite-Size Insights – April 2025

In this edition of Logistics: Bite-Size Insights, we review the recently introduced Freight Crime Bill and consider the differing liabilities for hauliers when acting as a direct or indirect Customs agent.

A new Bill to fight freight crime

Stories of violence against drivers and theft of goods are, regrettably, becoming more mainstream.  This has led to Rachel Taylor (Labour MP, North Warwickshire and Bedworth) presenting a motion for leave to bring in a Freight Crime Bill (the Bill).  The Bill was presented to Parliament on 18 March 2025 and a second reading is scheduled for 20 June 2025.

Ms Taylor stated:

“The freight and logistics sector has become the backbone of the local economy… I want the logistics sector to be something young people in my constituency are excited to be part of, and that means we must tackle freight crime so they can feel safe in their jobs.”

This follows the ongoing problem of a lack of younger drivers wishing to be part of what is seen to be a rather broken industry.  It is estimated that freight crime has cost the UK economy over £1billon since 2020 and Ms Taylor has presented the bill on the basis that the threat to the supply chains is urgent and the government must do more to protect the logistics industry.  This follows the Department for Transport’s pledge to improve truckstops across England, showing that the haulage industry, and the safety of its drivers, is taking the front seat in government policy.

Whilst the issues with freight crimes are, perhaps, obvious, what is less apparent is how theft of freight often goes hand in hand with other forms of crime, such as the gangs that sit behind the thefts, and what happens to the goods once stolen.  There is an ever increasing risk that such goods are being reintroduced into the public market – whether that be stolen food items, electronics, beauty products - all of which carry a serious risk to the public if are not handled correctly. 

One of the focus points of the Bill is to have a separate crime code for freight theft from a vehicle.  This is to ensure that freight crime is correctly recorded and to provide a real sense of the issues within the industry.  Currently, freight crime often gets classified as domestic car break-ins, which is of course a very different type of crime with different ramifications. The hope is that a new freight crime code would allow the police to respond more quickly, with appropriate back up. 

Ms Taylor closed her motion stating:

“Freight and logistics businesses, which quite literally keep our country running, should not have to shoulder regular losses because of cargo theft; the police should not be hamstrung in tackling serious organised crime because they cannot retrieve the data they need to co-ordinate a national freight strategy; and ordinary consumers should not be left to pick up the bill. Organised freight crime gangs have been left to grow for too long, but this simple change should help to stop them in their tracks. It is time we took tougher action on freight crime, introduced a new freight crime code and put these thieves behind bars, where they belong.”

This is a significant move in fighting freight crime and we are sure the haulage industry will be waiting eagerly for the second reading.

If freight crime is reduced, claims are, similarly, reduced.  This results in lower premiums for insured’s and less claim for insurers – a win win for all.

Customs agents – what liabilities do they attract and how?

Hauliers are very familiar with being asked whether they can act as a Customs agent by its customers.  However, do hauliers know the differences between the two forms of Customs agents and what liabilities they may attract? 

The regulations are, as the industry will appreciate, somewhat more complicated following Brexit.  From 1 January 2021 the law governing customs changed from EU Directive 952/2-13 to the Taxation (Cross Border Trade) Act 2018 (TCTA).  TCTA permits a principal to appoint another person to act as a Customs agent.  As a Customs agent, that agent may make customs declarations in the name of the principal, known as a “Direct Agent”, or that agent may make customs declarations in the agent’s own name, which will be known as an “Indirect Agent”.

It is highly recommended that any haulier carefully considers the role in which it intends to act and that the appointment is set out in clear terms in a document confirming the authorisation (often referred to as the “empowerment”) agreed between haulier and its customers.  Indeed HMRC has indicated that such appointment must be in express terms and in writing. The appointment can be open ended covering multiple shipments or limited to a single shipment. 

Section 21(3) of TCTA states,

“(3)        The effect of an appointment of a person as a Customs agent is that anything done under, or otherwise for the purposes of, this Part by, or in relation to, the agent is regarded as done under, or otherwise for the purposes of, this Part by, or in relation to, the principal (and not by the agent)”.

Therefore, as a Direct Agent the Customs agent is acting in the name of and on behalf of “the principal” (i.e. in the name of the customer).  The customer would still be liable for the import duty.  However, if the customer has given clear and accurate instructions to the haulier, and the haulier fails to act in a competent matter which results in an error being made in the customs documentation, the haulier would not be able to rely on the protection of being a Direct Agent.  The haulier, in that scenario, would become jointly and severally liable for the debt.

Section 21(4) and (5) of TCTA states,

“(4)        There is an exception to this rule if a Customs agent acts as an indirect agent ….

(5)          In that case, the indirect agent is liable to import duty in accordance with section 6(1) (and the principal is also liable to import duty in accordance with section 6(3)(a)).”

This means the Customs agent acting as an Indirect Agent will be jointly and severally liable for the payment of import duty. 

Hauliers must be aware, therefore, that being an Indirect Agent carries greater risk in respect of the potential liability for carrying out such customs services on behalf of its customers.

We have set out below the difference between the two roles.

Direct customs agent	Indirect customs agent
The Customs agent acts in the name of and behalf of another party (the customer of the haulier)	The Customs agent acts on behalf of another person but acts in their own name
The party being represented (the customer) is the declarant and is obliged to meet all the obligations arising from the declaration	The Customs agent must maintain a full audit trail with regard to the customs declaration
The declarant (the customer) will be responsible for maintaining the customs records and also for providing an audit trail	The Customs agent is jointly and severally liable for all customs liabilities arising from the customs related transactions
NOTE: If the customer has given clear and accurate instructions and the haulier makes an error, the haulier will become jointly and severally liable for the debt

Who is the customer?

It is important to understand who the haulier is acting for as an agent.  For example, what if the customer is based outside of the UK?  If so, then UK Customs authority (HMRC) will most likely pursue the haulier for the debt as there is no other UK based party to pursue.

Implications of being an importer  

If a haulier acts as an Indirect Agent, the haulier comes within the definition of “importer” under The Customs and Excise Management Act 1979. On that basis, the haulier will be considered to be the “importer” for the purposes of assessing the party with responsibility for completing the customs formalities and assessing where ultimate liability rests for the relevant import taxes.  Being the importer on record means that the haulier will be liable for import duty and import VAT and will bear primary liability for any errors in the submission of customs documentation.

Of course, the haulier may then seek to impose an indemnity on its customers for any such liability,  However, the haulier will, if it is considered to be the “importer”, bear the primary responsibility.  Any such indemnity is only as good as the solvency of the indemnifying party.

Importance of contractual terms

Contractual terms should be agreed to ensure that a haulier is indemnified and protected against a claim for non-compliance with the customs regulations.  If such provisions are not put in place, the haulier could end up with a significant liability to customs with very little recourse (particularly when acing as an Indirect Agent).  Some industry standard terms already have provisions for such liability allocation, for example, the BIFA terms and conditions have an indemnity clause at Clause 20(A).

The contractual terms should also address the details which should be provided by the customer for the purposes of the customs services and specify the consequences are if those details are not provided or if they are provided incorrectly (along with the relevant indemnities). 

It is imperative that hauliers who agree to act in such a role are very aware of the liabilities that being a Customs agent attracts.  It is not uncommon for such services to be added onto standard transport services, however, these ‘add-on’ ancillary services are exactly where a haulier can attract most liability.  Terms and conditions are agreed for the transport itself but with little consideration to the services that may fall outside of those agreed terms and conditions – particularly where industry standard terms and conditions have been incorporated that are simply not appropriate to cover ancillary services. The risk is, therefore, that the haulier opens itself up to a much higher liability than perhaps expected or insured against.

Related item: Logistics: Bite-Size Insights - February 2025