{"id":10897,"date":"2020-12-16T17:19:45","date_gmt":"2020-12-17T01:19:45","guid":{"rendered":"https:\/\/www.qad.com\/blog\/?p=10897"},"modified":"2023-01-18T17:20:44","modified_gmt":"2023-01-19T01:20:44","slug":"ireland-the-eu-the-uk-and-post-brexit-parcel-shipping","status":"publish","type":"post","link":"https:\/\/www.qad.com\/blog\/2020\/12\/ireland-the-eu-the-uk-and-post-brexit-parcel-shipping","title":{"rendered":"Ireland, the EU, the UK and Post-Brexit Parcel Shipping"},"content":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10898″ img_size=”full”][vc_column_text]Parcel shipping between the EU and the UK is likely to become a lot more complicated after 31 December, particularly for Ireland. In this QAD Precision Report, we look at what to expect.<\/span><\/i><\/p>\n

Parcel carriers in the European Union and the United Kingdom have been hit with a double whammy this year. First, of course, was the surge in e-commerce volumes caused by the pandemic and subsequent lockdowns. After that came an incredibly busy peak season in November and December.<\/span><\/p>\n

Governments across the EU have allowed some retail stores to trade. Others had to close in response to partial or total lockdown measures aimed at curbing the spread of the coronavirus. Whatever the status of physical retail across the EU and the UK, many consumers preferred to order holiday items and gifts online. With that came skyrocketing parcel volumes.<\/span><\/p>\n

This would have been challenging enough. However, Brexit has added a whole new layer of complexity to parcel carrier operation.<\/span><\/p>\n

What\u2019s the Brexit Deal Status?<\/span><\/h2>\n

There <\/span>may be<\/span><\/i> a post-Brexit EU\/UK deal on trade and security. Maybe. Possibly. Most likely. At least that is what the EU\u2019s chief negotiator, <\/span>Michel Barnier said on Monday<\/span><\/a>, 14 December.<\/span><\/p>\n

Earlier today, Wednesday 16 December, Ursula von der Leyen, the President of the European Commission said that there was <\/span>\u201ca path to an agreement.\u201d<\/span><\/a> However, she also noted that this did not necessarily mean that a deal would be concluded.<\/span><\/p>\n

These are positive indications. But it is worth bearing in mind that last week, <\/span>a hard Brexit with no deal seemed<\/span><\/a> to be inevitable.<\/span><\/p>\n

The situation is, in a word, <\/span>fluid<\/span><\/i>. At this stage, it seems anything could happen.<\/span><\/p>\n

Brexit and Cross-Border Retail E-Commerce<\/span><\/h2>\n

It is true to say that Brexit will impact any EU shoppers who wish to purchase goods from the UK. Brexit will likewise affect UK consumers should they shop online at EU e-commerce stores.<\/span><\/p>\n

However, shoppers in Ireland are likely to feel the brunt of the new rules far more keenly than those in the rest of the EU. Why? Because <\/span>70 percent of all Irish online purchases are from the UK<\/span><\/a>.<\/span><\/p>\n

There are a number of reasons for this. Many of the most popular UK brands and retailers have a presence on Irish high streets. As a result, Irish consumers trust them.<\/span><\/p>\n

Despite this, very few have dedicated Irish e-commerce stores. Distribution centers used to replenish bricks-and-mortar stores are often separate to e-commerce operations as well.<\/span><\/p>\n

The high percentage of e-commerce packages coming to Ireland from the UK\u00a0 is also due to the fact that Amazon does not have a dedicated Irish marketplace. It is only in the last few weeks that Amazon has opened Irish warehouses. This is presumably, at least in part, a response to Brexit. However, Irish online shoppers must still make their purchases through the company\u2019s UK marketplace \u2014 ironic, since Amazon has its EU headquarters in Dublin.<\/span><\/p>\n

UK online shoppers will also be more impacted than those in the rest of the EU. Despite a plethora of homegrown options to choose from, UK shoppers like to shop cross-border too. In 2019, <\/span>50 percent of UK consumers<\/span><\/a> made at least one cross-border purchase.<\/span><\/p>\n

VAT and Customs Duties<\/span>\u00a0<\/span><\/h2>\n

If the two sides do not reach a deal, VAT and customs charges will make it significantly more expensive for EU shoppers to purchase goods from UK stores and vica versa.<\/span><\/p>\n

Even if the two sides strike an eleventh hour trade agreement, it is as yet unclear whether online purchases under a certain value will be exempt after the end of the transition period.<\/span><\/p>\n

Since Irish consumers do most of their online shopping from UK websites, let\u2019s take Ireland as an example. As things currently stand, <\/span>goods priced at less than \u20ac22 will be exempt from extra charges<\/span><\/a>. However, that amount includes shipping, delivery, insurance and handling charges as well as the cost of the goods themselves. Once a purchase passes the \u20ac22 threshold, 21 percent VAT will be due.<\/span><\/p>\n

Anything valued at more than \u20ac150 \u2014 including shipping costs \u2014 will be subject to both VAT and customs duty. The duty rate will depend on the type of items purchased. All these additional charges could <\/span>increase costs by up to 40 percent<\/span><\/a>.<\/span><\/p>\n

This is because goods that were previously freely circulated, will now become imports and exports. E-commerce purchases will require customs clearance, along with commercial invoices, commodity codes and other documentation.<\/span><\/p>\n

It is worth noting that most online purchases will use a Delivered Duty Unpaid (DDU) carrier service. That means that consumers will need to pay any VAT and customs duties to the carrier before they receive their goods.<\/span><\/p>\n

Parcel Carriers and Brexit<\/span><\/h2>\n

Parcel carriers have been preparing for Brexit. However, like everyone else, carriers have no idea what kind of Brexit they are likely to be dealing with.<\/span><\/p>\n

Again, Ireland is likely to be impacted more than any other EU country. This is because goods traded between Ireland and the rest of the EU were largely transported via the UK\u2019s land bridge.<\/span><\/p>\n

In early December, DHL Express Ireland emailed customers warning that the DHL Economy Select (DDI) Service will temporarily pause after 29 December to facilitate the free movement of goods until 31 December. The service will resume on 4 January. However, from this point forward all goods entering the UK will need customs processing.<\/span><\/p>\n

From 4 January 2021, this service from DHL Express Ireland will also bypass the UK land bridge when goods are going to mainland Europe. This is to avoid potential delays, although it will add approximately 48 hours to transit times.<\/span><\/p>\n

Similarly, <\/span>DPD in Ireland has developed direct routes to mainland Europe<\/span><\/a>, bypassing the UK land bridge. DPD has also established new customs warehouses in the Republic of Ireland. The carrier also plans to create similar facilities in Northern Ireland.<\/span><\/p>\n

Companies shipping goods from Ireland to the EU, or from the EU to Ireland are likely to face increased transit times. In early December there were already reports of long lines of <\/span>trucks backed up at critical ports such as Dover<\/span><\/a>. There are fears that queues could be up to 100 kilometres long after the end of the transition period.<\/span><\/p>\n

Whether or not the UK land bridge becomes a viable route at some point again in the future, remains to be seen.<\/span>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_single_image image=”10898″ img_size=”full”][vc_column_text]Parcel shipping between the EU and the UK is likely to become a lot more complicated after 31 December, particularly for Ireland. In this QAD Precision Report, we look at what to expect. Parcel carriers in the European Union and the United Kingdom have been hit with a double whammy this year. First, […]<\/p>\n","protected":false},"author":64,"featured_media":10898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2045],"tags":[789,2570,1430,2577,2485,2486,406],"class_list":["post-10897","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-supply-chain-trends","tag-brexit","tag-export-management","tag-global-trade-compliance","tag-import-management","tag-multi-carrier-shipping","tag-parcel-shipping","tag-trade-compliance"],"yoast_head":"\nIreland, the EU, the UK and Post-Brexit Parcel Shipping | QAD Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.qad.com\/blog\/2020\/12\/ireland-the-eu-the-uk-and-post-brexit-parcel-shipping\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ireland, the EU, the UK and Post-Brexit Parcel Shipping | QAD Blog\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_single_image image=”10898″ img_size=”full”][vc_column_text]Parcel shipping between the EU and the UK is likely to become a lot more complicated after 31 December, particularly for Ireland. 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