Far from ‘bedding in', the impact of Brexit seems to be escalating for online shoppers, couriers and retailers

18th August 2021

When the Brexit agreement was finally struck on Christmas Eve, Prime Minister Boris Johnson claimed he had secured a 'cakeist' Brexit deal, meaning Britain could have its cake and eat it. By mid-February it was looking increasingly likely that Britain's consumers and traders had been left with crumbs.

The crisis at UK-EU borders is more than ‘teething troubles'. The latest figures from the Office for National Statistics (ONS) show an escalating problem. Businesses are reporting mounting transport costs, border disruption and spiralling customs duties.

For UK plc, this is extremely serious. The EU is the UK’s largest trading partner. In 2019, UK exports to the EU were £294 billion (43% of all UK exports) and UK imports from the EU were £374 billion (52% of all UK imports).

Around 11% of UK e-commerce sales usually involve products purchased from the EU. With the UK e-commerce market worth £141.33 billion, imports from the EU account for around £15bn of the overall e-commerce spend.

This year, the crisis around ‘proof of origin’ - where exactly an item was made and sourced - means 35% of UK retailers and traders importing from the EU are experiencing major problems. As the crisis unfolds, it’s likely we will see a corresponding 35% drop in EU-UK e-commerce imports, one that could cost UK importers £5.25bn in lost imports and extra costs.

Why has this huge £5.25bn hole been created? Proof of origin represents a huge burden for UK importers. Items sourced and made entirely in the EU attract no customs fees when entering the UK. However, if a British importer is bringing in goods to the UK from the EU that were made outside the Union, or even that have a number of components that originated beyond the EU, then the product does not qualify as duty exempt. The e-commerce fashion store ASOS, for example, estimates it will have to pay an additional £15m in tariffs under the country of origin rules this year.

Source Parcel Hero - https://www.parcelhero.com/research/brexit-study