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This year has been a dual blow for parcel carriers in the European Union and the United Kingdom. One was, of course, the increase in e-commerce volumes brought on by the pandemic and accompanying lockdowns. Following that was an insanely busy prime season in November and December.

Authorities around the EU have permitted certain retail establishments to operate. Others were forced to close as a result of partial or entire lockdown procedures aimed at limiting the spread of the coronavirus. Regardless of the state of physical retail in the EU and the UK, many customers choose to purchase Christmas products and gifts online. As a result, package quantities skyrocketed.

This would have been difficult enough. However, Brexit has brought a new degree of complication to the postal carrier industry.

Brexit and Cross-Border Retail E-Commerce

It is true that Brexit will have an impact on any EU shoppers who want to buy items from the UK. Brexit will also have an impact on UK consumers who purchase online at EU e-commerce sites.

However, Irish customers are likely to bear the pain of the new laws significantly more acutely than those in the rest of the EU. Why? Because the UK accounts for 70% of all Irish online purchases.

There are several causes for this. Many of the most well-known UK brands and stores may be found on Irish high streets. As a consequence, Irish customers have faith in them.

Despite this, there are extremely few Irish e-commerce stores. Distribution facilities used to restock physical storefronts are frequently kept distinct from e-commerce operations.

The fact that Amazon does not have a local Irish marketplace contributes to the large percentage of e-commerce packages arriving in Ireland from the United

Kingdom. Amazon has just recently established facilities in Ireland. This is likely a reaction to Brexit, at least in part. However, Irish online buyers must still use Amazon’s UK marketplace, which is odd given that Amazon’s EU headquarters are in Dublin.

UK internet buyers will be affected more than those in the rest of the EU. Despite having a variety of domestic alternatives, UK buyers choose to purchase cross-border as well. In 2019, half of the British customers made at least one cross-border purchase.

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VAT and Customs Duties

If the two sides do not achieve an agreement, VAT and customs duties would considerably increase the cost of EU buyers purchasing items from UK retailers and vice versa.

Even if the two sides reach an eleventh-hour trade agreement, it is unclear if internet sales under a particular threshold will be excluded when the transition period ends.

Let’s use Ireland as an example because Irish customers conduct the majority of their internet buying from UK websites. Currently, products costing less than €22 will be excluded from additional levies. That figure, however, includes shipping, delivery, insurance, and handling fees, as well as the cost of the items itself. When a purchase exceeds the €22-mark, 21 percent VAT will be due.

Anything valued at more than €150 — including shipping costs — 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 increase costs by up to 40 percent.

This is because goods that were formerly freely circulated, will now develop imports and exports. E-commerce purchases will require customs clearance, along with commercial invoices, commodity codes and other documentation.

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.

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Parcel Carriers and Brexit

Package delivery companies have been prepared for Brexit. However, carriers, like everyone else, have no clue what type of Brexit they will face.

Again, Ireland is more likely to suffer than any other EU member. This is due to the fact that most commodities exchanged between Ireland and the rest of the EU were moved via the UK’s land bridge.

DHL Express Ireland notified customers in early December that the DHL Economy Select (DDI) Service will be temporarily suspended from December 29 to allow for the free flow of goods until December 31. The service will be resumed on January 4th. However, from now on, all products entering the UK will require customs clearance.

The good news is you don’t have to worry about hidden extra fees because you’ll only be charged for your package ‘s actual weight.

And if you have multiple packages, GS will help you save up on the shipping cost by combining your parcels into one box by providing you they’re consolidated packaging offer.

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