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Why opt for a European 3PL after Brexit?

Why opt for a European 3PL after Brexit?

Discover our guide on the implications of Brexit in terms of e-commerce logistics and our best practices for UK sellers.

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If keeping on shipping parcels from the UK to EU customers is of course still possible, it appears way more complex and implies many more constraints than before, in administrative as well as financial fields.

With Brexit, the UK lost the VAT and customs simplification measures that EU countries benefit from and that makes it very easy to sell goods across Europe. Merchants must now comply with customs checks that can be cumbersome and time-consuming due to custom clearances and declaration forms to complete beforehand. This means more administrative work for UK-based e-merchants as well as longer delivery times and potential delays at the border.

For some countries (France, Germany…), UK-based sellers will now also have to register and charge VAT in those countries in order to avoid their customers having to pay the VAT.

The Brexit situation also adds cost to trading relationships as most carriers now charge significant extra-fees to ship orders from the UK to the EU. For instance, DHL Express now charges €0.25 per kg with a minimum charged amount of €5.00 per shipment.

In a nutshell, keep on dealing with your logistics from the UK could put your business at risk because of: 

  • Big delays at customs borders

  • Customers having to pay more customs than they need to

  • Risk of VAT fines and penalties

  • Poor customer experience

Avoid logistics snags due to Brexit and set up an efficient cross-border fulfillment

Though Brexit makes shipping to the EU more complex for UK sellers, it is still possible to overcome those new challenges and to secure your growth on the EU market by taking the right actions.

If you are based in the UK and shipping to the EU, at a certain monthly order volume the best alternative to your current logistics organization is to start storing your products locally in the EU. 

Outsourcing your logistics with a partner such as Cubyn will prove to be: 

  • Cheaper

By holding your stocks in a European fulfillment center, you would only have to pay custom duties once for your bulk import to the warehouse, resulting in significant savings on export tariffs. 

This would also allow you to benefit from negotiated rates on EU deliveries and to drastically reduce your shipping costs

Moreover, most 3PL providers including Cubyn offer attractive discounted rates based on the volume of monthly shipments.

According to a study by Everstox, if you’re a UK-based e-merchant shipping 10 000 orders per month to EU customers, dealing with a local EU fulfillment center would save you approximately £58 000, that is to say £5.8 per parcel shipped thus allowing you to double your margin. 

  • Better

Having a logistics partner shipping your orders locally would also enable faster shipments as there would be no customs. Overall, outsourcing your logistics within the EU would make your logistics management more efficient by speeding up your delivery time by 3 to 4 days and making a D+1 delivery possible to every EU country.

The significant reduction in delivery costs mentioned above could also give you the opportunity to offer free delivery to your customers above a certain order amount.

Both those improvements would without any doubt result in greater customer satisfaction and thus a greater chance that a customer would order again on your e-shop.

  • Simpler

Finally, setting-up an efficient fulfillment solution with a logistics specialist would relieve you from the administrative complexities related to Brexit. Avoiding this bureaucratic turmoil and having no issues to deal with regarding Customer Service matters can be a great opportunity to focus only on growing your business and selling more.

The only things left to do to optimize cross-border fulfillment is to equip your business with the necessary documentation, namely EORI number, VAT number and HS code for customs declaration purposes.

In brief

Given the new constraints that have emerged following Brexit and the complexities this can bring to your business, outsourcing your logistics with a 3PL partner located within the EU will make a crucial positive impact on how fast, cost-efficient and professional you will deliver your orders to your EU customers.

Ship with Cubyn and improve your sales!

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