Week In Review 25th January
It’s been another week in logistics dominated by the continued fallout from Brexit, and whilst we’ve seen some shimmers of light with DPD resuming full EU road delivery service, couriers and consumers alike are still feeling the effects of additional red tape when it comes to European deliveries.
We touched upon this in our previous Huboo post but, as the days continue, so do the challenges. Britons ordering items from EU sites and stores have been facing import duties since January 1st, with some having to pay over £100 to receive their already paid for items. A woman from Norfolk was told by a UPS courier that she must front £121 to obtain her £236 clothing, while a Londoner was asked to pay an extra £82 for a coat that has cost her £200. She sent back her purchase due to these added costs. It is likely that others will follow in refusing to pay the duties, returning their items, and therefore engaging in less business with EU countries.
As uncertainty continues due to the lack of a free trade deal, it seems some businesses are having to operate in a somewhat grey area. Some smaller EU retailers have ceased to supply to UK consumers, while other merchants continue to distribute their orders without amending their VAT. This leaves couriers asking UK customers to pay the outstanding fee on their doorsteps before couriers can release the purchase to them.
There has, however, been some guidance on how these charges work. The government website has a page dedicated to outlining new tax rates for goods sent from abroad. Consumers must pay VAT on goods from non-EU countries and EU Special territories if they are:
• gifts worth more than £39
• other goods worth more than £15
• alcohol, tobacco products, and fragrances
These charges are dependent on the costs incurred for postage, packaging, and insurance, any duty the consumer owes, and, of course, the price paid for the item.
When it comes to customs duty, consumers will be charged for gifts and other goods sent from outside of the EU if they’re above a certain value. This is again dependent on the price of the item, as well as postage, packaging, and insurance.
• anything under £135 will not be charged
• gifts worth £135-£630 will be charged on average 2.5%
• gifts above £630 and other goods above £135 depend on the type of good
We’re working with our partners to find suitable solutions to overcome these hopefully short-term challenges and will update and inform in due course.
Hermes has released their total number of parcels delivered in 2020 to be 630 million. This is an increase of more than double the figure reported in 2019, where only 250 million packages arrived on doorsteps. The volumes can be attributed to lockdown restrictions forcing consumers to rely on eCommerce purchases, and Hermes adapting their strategy to being more flexible with retailers’ demands.
DHL has reported a high number of shipments that require sanitary and phytosanitary checks, being held at customs at EU borders. Although this is a very selective group of products, it shows how wide-reaching the arms of post-Brexit fulfilment reach. During the customs clearance, drivers are reporting that their entire trucks are being held, rather than just the items that require checks. This obviously leads to yet more delays in orders being fulfilled and arriving by their specified delivery date, yet another delay caused by Brexit for the fulfilment sector. We’ve found the customs advice & support at DHL to be really helpful.
We’re pleased to announce that our weekly courier service report has returned, and can be viewed here.