No-deal Brexit & European e-commerce
In addition to impacting upon the UK’s automotive industry, a no-deal Brexit presents complications for online tyre and car parts businesses. To gain an insight into changes in customer purchasing habits as Brexit approaches, courier express parcel company DPDgroup tasked market research institute GfK with assessing trends in e-commerce. GfK surveyed 24,258 e-shoppers in 21 European countries on behalf of DPDgroup. What it found was that the payment of additional taxes and duties, as well as longer delivery times, could prove a stumbling block to the future development of cross-border e-commerce in Europe.
In answer to the question “Would you continue to buy from foreign websites in the future if there were additional costs to pay after check-out (custom clearance, extra fees, extra foreign exchange costs, other taxes, etc)?”, 70 per cent of respondents who purchase from UK websites may stop doing so, while 69 per cent of UK e-shoppers would simply stop buying cross-border altogether.
In the event of a no-deal Brexit, goods purchased online between the UK and European countries could require the payment of additional customs duties, taxes and administration fees. End consignees may need to pay those charges prior to delivery, once their purchased goods have reached the destination country. The goods would be retained until these extra charges are paid, resulting in supplementary steps and longer delivery times.
Keeping the e-shopping experience easy
With a no-deal Brexit, additional taxes and duties would immediately apply to cross-border flows between European countries and the UK. Though these mandatory charges are unavoidable, longer delivery times, another significant consequence, can be mitigated.
DPDgroup says it has designed a specific billing solution for e-tailers who ship parcels from and to the UK. This solution enables an online payment of customs duties and taxes by the e-shopper at the moment of the purchase on the website. As customs duties and taxes are paid in advance, no administration fee will apply. Hence, parcels shipped with this solution will immediately enter DPDgroup’s network on arrival in the destination country, avoiding retention time for customs clearance.
“Brexit ready” for all outcomes
Since the Brexit vote, DPDgroup has reviewed the possible outcomes and prepared solutions to ensure the large volume of customs procedures for its clients’ trade in the UK and Europe remain smooth.
As an Authorised Economic Operator, DPDgroup manages daily parcel shipments worldwide, including customs clearance operations. DPDgroup has invested in its customs clearance teams and facilities to provide an integrated service.
In preparation for a no-deal scenario starting on 1 November, DPDgroup will operate a gradual shift as of 24 October to adjust routes and begin customs clearance services in dedicated gateways (in the UK, Ireland, France, the Netherlands and Spain) to and from the 27 European countries.
While two weeks separate Europe from the Brexit deadline, significant uncertainties still persist on many fronts. DPDgroup states that though it is “fully prepared for all outcomes”, it remains hopeful that a deal will emerge from the negotiations.