The impact of the decision to leave the EU last summer is still largely to be felt but, as the March deadline set by Prime Minister May approaches, the consequences for Distribution could be costly for your customers, as well as for you.

2016 might be over and done with, but the decisions made during that strangest of years will have a lasting impact. A scarcely believing media woke to Brexit Britain, and the US followed that up with the election of Celebrity Apprentice presenter Donald Trump in November. Leicester City won the premier league and the year was scattered with loss… David Bowie, Prince, Leonard Cohen, Mohammed Ali, Gene Wilder, Alan Rickman, Terry Wogan, Victoria Wood, Caroline Ahern and EU citizenship.

A Brexit plan is slated to be in place by March and with it the subsequent evocation of Article 50. We’re careering down the hill toward a negotiation with former friends not likely to give us an easy ride; ‘pour encourager les autres’. For international distribution and logistics, the effects are – like for most other things in these negotiation – yet to be known.

A soft Brexit could perhaps lead to a way of remaining, as is the case currently, in the EU customs union. Currently, there are no customs fees levied on goods import and exporting between EU member states, and a common tariff applied to goods coming in from outside.

However, when it comes to non-EU countries – including some European neighbours such as Norway and Switzerland – and every other country, dependency and territory in the world – duties and fees are applied. Post-Brexit, that will apply to all trade with our European partners as well. And we’ve become heavily reliant on these relationships, since more than half of our exports go to current EU countries.

There is also a knock-on effect for your customers. A customer in Spain taking in your goods will, under the potential new circumstances, have to pay custom fees in their country to do so. It is going to cost you to import goods and it’s going to cost your customers buying your exported goods as well.

What might that look like in practice?

Pre-Brexit:

  1. You buy a product from a marketplace like Amazon/Ebay/Rakuten/Wayfair. You may not know where that product is being shipped from. If it comes from an EU country like Spain, then you currently don’t pay any duty, or customs declaration surcharges. If it comes from a non-EU country you will be required to pay UK import duty and customs declaration surcharges. You may have already experienced this.
    2. You sell a product to a company in Spain. Currently neither you nor the recipient in Spain pays any duty or customs declaration surcharges when it is imported to Spain.

Post-Brexit:

    1. You buy a product from a marketplace like Amazon/Ebay/Rakuten/Wayfair. You may not know where that product is being shipped from. If it comes from an EU country like Spain, then you will have to pay UK import duty, and customs declaration surcharges applicable.
      2. You sell a product to a company in Spain. The Spanish recipient will have to pay any Spanish import duty and customs declaration surcharges when it is imported to Spain.

To get a better understanding of how these changes might impact you, and how best to plan ahead, please get in touch.

Article by: Simon Perkins