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[2021] EU-Guide: Brexit Costs on Supply Chains and Shipping to the UK

Updated on: 6th January 2021, 10 min read.

Exporting from the EU to the UK – how much does the new trade deal and Brexit cost your business? Here’s a guide for eCommerce, Retail & B2B Businesses from the EU exporting and shipping to UK customers.

Not a business from the EU? Here’s also our Brexit Guide for UK Businesses exporting to the EU.

Consequences for EU Businesses – The Trade Deal and Brexit Costs on Supply Chains:

EU Guide: Brexit Costs, Supply Chains and eCommerce

Supply Chains, eCommerce & Trade after Brexit – What has changed?

On January 1st 2021, the UK has left the single market and customs unions of the EU. As the authorities have agreed upon an EU-UK Trade and Cooperation Agreement, the UK is not classified as a Third Country in the context of cross-border trade. Third Countries have no trade agreement with the EU. In a Hard Brexit scenario, the UK would have become subject to the general World Trade Organisation (WTO) tariffs agreements. But with the new trade deal in place, the continuous cooperation in areas of mutual interest is secured.

Now, what does the Free Trade Deal truly mean for your business? There are so-called zero tariffs and quotas for traded goods. This and many other benefits are true for only certain types of products. Brexit and the new trade deal have a significant impact on your supply chains, eCommerce, and exports to UK customers. From January 1st 2021, there are new rules, custom checks and formalities for your exports. As a result, your business now needs to bear certain Brexit costs in terms of administrative effort, time and money when selling to retail, B2B and eCommerce customers from the UK.

Currently, the average UK citizen spends €3,315 on eCommerce purchases per year. This is more than any other country in the world. This makes the UK a lucrative market for various products sold online, such as Cosmetics, Healthcare, and other FMCG goods. However, this online shopping behavior might change after Brexit for EU-imported products. A natural consequence would be that UK customers buy less from EU businesses due to longer delivery times and increased shipping costs. In fact, research conducted by the DPD group confirms this assumption: 69% of UK online-shoppers would not buy products from EU businesses if they have to wait longer and pay more for their purchased products.

As exporting goods to the UK becomes harder and demand is more price sensitive, what can you do to secure your sales market? You might also ask yourself – How can I ensure that my products arrive on time to my UK customers and how much does Brexit cost my business?

In our previous article: Brexit Guide for UK businesses, we consulted with tax expert Taxdoo to provide you answers to these questions and to showcase Best Practices for UK businesses selling to EU customers. For EU businesses, however, the new rules and the Brexit impact on supply chains, cross-border trade and eCommerce sales from the EU are slightly different.

That’s why we made a more specific guide on Brexit Costs for EU businesses to provide you with a checklist for exporting to the UK.  But also in order to summarise our findings and to provide you with a concrete example, we’ve analysed the Brexit Costs for single parcel shipping vs. bulk shipping.

The analysis shows how your EU business can save EUR 45,000.00 on shipping costs when delivering 8,000 orders to UK customers. With this guide, you’ll also know how to speed up order fulfillment and product delivery to your UK customers by 3-4 days. Let’s go.

How to secure Supply Chains and a seamless Logistics Stream to the UK?

First of all, it is crucial to consider that for each product category, there will be different rules and regulations that vary according to industry and product type.

For example, when you export Cosmetics to the UK, you must comply with the Cosmetics Products Enforcement Regulations. When you place Cosmetics products in the UK market, you need to notify the UK’s Submit Cosmetic Products Notification (SCPN) database instead of the EU’s Cosmetics Products Notification Panel (CPNP). If you have already registered with the CPNP, you have 90 days to add the information on the UK SCPN service.

What’s more, the new trade deal imposes changing trade tariffs and shipping documentation depending on the EU country that you ship your products from. When exporting to the UK, follow the instructions of your EU-member state. Here’s an overview to find the official guidelines from your respective EU country.

To be more specific, we’ve prepared a detailed checklist for businesses shipping products to the UK from Germany. This checklist covers the new official regulations and strategic questions to consider when exporting your goods to the UK. In case you don’t ship from Germany, you can apply the same logic according to your EU-member state.

Our Brexit checklist has three parts:

  • Actions to do right now
  • actions before selling
  • and actions to do before shipping

Our Brexit Checklist: Exporting Products from Germany to the UK

Note: These concrete actions apply to goods and products that are being shipped to the UK from Germany. There are different regulations for product and parcel shipping from other EU countries. Check out your EU country’s official website for more information.

Brexit Supply Chain Actions: To do right now.

Brexit Impact Preparations

[1] Make sure to get an EORI number for your German business when exporting to the UK. You will also need a second EORI number that starts with GB.

If you ship from another EU country, you would also need an EORI number from that specific EU-member.

Brexit Supply Chain Tip #1: If you want to ensure fast customs clearance, make sure you have both EORI numbers. Otherwise, the HM Revenue and Customs (HMRC) might block your shipments. This would add extra shipping costs and delays.

[2] Apply for an AEO status for simplified declaration procedures.

Brexit Supply Chain Tip #2: An AOE status indicates a secure and compliant supply chain. Also, the customs control procedures meet UK and EU standards. With an AOE status, you increase your delivery speed for eCommerce, Retail and B2B shipments.

[3] Check the new trade rules in terms of marking, labeling and marketing standards for your product category when exporting to the UK.

Brexit Supply Chain Tip #3: For example, if you export CE-marked products to the UK, make sure that you have UKCA marking and all other licences and certificates required for placing your products in the UK market. Otherwise your UK customers might not receive their imported products due to blocks at customs.

Brexit Supply Chain Actions: Before you sell

Supply Chain PreparationsCheck:
[4] Who are you exporting to (B2C or B2B)?

Brexit Supply Chain Tip #4: If you export to UK businesses, check if your partner has the necessary documentation. This includes import documentation of the receiving country (e.g. custom declarations on our checklist: Before you ship). Check if your UK business partner can apply for a duty deferment account to delay paying custom charges. This includes import VAT, Customs Duty, and excise duty.

[5] Are you selling to UK customers via your own website, a marketplace, or a retail store?

Brexit Supply Chain Tip #5: This will determine the way you handle your logistics. For example, if you sell through your own online shop, you might consider the fulfillment of your UK orders from a local UK warehouse. We’ll help you find the best logistics partner for your business.

[6] Which Stock-Keeping-Units (SKUs) are you planning to place in the EU market? And how many orders are you expecting in 2021?

Brexit Supply Chain Tip #6: If you plan to offer only specific SKUs to UK-customers, you will only need to prepare export paperwork for these articles. The number of orders will determine the shipping costs for your business. This will also lead you to the strategic consideration of either single parcel shipping to the UK or choosing bulk shipment with local fulfillment. Our shipping cost comparison below shows why.

[7] Check commodity codes, duty, and VAT rates for your type of product. E.g., review the full trade tariff list and apply the correct VAT rates for your offered products.

Brexit Supply Chain Tip #7: When you sell to other UK VAT-registered business and if your EU products are being bought and consumed outside of the EU, as an exporter, you do not necessarily need to charge VAT. However, an import tax would still be charged when the product arrives at UK’s HM Revenue & Customs. This would then be paid by either your customs agents or the customer.

When you sell to private consumers (non-registered VAT), a so-called distance sale would apply: you must charge VAT in the normal way as you would do for your EU customers. After crossing a certain VAT threshold, however, you need to register your businesses in the UK.

[8] Does your online shop display the correct product information for UK customers? And, is it in accordance with product safety standards?

Brexit Supply Chain Tip #8: Due to liability reasons you need to ensure that your products are compliant with the UK product safety standards.

[9] How do you fulfill your orders?

Brexit Supply Chain Tip #9: Using a professional third-party logistics (3PL) provider will ensure that your customer orders are fulfilled in great quality. Choosing a local UK fulfiller will also ensure the timely delivery of your products to your UK customers. We can help you find a suitable logistics service provider.

Brexit Supply Chain Action: Before you ship.

Brexit Impact Preparations

[10] Ensure commercial custom clearance: When exporting products to the UK, you need to declare your goods for customs. This can be done either by yourself or by appointing a customs representative to act on your behalf. For example, a freight forwarder or a logistics service provider.

Brexit Supply Chain Tip #10: Appoint a freight forwarder, customs agents, or a professional third-party logistics provider from our network to handle your customs clearance.

[11] Have all other shipping paperwork in place. For example:

  • commercial invoice
  • the applied custom tariff for this parcel
  • the packing list including product description, weight, dimensions, the buyer’s information, the seller’s information as well as seller references
  • export declaration (if value over EUR 1000)
  • transport documentation (waybill (bill of lading) / Airwaybill (AWB), CMR)
  • proof of export (for VAT purposes)
  • licenses and approval (e.g. for pharmaceutical products)
  • certificate of origin (C/O or CO)

Here’s more information from DHL on cross-Border Shipping Paperwork.

Brexit Supply Chain Tip #11: Appoint a custom agent or a professional 3PL service provider from our network to handle all shipping paperwork.

You can refer to this brief Brexit checklist when you are exporting to UK-customers. Now that you have the checklist, let us find out the costs to ship parcels from the EU to the UK.

There are two fulfillment and shipping scenarios:

Scenario 01 – bulk shipping from the EU to UK warehouses to fulfill your orders locally with parcel shipping

Scenario 02 – international single parcel shipping from the EU to eCommerce, Retail and B2B customers in the UK

We have already called attention to an important point in our checklist: Check the number of parcels that you ship or plan to ship to the UK. This number will influence your logistics costs. You can choose between UK fulfillment or international single parcel shipping based on this number. Let us analyse the logistics costs for these two scenarios.

Choosing between International Single Parcel Shipping and Local UK Fulfillment

It’s important to consider a couple of aspects before we compare cross-border parcel shipping vs local fulfillment. These variables will dictate how you ship your goods to the UK now that Brexit took place.

Ask yourself the following first. What type of product are you selling or transporting? Specifications such as price, weight, and packaging dimensions will determine your logistics operations.

Secondly, how important is the end-customer experience for your business? How much shipping fees will your customers tolerate? And how long should they wait for their orders?

Lastly, the number of orders that you currently receive from UK-customers. And how many orders do you expect to get per month in 2021 and the following years?

Based on these factors, we have built a concrete business scenario. Let’s say that you run a German business and sell FMCG products through your eCommerce shop. Currently, you receive 8,000 orders per month from UK customers. The average shopping card value is EUR 54.00 with around 3 articles per order.

The logistics costs in our following shipping cost comparison will be calculated based on these details. But let’s review the FMCG eCommerce case in detail first.

Brexit Supply Chain Case: eCommerce FMCG Sales from Germany

Type of ProductFMCG
Amount of Goods produced (EU-origin)15,000 units
Amount of Orders per month from the UK8,000 units
Amount of Goods per Order (SKUs)3
Amount of Picks per order3
Good’s Value per unitEUR 10.00
Good’s Price (excl. shipping costs)EUR 18.00
Avg. Shopping Card ValueEUR 54.00
Amount of goods per EUR1 Pallet2,700
EUR1 Pallet weight (90 boxes)840 kg
Weight per Good0.3 kg
1 Order picked & packed weight1.1 kg

Bear in mind that you should plan your logistics depending on your business case. The impact of Brexit varies according to the product type that you sell. Different product categories will have different customs regulations for labeling, licensing, and tariffs. So make sure to refer to our Brexit supply chain checklist from above.

Now let’s look at the costs for our eCommerce FMCG case. In the coming section, we will review international shipping vs local UK shipping in detail.

Brexit Costs Supply Chains and eCommerce to UK customers

Detailed Cost Comparison: International Shipping vs Local UK Fulfillment

Note: The shipping and logistics costs result from our eCommerce FMCG Case and are broken down per order. For your bsuiness case, these logistics costs could differ depending on the product type, amount of picks per order and the overall amount of orders that are being fulfilled and shipped.

Brexit Supply Chain Scenario 01:

International bulk shipping with local fulfillment and parcel shipping

Brexit Supply Chain Scenario 02:

National bulk shipping and fulfillment with international single parcel shipping

Transport Specifics

(Germany to UK)

Direct Bulk Shipment (EUR1 Pallet) from DE Manufacturer to UK warehouse, leading to local fulfillment and national single parcel shipping.Bulk Shipment (EUR1 Pallet) from DE manufacturer to DE warehouse, leading to DE fulfillment and international single parcel shipping to the UK
Avg. Fulfillment Costs per Order
(for 3 articles & picks) 
EUR 1.80 – 2.00

(incl. Visual Checks for Incoming Goods, Storage, Pick & Pack)

EUR 1.80 – 2.00

(incl. Visual Checks for Incoming Goods, Storage, Pick & Pack)

Shipping Costs for Transport Route 1:

Bulk Shipment

EUR 0.03

(international, based on industry standard pallet shipping service providers)

EUR 0.04

(national, based on industry standard pallet shipping service providers)

Shipping Costs for Transport Route 2:

Single Parcel Shipping Track & Sign

EUR 4.00

(national, based on Royal Mail small parcel & other shipping service providers)

EUR 8.30

(international, based on Royal Mail small parcel & other shipping service providers)

Export Tariff & Customs
(5% for this product type)
EUR 1.50


EUR 2.70


Return Rate Cost (10%)EUR 0.40EUR 0.83
Delivery Time
(eCommerce Standards)
1 – 2 days4 – 5 days
Logistics CostsEUR 8.10EUR 13.77
Difference between Scenario 01 & 02+ EUR 5.67– EUR 5.67
Total Logistics Costs Savings (Shipping 8.000 Orders)+ EUR 45,313.95

+ 3 – 4 days

– EUR 45,313.95

– 3-4 days

(Sold Price – Good’s Value – Logistics Costs)
EUR 15.90EUR 10.23

In short, there are two ways to ship your goods to the UK.

In Scenario 01,  you directly ship your goods in bulk from your German manufacturer to your UK warehouse and fulfillment provider (3PL). Now, when you accept an order from an UK customer, the 3PL can fulfill these orders locally in the UK. As a result, you would save on freight rates and delivery time.

In Scenario 02, you ship your goods directly to your DE warehouse to store and fulfill your customer orders from Germany. When a UK customer buys a product through your online shop, the order will be fulfilled within Germany and sent via single parcel shipping to the UK.

Logistics & Brexit Costs: Single Parcel vs Bulk Shipping from Germany to the UK

Fulfillment Costs: EU vs UK

When you compare logistics prices between the UK and the EU, you will realise that fulfillment rates are similar in both countries. Within each country, however, these rates could differ across fulfillment providers.

On one hand, this is based on the operational focus of your logistics service provider. On the other, your business case makes a difference. For example, the volume of the orders, the SKU picks per order, and the warehouse location impact prices. For example, if the warehouse is in a prime location close to an urban area, you can presume that the fulfillment rates will be high. Refer to our guide on average logistics costs to know more about warehousing and fulfillment costs.

When searching for a fulfillment provider in the UK, you need to consider a few market variables. For example, where does the majority of your UK customers live? From a strategic point of view, you should consider choosing a location from which you can offer next-day delivery for 70-80% of your customers. We can help you with finding the best warehousing and fulfillment partner in the UK.´

So what are the key cost differences in our eCommerce FMCG case from above? The fulfillment costs are similar as we have chosen identical geographic locations in both countries. Plus, it’s the same product type, number of orders fulfilled per month, and quantity of picks per order. The variations in prices result from shipping costs, export duties and taxes, return rate costs, and speed of delivery.

Comparing Transport and Shipping costs

Based on eCommerce Best Practices, your parcels are shipped via track and sign services. And your customer should receive free shipping above a certain order value. This would lead to your eCommerce business covering the transportation costs.

Evidently it costs you more to ship single parcels from Germany to the UK than to ship parcels within the UK. You save around EUR 4.04 per order for delivery costs in this case. And these shipping costs already include the pallet shipping from your manufacturer to your warehouses.

Brexit Costs: Value-based vs. Price-based Export Tariffs

The EU-UK free trade deal claims that there are zero tariffs and quotas for traded goods. But, this does not apply to all products types. Make sure to check your commodity codes, tariffs and VAT rates for your product type on the official UK Government website. In fact, it could be that you do not need to pay for trade tariffs.

In general, export tariffs are applicable to either the selling price or the value of the product. This depends on the location from which you sell the goods and from where these goods are being consumed. In our eCommerce FMCG case, export tariffs are applicable.

In Scenario 01, your eCommerce business needs to pay EUR 1.50 for your FMCG products as the export tariffs are based on the product value and not the sold price. This is because you only store your merchandise in the UK without having them sold.

In Scenario 02, your eCommerce business is charged EUR 2.70 per order as your products are exported to UK customers as sold goods. Therefore export tariffs are based on the final price. So, in Scenario 01, you add EUR 0.80 to your profits for each order.

Taking Return Rates into account

Returns are experienced by all eCommerce merchants. In some cases, e.g. fresh produce and frozen items, returns might not possible. But, you might provide a money-back guarantee. In any case, you need to consider average return rate costs for each order.

In Scenario 01, returns are shipped to your local UK warehouse instead of international shipment to Germany. This is (A) more convenient for your UK customers and (B) less costly. In comparison to Scenario 02, you save EUR 0.43 on return costs per order. That’s another bump to your overall profits.

What about Delivery Speed?

If you fulfill and deliver your orders locally, you naturally increase your delivery speed. Surely, you can also consider international express and courier services, but this would cost you a lot.

In Scenario 01, your eCommerce brand is able to offer same-day or next-day delivery at low shipping costs to your UK customers. Thus, your customers will have a great experience and probably will order from your online store again.

How to save on Brexit costs and time for logistics

In our eCommerce FMCG case, local UK fulfillment will save a lot on logistic costs, resulting in more profitability. In Scenario 01, your profits per order are EUR 15.90. In Scenario 02, your profits are only EUR 10.23. This means you save up to EUR 5.67 per order with decentralized logistics and flexible warehousing.

Make sure to comply with all new Brexit rules for your eCommerce, Retail and B2B business. Our eCommerce case showed you a way to secure your supply chains and to avoid Brexit costs for your business. Flexible warehousing and Logistics-as-a-Service providers like everstox are specialized in modern warehousing and fulfillment solutions.

Our everstox team has helped many businesses and merchants to navigate through Brexit. One of our recent customers, VAAY (Sanity Group) is just one of many examples to find a suitable logistics partner in the UK. Click the button below to reach out to our logistics experts.

Was our Guide for your EU business helpful? We also have more Guides and How To’s for Retail, B2B and eCommerce logistics. Here are some tips:

About the Authors

Maximilian Nenning | everstox

Maximilian Nenning
Marketing Manager

About everstox

everstox is a technology and Logistics-as-a-Service (LaaS) platform enabling scalable and data-driven fulfilment for eCommerce, B2B and Retail businesses through a European network of independent logistics providers.

We enable transparent, efficient and ecological logistics solutions by forming Europes first tech-driven network of trusted warehousing & fulfilment partners.

Further information about everstox can be found under: www.everstox.com.

Check also our Resources section and our LinkedIn page to keep up-to-date with our recent news, posts and achievements.

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