The UK 3PL Market: What to Know 3 Years After Brexit

Sep 27

The available options for companies to ship to UK e-commerce customers changed drastically after Brexit. Now, the significance of a robust 3PL service located within the UK cannot be overstated.

As the world navigates the post-Brexit landscape, businesses are quickly realizing the paramount importance of fulfilling orders domestically within the UK. Gone are the days when shipping from outside the UK was a viable option; the complexities introduced by Brexit have made it imperative for brands to have a strong domestic fulfillment strategy in place. Setting up a UK warehouse or partnering with a reliable UK-based 3PL provider not only ensures seamless operations but also puts brands at a competitive advantage. Rush Order's UK 3PL services are tailored to meet these very needs, offering businesses a strategic edge in a post-Brexit world. In this post, we’ll elaborate on why having a UK 3PL is so important when targeting this lucrative market.

The Evolution of the UK 3PL Market Post-Brexit

Brexit brought about a seismic shift in the UK's trading relationships, reshaping the logistics and supply chain landscape. Prior to Brexit, the UK enjoyed the benefits of being part of the European Union's Single Market and Customs Union, which allowed for frictionless trade with its European neighbours. However, post-Brexit, the introduction of customs checks, tariffs, and regulatory barriers transformed the way goods moved between the UK and the EU. This added layer of complexity meant longer transit times, potential delays at borders, and increased costs for businesses.

E-commerce brands, which had traditionally relied on pan-European distribution models, found themselves at a crossroads. The challenges posed by Brexit necessitated a re-evaluation of their logistics strategies. Many quickly recognized the value of fulfilling orders domestically within the UK, sidestepping the complications of cross-border shipping. By partnering with domestic 3PL providers in the UK, these brands could ensure faster delivery times, reduce shipping costs, and maintain customer satisfaction. For instance, several prominent electronics brands, which previously shipped their products from Rush Order’s Netherlands warehouse, transitioned to our UK-based fulfillment center for their UK orders (the remaining EU volume stayed in the Netherlands fulfillment center). This strategic move not only reduced their delivery times by half but also led to a significant reduction in shipping-related customer complaints.

The results of such strategic shifts have been overwhelmingly positive for many brands. E-commerce businesses that adapted swiftly to the post-Brexit environment have reported increased sales, higher customer retention rates, and improved operational efficiencies. An apparel brand we work with, for example, noted a 20% increase in UK sales within just a few months of switching to domestic fulfillment. Similarly, a health and wellness brand, which moved its inventory to Rush Order’s UK warehouse, saw a marked reduction in shipping costs and a boost in customer reviews praising their prompt delivery times.

While UK consumers grew frustrated with constant delays from most brands still trying to ship from mainland Europe, these brands managed to stand head and shoulders above the rest. Perplexingly, we still see many brands trying to fulfill to UK customers from the EU. While the UK customs logjam created just after Brexit has subsided, there are still plenty of delays and expenses to contend with that make UK domestic fulfillment a no-brainer.

Benefits of domestic UK 3PL services

As mentioned above, Rush Order and its clients are delighted with the results achieved in the UK market by way of offering domestic fulfillment services. Here are a few objective highlights:

Speed

Operating UK-based 3PL services allows us to deliver nearly 99% of shipments within one business day via Royal Mail and other reputable carriers. This is better than 2x - 3x the speed of shipping to UK customers from mainland Europe.
99% delivery within one day is paired with our ability to ship greater than 99% of orders by noon local time on the same day. The customer experience in the UK is phenomenal.
Return shipping is similarly fast and easy

Agility

Separating inventory in another warehouse does indeed add complication. However, we’ve seen Rush Order clients take advantage of this by customizing packaging and related marketing promotions specifically tailored to the UK market that would have been difficult to do when sharing EU + UK inventory in the Netherlands warehouse. The physical segregation creates room for flexibility in product packaging and related designs without creating expensive SKU proliferation.
As clients have encountered stock outs in the UK or Netherlands warehouses, we’re still able to fulfill all EU + UK customers from either warehouse. So, managing an additional inventory location has not been too painful.

Cost

We’re seeing an average of 50% reduction in outbound and return shipping costs
Return rates dropped by 10% on average from previous levels, likely due to eliminating delays in UK customs

Sustainability

As customers become increasingly savvy and conscious of the impact their shopping habits have on the environment, there is both real and perceived value in shipping domestically over shorter distances.
It doesn’t matter how environmentally focused your brand is (or not), your ability to continually communicate small and big wins in reducing your carbon footprint will go a long with a growing portion of your customer base. On average, shipping domestically is simply greener than shipping across borders and across oceans.

Parting Thoughts on 3PL UK

As your brand continues looking for growth and considers opportunities outside your own borders, we strongly suggest you consider landing inventory in each market and servicing your customers domestically. The customer experience is better, your business will be more agile, and your profits will be higher.

If you need help understanding the tax and compliance implications of setting up a domestic operation in any particular market, please don't hesitate to reach out to Rush Order for help. We offer free consultations and there’s no obligation. Rush Order expanded its warehouse footprint globally well over a decade ago we'll be happy to point you in the direction of the correct resource in our network of friends and partners.

Not ready to chat just yet? Visit our UK 3PL page for more information in the meantime.

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