Hornby is among the UK firms relocating in order to offset port delays, extra freight costs and new VAT and customs fees.
According to a report in The Guardian, logistics and warehousing companies in the Netherlands are said to have been inundated with requests from UK businesses looking to rent warehouse space.
Many UK businesses have been plunged into turmoil by the recent departure from the EU, with exports to the continent in danger of collapsing due to delays at ports and increased shipping costs, as well as the sudden addition of VAT, customs duties and tariffs on shipments sent from the UK to customers within the EU. Some feel the best strategy is establish a distribution network within the EU, and the Dutch logistics industry appears to be the chief beneficiary. According to the Netherlands Foreign Investment Agency (NFIA), the number of British companies searching for a base in the country has doubled over the past 18 months. The agency quoted a list of more than 500 global firms considering investing in the Netherlands because of Brexit – half of which are said to be UK companies. The other half are companies from locations such as the USA and Asia who want a foothold in the EU, but have decided against locating to the UK following its departure from the bloc.
By distributing from inside the bloc, UK firms are able to avoid their customers in the 27 EU member states being hit by VAT charges, customs duties and lengthy port delays which have impacted cross-border trade since 1st January. Part of the Netherlands’ popularity can be linked to Rotterdam, Europe’s largest port, as well as Schiphol airport in Amsterdam. The Netherlands logistics sector also offers companies the ability to reach customers in all corners of the EU within 24 hours.
British toy & hobby company Hornby and clothing retailer JD Sports are among those said to be considering warehousing in the Netherlands. Hornby resumed EU exports after a pause of several weeks, and will begin serving its European customers from a new warehouse based in mainland Europe within weeks. Chief executive Lyndon Davies commented: “We bring in 300-400 containers per year and we are shipping to our warehouses in the USA, Australia, New Zealand, South Africa and India, so we will consolidate at our factory and probably bring it direct into Europe.”
The move will save European customers from having to pay higher shipping costs and VAT to receive items ordered from the company’s website, as well as the tariffs levied on certain models. Under the ‘rules of origin’ outlined in the Brexit agreement, products that are not made in the UK attract tariffs when re-exported from the UK into the European market.
Businesses have also been looking at how to prevent paying double duty, or seeing its EU customers charged VAT to receive their products. Approximately one in five small businesses exports overseas, according to the Federation of Small Businesses.