Crossing the Pond: A brief overview of parcel distribution in the UK
Andy Underwood, Managing Director, Whistl Parcels
The United Kingdom boasts a mature parcel delivery network as well as Europe’s most advanced and profitable eCommerce market. This combination creates an ideal gateway for American brands to connect with loyal British customers.
Let’s breakdown the nuances of UK parcel distribution and help you enjoy seamless entry to the market.
UK consumers place their trust in US products
The British appetite for US products is second only to China in terms of cross-border activity. Items bought from the United States accounted for a 21% share of international purchases in 2022, showcasing UK consumer trust and familiarity with businesses from across the pond. British consumers are tech-savvy, brand-conscious, and eager for exciting new products. From fashion and tech to homewares and beauty, your unique US offerings have a ready audience waiting to be captivated.
The size and scope of the UK parcel market
Driven by the growth of eCommerce, UK parcel volumes and revenue have exploded in recent years. Parcel revenue is close to £13bn, up from £6.9bn in 2013. Meanwhile, UK parcel volumes remain above pre-pandemic levels with 3.6bn parcels delivered in 2022-23.
Underpinning this trend is a world-class logistics infrastructure, with modern sorting centres, efficient delivery networks, and advanced technology ensuring your parcels reach their destination safely and swiftly. You can also track your packages with ease through user-friendly online platforms, offering peace of mind every step of the way.
Import considerations and typical delivery times
U.S shippers are required to abide by UK customs regulations. However, these are relatively straightforward and helpful resources are readily available. Most goods under the value of £135 (roughly $170) don’t require duty to be paid. But understanding VAT (Value Added Tax) is key. VAT applies to all goods at a standard rate of 20%, though reduced rates exist for certain items.
Given the fact that the UK is 40 times smaller than the U.S, it’s perhaps no surprise that most delivery options are swift and cost-effective. Once your parcels have reached the UK, major cities typically see next-day deliveries, while rural areas receive items within 2-3 days.
Moving goods from the U.S to the UK
Shipping your products from the US to the UK will be your first priority. The major carriers (couriers) each offer international parcel delivery services with different costs and levels of service.
The United States Postal Service (USPS) is the only American carrier to offer flat-rate shipping while its extensive network of drop-off points is extremely convenient. However, USPS parcels are not tracked once they leave the U.S and will be handed to Royal Mail upon arrival in the UK. This can cause delays to delivery times.
UPS has an extensive global logistics network and can deliver to the UK in as little as three days with full tracking available. Costs are higher though, especially for heavier items.
FedEx pricing and delivery times are comparable to UPS although competitive options are available if bulk shipping.
DHL is another huge international carrier, albeit drop-off locations are not as widely available in the US compared to UPS and FedEx.
UK carriers and consolidators
Once in the UK, you’ll find a diverse parcel distribution network. Some of the principal final-mile carriers include: Royal Mail, Evri (formerly Hermes), DPD, DHL and Yodel.
Meanwhile, it could also be worth exploring the services provided by parcel consolidators. As the name suggests, these companies have multi-carrier relationships and can offer value-add services across the parcel journey.
This gives your customers the benefit of additional delivery choice and flexibility and often results in cheaper costs because of the consolidator’s enhanced buying power. A consolidator will also support you with any delivery requirements and utilise their expertise to simplify customs clearance, tax and compliance. This can be especially beneficial for regular or large-scale importers.