Business, Freight News, Logistics

Soaring shipping costs prompt British brands to reshore

[ September 1, 2022   //   ]

Two in five British brands are considering switching to UK manufacturers as shipping costs rise, according to a survey on behalf of global fulfilment firm ShipBob. Research partner CensusWide surveyed more than 750 founders of UK brands that sell consumer goods online that have between 1 and 50 staff. It found that the UK’s small brands are refocusing on domestic sales and retail partnerships as rising international shipping prices and customer acquisition costs bite into margins and threaten growth. 

The report said that while cross-border commerce has traditionally been the engine for rapid ecommerce growth, rising shipping costs are causing many small UK brands to prioritise operations closer to home. Some 40% of UK ecommerce founders are now prioritising their domestic sales while 38% said they might boost their business by moving manufacturing from overseas to the UK, in order to avoid import challenges and rapidly rising freight costs.

The cost of shipping a shoebox-sized parcel to America has risen by nearly a third in just 12 months, from £15.73 to £20.56, according to analysis by ShipBob, thanks to a combination of currency fluctuations, fuel surcharges and inflation rates.

ShipBob general manager for EMEA, Enda Breslin, said: “Spiralling shipping costs are now strangling the growth of the UK’s blossoming ecommerce entrepreneurship sector as brands begin to neglect cross-border commerce. International sales are the quickest way to grow an ecommerce business, so while it’s understandable that many will look to protect bottom lines by focusing inside British borders, it will mean that UK brands won’t scale as fast as they should be.

“Small brands should still look to expand ambitiously but should pay extra care to do so in a resilient way. Choosing fulfilment partnerships carefully will help small brands position themselves closer to their overseas customers and level the playing field with local competitors when it comes to shipping speed and cost.”