As the UK braces for new Northern Ireland parcel rules, costs are rising, volumes falling
New regulations for shipments to Northern Ireland are set to go live on 31 March, 2025. But the latest ONS survey reveals GB businesses trading with Northern Ireland are already suffering from rising transport costs. The international delivery expert Parcelhero warns transport & storage sector companies’ NI volumes tumbled by 25.9% in December 2024.
The next round of changes for shipments to Northern Ireland take effect on 31 March after being delayed from last summer. The new regulations are part of the Windsor Framework and they will significantly impact B2B parcels, warns a leading shipping expert. The new changes come at a particularly bad time, cautions the international delivery expert Parcelhero, when UK businesses trading with Northern Ireland (NI) are already reporting rising transport costs and falling volumes.
New figures released this month by the Office for National Statistics (ONS) reveal that just 13.1% of currently trading manufacturers based in Great Britain said they had sent goods to Northern Ireland over the past 12 months, whereas 81.9% said they had not. That contrasts with figures for January 2021 when 20.1% of manufacturers said they had sent goods to Northern Ireland in the previous year.
These results are just the tip of the iceberg, fears Parcelhero’s head of consumer research, David Jinks, a member of the Chartered Institute of Logistics and Transport. Says David: ‘The ONS’ latest Business Insights and Conditions Survey reveals a tale of woe for businesses attempting to ship between the British mainland and Northern Ireland. If we look at the situation for retailers it’s a similar picture to manufacturing. Only 15.1% of retailers based in Great Britain said they had sent items to Northern Ireland in the last 12 months compared to 77.6% who said they had not, while 4% said they had stopped sending to NI as of December 2024.
‘Since Brexit, significant new regulations have been introduced in an attempt to avoid physical barriers between NI, part of the United Kingdom and therefore now technically outside of the EU, and the Republic of Ireland (ROI), which remains part of the EU.
‘As a result of these changes, the ONS figures reveal 32.7% of Northern Ireland-based businesses reported challenges related to the NI Protocol agreement, with 9.6% saying differences in rules and regulations were a major cause of these issues. Of businesses based in England and trading with NI, 11.3% reported significant challenges around the Protocol agreements.
‘The knock-on effects of increased red tape and delays mean a whopping 28% of NI-based companies said transport costs have become a challenge and 13.3% of companies based in England also reported significant concerns about the cost of shipments to NI.
‘Ultimately, all this upheaval means that 25.9% of transport & storage sector companies (the category which includes logistics, parcels, haulage and warehousing businesses) have seen their volumes to NI decrease in December compared to the previous month. Only 1.9% reported increased activity.
‘Of course, Christmas peak and issues with Holyhead Port following Storm Darragh will have impacted these figures, but they do build on the previous comparable ONS data, from June 2024, when 34.4% of transport & storage firms said their volumes to NI had decreased. In June, just 1.9% of transport & storage sector companies said goods volumes to NI had increased and 11.7% said they had now stopped moving goods to NI entirely.
‘Remember, all these figures come before the latest round of regulations bite. Under the terms of the Windsor Framework, negotiated by former PM Rishi Sunak, there is now a Green Channel for goods arriving in NI deemed not at risk of entering the EU and a Red Channel for those that are. Green Channel goods don’t pay any new duties but Red Channel goods must pay full EU Customs fees.
‘The aim of these changes is, ironically, to speed up deliveries of items shipped from Great Britain that are not likely to enter the EU from Northern Ireland. When the new system settles down that may be the case but, for now, it spells significant upheaval. Parcel carriers are expected to become UK Internal Market Scheme “trusted traders” to facilitate the new regime and, from 31 March, B2B movement of parcels between NI and GB will move in line with the same processes that are currently in place for freight.
‘Businesses will be required to upload commercial data to their traders’ goods profile to reduce the administrative burden each time products are imported into NI. Parcel companies must join this scheme by 31 March and ensure they gather the correct data from their customers and that it is integrated with HMRC.
‘It’s no wonder that some major couriers have announced that they will now only provide a B2C/C2C service to Northern Ireland and will not cover B2B movements. Similarly, carriers are warning that they may not be able to move parcels into Northern Ireland if the data requirements haven’t been met by their customers.