eCommerce Tips & Trends

UPS Freight Hike, Brexit Delay & Amazon Expansion

Steve Longo

by Steve Longo

On 2019 M03 29

by Steve Longo

Welcome to this week’s edition of the eCommerce and Logistics Roundup! Here are a few of the top eCommerce and logistics news stories from the past two weeks, including news about how Brexit and its subsequent delay could impact eCommerce and the new partnership between UPS and Inxeption, as well as Easyship’s views on how they may impact the eCommerce industry overall.

Brexit Delay Could Impact Global eCommerce

On March 21, British Prime Minister Theresa and top EU officials agreed to delay Brexit until May 22, buying the United Kingdom additional time to hammer out the exact details of the country’s departure from the European Union.

The temporary Brexit delay will allow for further negotiations on key issues such as a “backstop Brexit” plan, a deal that allows for the border between Northern Ireland and the Republic of Ireland to remain free and open if Brexit negotiations ultimately fail.

Our take: The Brexit delay will allow for an extended negotiation period to address they key issues that have held up a formal withdrawal plan, including eCommerce issues. Brexit’s eCommerce impact will likely have far-reaching consequences for both the UK economy and global eCommerce.

UK businesses will likely face tariffs from the EU and vice versa, which could depress trade across the English Channel. The United Kingdom’s economy, however, could possibly get a boost from a depreciated pound, which could cause exports to rise. Yet, as the UK loses its status as the main port of entry to the EU, continental competitors like Germany and the Netherlands could seize its crown.

Global eCommerce will likely be impacted considerably, though the exact degree remains unknown. Cross-border focused eCommerce companies will likely face a serious challenge as the pound depreciates from Brexit, making imports more expensive and cutting into their profit margins. Customs between the UK and EU will likely delay trade between the two entities while the VAT remains an unresolved key point of contention.

Brexit may also prompt changes in consumer behavior as customers seek out the best deals possible to counteract the likely delayed and increased costs of eCommerce between the UK and the EU. UK consumers, in particular, could turn inwards towards their domestic market in the face of the likely higher eCommerce prices, delayed shipments and general uncertainty that Brexit will bring.

UPS, Inxeption Partner for Blockchain eCommerce Platform

UPS and eCommerce technology company Inxeption have teamed up to create a new platform integration called Inxeption Zippy, which aims to help companies market and distribute their products on numerous online channels securely.

The platform will streamline B2B logistics and transactions using blockchain technology, enabling manufacturers, wholesalers and distributors to create company-branded websites for eCommerce transactions, with marketing, listing and selling support provided by Inxeption.

Our take: The partnership between UPS and Inxeption could be a boon for the B2B eCommerce market. B2B eCommerce is booming, being slated to reach approximately $1.8 trillion by 2023. B2B eCommerce merchants, however, have been slow to adopt new technology, mainly selling products through third-party distribution or direct sales.

Inxeption Zippy will better integrate global logistics with secure, advanced technology, likely allowing B2B sellers to boost their online sales and grow their revenues. For UPS in particular, this could be an opportunity to better tap into the sometimes overlooked yet lucrative B2B eCommerce market.

With the UPS Freight hike in rates having taken effect on February 18 and the courier having increased rates for heavy freight in June 2018 in response to the eCommerce boom, UPS could potentially expect to profit from its expanded role in the global eCommerce market, especially if it continues partnering with technology companies like Inxeption.

Amazon Sees Rural America Growth Opportunity

A new study commissioned by Amazon and the U.S. Chamber of Commerce revealed that improved digital technology access in rural America could provide a major economic boost, generating more than 360,000 jobs and increasing annual revenues of rural small businesses by 21 percent over three years.

The study recommended additional funding for education and training, an initiative to attract high-tech talent to small towns and increased availability of high-speed Internet access as ways to improve the economy of rural America.

Our take: Amazon HQ2 was eyed by some as a way to boost rural America’s economy if Amazon chose to locate their second headquarters in a rural part of the country, though it ultimately went to Northern Virginia.

However, if Amazon and the U.S. Chamber of Commerce’s recommendations are heeded, rural America could potentially see a major economic benefit, particularly in eCommerce as more businesses could gain access to the ability to sell their products and services online. Rural America remains an underserved market in eCommerce, but with adequate investment from the public and private sectors, it could become a key player in the years ahead.

Easyship has recently upgraded its platform to add additional information regarding delivery times in rural areas, offering increased transparency for eCommerce merchants. Our shipping rates calculator is another great tool to use to find out find the cheapest, fastest and best value shipping deals when shipping products to and from rural areas all across the United States.