Brexit frictions push UK businesses to set up Dutch trade hubs

As the UK government searches for Brexit-related opportunities, one group has already discovered them: Dutch warehouse owners.

An influx of British businesses into the Netherlands has increased as they battle the disruption of a customs border across the North Sea.

More than 90 investors have built or rented retail space since 2017, half of them in 2021, according to government agency Invest in Holland.

They include Huboo, a logistics provider for online retailers. Martin Bysh, chief executive, said he had to act after customers deserted as Brexit negotiations unfolded in December 2020. “We lost around 10% of our revenue, that is customers leaving the UK for Europe,” he said. “It was a chaotic landscape.”


Boris Johnson’s government has repeatedly said it is ready to leave the EU on December 31, 2020 without a trade deal as it haggles with Brussels. Finally, an agreement for duty-free and quota-free trade was reached on Christmas Eve. But this introduced customs, food safety and tax controls after a one-year transition period.

“We didn’t know what to do, and there was almost no advice from the government,” Bysh said. Many small businesses simply stopped supplying the EU because they did not understand the documents and feared trading illegally, he said.

Huboo was already looking to rent a warehouse in Germany, but Covid-19 and bureaucracy had delayed the process. It moved to the Netherlands and in June 2021 its factory in Eindhoven, near the Belgian border, was operational with 40 employees.

“The Netherlands is an ideal place to start a business. They are ready to help and they are sitting next to so many key markets,” he said.

The 32,000 m² warehouse has more than 300 customers, including a growing number in the Netherlands. UK businesses can send one pallet at a time, keeping stock there, rather than sending individual items directly from the UK to consumers, each requiring a customs form.

For companies sourcing product from the EU, bringing it to the UK to ship back to the EU makes even less business sense.


Snag, which sells Italian-made tights and other clothing online, had to make a decision in July 2021 to cope with the growth: to build a new distribution center in the UK or the EU, which represented approximately one third of sales. Tom Martin, managing director, said he opted for the EU. “At that time, there was still no trade agreement and none were guaranteed. It was a great decision.

After evaluating a number of countries, Snag chose the Netherlands and found a warehouse in the town of Venlo near the German border. The corridor between the port of Rotterdam in the west and Venlo in the east is congested with road, rail and river traffic transporting goods to and from warehouses.

“Germany is our biggest European market and we can now ship there next day,” Martin said.

Snag had a choice of premises, but this has narrowed as more UK based and international companies arrive. Staffing has also become an issue. The Netherlands has only 3.4% unemployment.

It is also more difficult to hire temporary workers, essential in the e-commerce industry when orders peak before Christmas. In the UK, agency workers are available almost on demand, but the Netherlands has higher social benefits.

“Salaries for permanent staff are 10% higher than in the UK. But temporary staff cost twice as much,” Martin said. Dutch employers also cover travel costs. But he said it was still economical to operate there.

The Netherlands has long been a trading entrepot, hosting Europe’s largest port at Rotterdam and using the Rhine to transfer goods to and from Germany’s industrial heartland.


Since 2017, the port’s storage area has doubled to reach 4 million m², or 400 hectares. “There’s a lot of demand, and Brexit is one of the factors,” said Danny Levenswaard, break-bulk manager at the port. But he said many international companies also wanted “buffer stock” due to the disruption to supply chains caused by the pandemic.

Rotterdam, which had record container traffic of 15.3 million 20ft equivalent units (TEUs) in 2022, was ready for Brexit after updating its handling systems and training traders.

Truckers, freight forwarders and customs agents must register with Portbase, a non-profit company, which pre-clears all goods. The only checks are on food and animals, and when customs spot something suspicious. Brexit has increased the company’s workload by a fifth, but it’s manageable, said Marty van Pelt, head of trade relations.

“We don’t have any queues. The longest wait is four minutes, that’s how long customs officers have to decide if they want to inspect something.

But the number of UK customers has fallen from 367 to 300 since Brexit as many trucking companies have backed away from delivering to the EU due to increased red tape.

Rotterdam itself has attracted 40 investments from companies operating in the UK since 2016, said Roos Vermeij, the alderman responsible for the economy at the city council.

A service

There is a dedicated expat advice service in English. Foreign business leaders are welcomed each year at a red carpet dinner with the mayor.

Bysh of Huboo says many UK entrepreneurs have now adapted to the new trading regime. It has opened distribution centers in Spain and Germany and is looking to expand into the Netherlands.

His latest innovation allows UK customers to list goods in euros on, a major Dutch online retailer, with just one click and he believes more mid-sized businesses are ready to resume exporting.

“Once you’re VAT registered in the EU and jump through a few little hoops, it’s not complicated [to export there],” he said. “And . . . then you might just think, well, this is a great opportunity. Let’s do it right and on a large scale.

– Copyright The Financial Times Limited 2022

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