Cross-Border Shipping Guide: Navigating International Commerce
If you’re an ecommerce retailer considering cross border selling, you’ll need to be prepared for cross border shipping. While the concept itself is simple, the logistics involved aren’t so straightforward. You can use this international shipping guide as your launchpad into cross border commerce.
WHAT IS CROSS BORDER SHIPPING?
Cross border shipping, also commonly referred to as cross-border shipping or x border shipping, is a term used when a package crosses international borders. For example, an ecommerce retailer in Australia that ships to New Zealand, the US and the UK would employ cross border shipping to get packages into the hands of their customers who don’t reside in Australia.
With the evolution of ecommerce in the past couple of decades, retailers have more opportunities than ever to sell their wares across the globe because the internet means retailers are no longer reliant on a physical location (or even a physical catalogue). This newfound globalisation presents businesses, both B2C and B2B, with an opportunity to expand their reach, boost revenues, and grow their businesses.
However, selling internationally comes along with a built-in hurdle: cross border shipping. It can be costly, time-consuming, and complicated. Doing it poorly can harm customer experience, so retailers must ensure they’ve got a solid cross border strategy in place before making the leap.
6 CHALLENGES OF CROSS BORDER SHIPPING
There are several challenges associated with international shipping. Here are the top six challenges commonly associated with cross border freight services and shipping.
CUSTOMS LAWS AND REGULATIONS VARY FROM COUNTRY TO COUNTRY
Each country has its own laws and regulations for what can and cannot be shipped into the country and how customs duties and tariffs are charged. Some restrictions on what can be shipped into a country might seem very odd. For example, butter substitutes can’t be shipped to Canada. Tariffs and customs regulations change all the time, too.
DOCUMENTATION CAN BE COMPLICATED
Shipping cross border comes with a lot of paperwork, and because the laws and regulations are different in each country, the documentation necessary is also different. For example, even to ship to a friendly neighbour like Canada from the US, shippers will need to provide a bill of lading (BOL), commercial invoice, Electronic Export Information forms (EEI), customs forms, and plenty more documents depending on the type and value of the product being shipped.
IT CAN BE TIME-CONSUMING
The paperwork, the research, and the language barriers. All these factors can make facilitating cross border shipping time-consuming. It also simply takes longer to ship packages farther, and that’s not even accounting for the additional time required for packages to get through customs.
CROSS BORDER FREIGHT CAN GET EXPENSIVE
With the additional distance and the hassle and expense of getting packages through customs, shipping internationally can get expensive, especially if you don’t have a logistics network at the ready. There’s a lot to learn about customs duties and tariffs to keep those costs as low as possible.
Currency often varies from country to country, and that means that product prices and shipping costs must be translated for international customers, and incoming revenues from international sales must be exchanged for US currency.
THERE’S A LEARNING CURVE
There’s so much to learn when it comes to cross border shipping! You’ve got to learn about the laws, regulations, documentation, and costs, all while searching for and networking with shipping carriers and other logistics service providers who can meet your customers’ needs.
UNDERSTANDING AND NAVIGATING CUSTOMS
There are 99 chapters in the US Harmonized Tariff Schedule that display how tariffs are levied on items being imported to the United States. Even across the same category, tariffs are assigned differently. For example, some tariffs for live animals (found in Chapter 1) are assigned by the kilogram, others are by headcount, and some are a percentage of the cost of the animal. Now imagine figuring out what tariffs would cost in hundreds of different countries.
It’s a maze, and that doesn’t even take into account the documentation requirements, regulations, and prohibitions about what can be shipped into which countries and how. That’s a big deal since oftentimes prohibited or improperly documented or packaged items will simply be destroyed at customs rather than returned to the sender.
A PACKAGE’S TRIP THROUGH CUSTOMS
The customs process isn’t as complicated as the regulations or paperwork, but it can be tedious. It starts with a customs officer checking over the paperwork, ensuring it’s up to snuff, though the documents necessary will vary by country and product. From there, duties and taxes will be assessed when required.
How do those duties and taxes get paid, though? If you’ve shipped the package Delivery Duty Paid (DDP) via a parcel service, the carrier included these costs in your shipping charges. If the package was shipped Delivery Duty Unpaid (DDU) and there are taxes and duties owed, the package will be sent to a customs broker that will collect the amount due.
Once all duties and taxes are paid, the package is cleared to enter the country and will be picked up by a carrier there.
Luckily, customs brokers have a vast wealth of experience (and often licensing depending on the country of origin) in getting packages through customs without a hitch and without their customers overpaying. The broker will ensure all documentation is in order and all import laws and regulations are being adhered to. Many 3PLs and freight forwarders have customs brokers on staff to help manage international shipments.
CROSS BORDER SHIPPING IS UNAVOIDABLE
If you’re considering taking your ecommerce or retail business international, it’s important to remember that cross border shipping is a bridge you’ll have to cross to get where you’re going. An effective cross border strategy is a crucial part of breaking into new markets.
If you’re ready to begin selling internationally and this international shipping business still looks daunting, no worries. You don’t have to do it all yourself. Many 3PLs, including SEKO, specialise in international cross border shipping.
HOW A 3PL CAN HELP WITH YOUR CROSS BORDER SHIPPING NEEDS
Since managing cross border shipping yourself can be both complicated and costly, many shippers opt to outsource cross border shipping to a 3PL.
3PLs can help an ecommerce business or other retailer with cross border shipping by serving as a customs broker, making sure paperwork is in line and all duties and taxes are being assessed properly. They can also help by leveraging their global carrier networks, tracking packages across international borders, and building routes that get your freight where it needs to go faster. SEKO can handle all those cross border services and more. Reach out to the SEKO team to learn more about our cross border services or get a quote.
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