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. 

This guide outlines what cross border shipping is, the benefits and challenges of cross border shipping, and best practices to follow.

 

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 the US that ships to Canada and the UK would employ cross border shipping to get packages into the hands of their customers who don’t reside in the US.

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 catalog). This newfound globalization 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.

 

WHAT IS INVOLVED IN CROSS BORDER SHIPPING?

Cross border shipping can be complex and there are a range of considerations to make when shipping goods across borders. 

Luckily, third-party help is available. 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.

The cross border shipping process involves:

 

DOCUMENTATION

Having the right documentation prepared will help your goods go through customs clearance more quickly and easily. If you do not have the correct paperwork, your shipment is at risk of facing delays or being rejected completely. 

Different countries and items require different customs paperwork, though commonly requested documents include:

  • Commercial invoices

  • Certificates of origin

  • Export licences

  • Customs declarations

  • Standard shipping notes

  • Proforma invoices

  • Export packing lists

 

CUSTOMS CLEARANCE

The customs clearance 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.

 

DUTIES AND OTHER FEES

When you transport goods across borders, you will need to pay various fees, including handling duties and import taxes. The fees you need to pay will depend on the regulations of the country you are shipping to, the type of item you are shipping, and the declared value of the product. 

Common fees you might have to pay include: 

  • Import duties

  • VAT

  • Goods and services tax

  • Customs processing fees

  • Brokerage charges

  • Carrier charges

  • Surcharges

  • Insurance

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.

 

BENEFITS OF CROSS BORDER SHIPPING

Having an efficient cross border shipping process can provide a range of benefits for ecommerce businesses, such as: 

 

EXPANDED MARKET REACH

By selling internationally, ecommerce businesses can expand their market beyond their home country. This ultimately expands their customer base and increases revenue. 

 

INCREASED REVENUE

Cross border shipping helps ecommerce businesses enter new markets and increases their revenue. Adding additional revenue streams from different countries also prevents businesses from having to rely on revenue from a single country or region. 

 

REDUCED COSTS

Optimizing cross border shipping logistics can help lower the costs of transporting goods by combining and consolidating shipments. 

 

MORE EFFICIENT SUPPLY CHAIN

Implementing cross border logistics processes can help businesses diversify their supply chain by preventing them from relying on a singular source for materials and supplies. This makes their supply chain more resilient and efficient. 

 

COMPETITOR DIFFERENTIATION

Being able to efficiently fulfil international orders can help ecommerce businesses stand out from competitors who may not be shipping overseas. This can encourage consumers to place more orders with them instead of their competitors. 

 

IMPROVED CUSTOMER RETENTION

If customers can reliably receive international orders from a company, they might be more inclined to order from them again. Having an effective cross border shipping process can build trust in your business and improve customer retention. 

 

OPPORTUNITIES FOR SCALABILITY

Being able to ship internationally and access markets overseas, and provide opportunities to scale your business. 3PL partners like SEKO are particularly useful for helping you scale your business as they can utilize their global network of fulfillment centers.

 

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.

1. 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.

2. 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 neighbor 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.

3. 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.

4. 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.

5. CURRENCY DIFFERENCES

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.

6. 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.

 

CROSS BORDER SHIPPING BEST PRACTICES

For cross border shipping to be most effective and to get the most out of the opportunities it presents, consider following these best practices:

 

CREATE CLEAR POLICIES

Implementing clear policies for cross border shipping can help you define how much you will charge buyers and break down prices and charges to the consumer. This provides the consumer with full transparency, building trust and avoiding any surprise charges. 

Clearly advertising shipping prices or deals on your ecommerce site can also encourage consumers to convert instead of abandoning their purchases when faced with unexpected costs. 

 

OPTIMIZE WAREHOUSING AND INVENTORY PLACEMENT

Optimizing inventory placement by storing goods at various locations across borders can help:

  • Reduce shipping distances and delays

  • Reduce shipping costs

  • Decrease shipping timescales

  • Increase customer satisfaction

  • Decrease your carbon footprint

 

DEFINE YOUR MARKET

Defining your market can help you make informed decisions about where to expand overseas first. Considering factors like customer inquiries, nearby countries, and shipping requests can indicate which markets have the highest demand. 

 

CHOOSE THE RIGHT SHIPPING OPTIONS

It is important to choose the right shipping options for your target market by considering customer preferences. DDP and DDU shipping each have their own benefits and challenges. 

Learn more about different shipping options with our ultimate guide to shipping Incoterms. 

 

IMPLEMENT TRACKING

Implementing real-time tracking offers transparency on the status of shipments and allows consumers to keep an eye on their orders. 

Tracking is a useful tool as it can increase customer trust, allow you to deal with customer concerns about delays more quickly, and collect useful data for monitoring and optimising performance.

 

PREPARE CUSTOMS DOCUMENTATION

Making sure you have accurate customs documentation prepared in advance of shipping will ensure the delivery reaches the consumer quickly and efficiently. It is important that you have complete shipper and recipient information prior to shipping. 

 

UTILIZE TECHNOLOGY

Advancements in technology and warehouse management systems (WMS) can help you collect valuable data that can show you: 

  • Potential issues to be addressed that might cause disruption 

  • Inventory levels and when goods might need to be restocked

  • Delivery estimates that can be shared with the customer 

Analytics are useful for monitoring the performance of your cross border shipping strategy and implementing any necessary changes or optimizations.

 

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, specialize 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.