Not only has the pandemic accelerated domestic ecommerce, but it has also opened online shoppers’ eyes to the possibility of ordering products from other countries. In fact, data suggests more than 32% of consumers across 40 international countries made cross-border purchases in 2020; 51% plan to do more cross-border online shopping in the future. But how do you manage the complex challenge of international shipping?
Tapping the growth in international ecommerce
While creating a multilingual website is relatively straightforward, running efficient fulfilment to get parcels delivered internationally – not to mention processing product returns from abroad – is fraught with challenges. Even if they are buying from abroad, people still expect their orders delivered promptly at the agreed date and time, with regular updates on the delivery journey and advanced notification of any potential delays. So, your shipping strategy and the technology and carrier partners you use are going to be key if you want to encourage repeat orders and referrals from international shoppers.
Payment of duties on overseas shipments is a particular concern. Some carriers wrap everything, including any duties, into the shipping fee, making things very easy for the shopper. Others send a separate email asking shoppers to pay the additional duty before delivery can be completed, creating an unexpected hassle in the customer experience. It is vital to clarify at the point of purchase whether the price customers pay covers all costs, or whether they can expect a notification to pay customs duties before receiving delivery.
Working with ecommerce marketplaces
Ecommerce marketplaces might seem like an easy initial option for getting your products out to international customers, but you’ll be paying for the privilege. The Fulfilled by Amazon (FBA) service, for example, gives companies two separate options to help them expand their businesses globally. One way is to list your FBA products on either Amazon or your own website, and Amazon then exports your orders to customers around the world. The other is to list and sell your products on several Amazon websites around the world, ship your inventory to the Amazon fulfilment centres in those countries, and Amazon delivers to customers for you. You will have to pay a hefty margin for ecommerce marketplace services, however, which is why some companies opt for specialist cross-border services from their domestic carrier.
Using a single global carrier partner
The likes of FedEx, DHL, Pitney Bowes, and others, provide cross-border fulfilment to multiple locations around the world, which on the face of it, seems incredibly simple. You work with just one global carrier, giving you consistent labelling requirements, communications standards, and pricing, making international fulfilment very straightforward. If you are using DHL cross border services, for example, you simply receive an order, package it up, and calculate the shipping fee. Then DHL picks it up and exports it to the destination country.
However, when you use any third party, you are only as good as the service they provide – and each carrier will have its own strengths and weaknesses. For certain routes and regions, their service might be worse or more expensive than competitors you could be using. Ideally, you should evaluate the end-to-end fulfilment experience for customers in each location. What are customer expectations on delivery timescales in each country and does the carrier meet or exceed them?
Choosing multi-carrier distribution
The natural solution is to move to a multi-carrier distribution strategy that allows you to choose from a pool of carriers and optimise carrier selection for each shipment depending on which carrier provides the appropriate level of service and pricing for each location and route. You could, for example, use DHL in Germany, DPD in France, and Post.NL in the Netherlands as well as include other local providers within your network.
The challenge has always been that multi-carrier parcel shipping creates complexity, since each carrier insists on its own rigorous, unique labelling and electronic communication requirements to move parcels through its network. Shippers must meet each carrier’s specific needs or suffer the consequences of delivery delays, lost packages, or unexpected surcharges and fees. So, the pre-requisite to this strategy is multi-carrier parcel shipping software that complies with all your carriers’ labelling and communications requirements. The technology should also automatically determine which carrier can provide the best shipping rate for a particular order, region, and route, while ensuring every shipment complies with the carrier’s requirements and relevant trade regulations.
Importantly, your parcel shipping solution should also streamline the customer support function by providing a single dashboard for end-to-end tracking of every parcel’s shipping journey regardless of the carrier, the route, or the destination. The right technology will capture shipment status messages from all carriers in the transportation network and standardise them to reveal where parcels are at any time – with instant notification alerts about possible delays. The shipper’s support teams can proactively address delivery events such as inclement weather or traffic to meet customers’ expectations and maintain delivery KPIs.
The advantages of zone skipping
The shipping software you choose should also enable you to use “zone skipping” (also known as “breakbulk,” “hub induction,” or “direct injection”) to improve customer service and cut transportation costs. Zone skipping occurs when multiple orders are consolidated for the first leg of the delivery journey and then inserted into a parcel carrier network for the last mile. This is especially beneficial for cross-border shipping because it significantly simplifies end-to-end logistics and decreases customs clearance costs. It also allows shippers to select local carriers in different countries and regions that have optimal delivery networks for serving their customers.
Returns are a big pain point
Product returns can be one of the biggest pain points of cross-border ecommerce.
Analytics can play a significant role in the fight to restrict avoidable returns. The business intelligence in your parcel shipping software should allow you to identify frequently returned products. Investigate why and what you can do to avoid the returns. Can the items be packaged in a different way to avoid damage in cross-border transit? Do many returns originate from the same product or product category? Perhaps you should consider discontinuing those product lines for cross border deliveries? Or the problem might be that the product sizes on the website are inappropriate for a specific country. Above all, protect shoppers from any nasty surprises and make the process easy and smooth. If they will be required to pay shipping and duties for returns, then make this explicit on the website and throughout the checkout process – as well as in any email communications.
Cross border shipping is only set to grow as shoppers become more accustomed to making purchases from overseas. Providing a seamless shopping experience is key to generating repeat purchases, and a key to success is getting your shipping strategy right, so it is as easy for your customers to order, track their parcel, or return an item as it is domestically. In this way, retailers can expand their worldwide customer base, generate significant international growth, and increase customer satisfaction and loyalty.
Ken Fleming, president of Logistyx Technologies