Know what to look for and why when shipping internationally as a business owner, with a clear framework to understand the process.Despite our highly globalised economy, many barriers to international trade remain. Moving things from warehouse in country A to customer in country B involves risks, costs, regulations, and different parties at different stages of the journey. The risks are considerable for small and medium enterprise (SME) owners who are unfamiliar with the processes.
Managing the entire process as an expert takes experience and established relationships, but there’s no reason why business owners can’t pick up a “big picture” understanding of the process to avoid common mistakes. This article presents a framework that breaks the process down into three stages of a cycle, each with three key considerations.
Stage 1: Planning
Key Considerations: Documentation. Scheduling. Costs.
These considerations are primarily influenced by location (of both sender and receiver), and cargo. Your choice of service provider, be it your governmental postal service or a commercial service provider, will also further influence the key considerations.
Documentation is required both for export and import purposes. Your postal or delivery service provider are supposed to provide you with the relevant guidelines to pass customs. Some common examples for this include (but are certainly not limited to):
It would be impractical to list every possible document for every possible location. But one thing is certain – you’ll need to familiarize yourself with the document required for your business, the items you are sending, and your operating markets. A good service provider will have them on hand for you.
Scheduling and costs are highly subject to your service provider.
Large multinational businesses commonly use the most well-known commercial service providers (consider the biggest shipping brand names with big advertising budgets), which offer the fastest delivery speed at the highest price. Alternately, the layperson sending non-urgent items to family and friends may opt for public postal services, which offer the slowest and least comprehensive service (e.g. long customer service response times and imprecise tracking) at a relatively low price.
For some, postal services are too slow and hard to track, while the largest commercial service providers are too costly. Growing business owners and online retailers may choose among those positioned in the middle (such as ourselves, and our direct competitors) who aim to provide “value” – “Why not half the price for only 1–3 days longer than the fastest option?”, as the rationalization goes.
As a point of reference for speed and cost, consider the following table:
*Estimate before tax and insurance, but includes some form of tracking.
Documentation and budgeting both come into play when looking at destination-specific customs requirements. Here are some examples of unique issues to plan for regarding some major delivery regions:
Consider how to balance your budget and standard delivery time (for major regions) before choosing a service provider, pricing your products online, and guaranteeing delivery to any regions. Planning these steps will help you achieve peace of mind – position you to focus more on core business development.
Stage 2: Transit
Key Considerations: Logistics Chain. Tracking. Communications.
Some people just want their cargo to go from point A to B by a certain time, and leave it at that – no questions asked. But this isn’t so realistic in the modern information age, where data and transparency are increasingly important for businesses and customers alike.
The fundamental concern behind the “transit” stage is knowing where your shipment is in the logistics chain through modern tracking methods/platforms, and how to communicate this to your customers (e.g. through “checkpoints”). This process ensures the receiver can arrange to receive the item at the right time.
The main checkpoints, listed in chronological order, can be broken down as follows:
Some situational checkpoints:
Package is held for payment of duty and tax by receiver.
Remote areas may need extra working day for delivery.
The receiver refuses to pay. Sender will be notified for details.
Timing between each checkpoint is naturally subject to regional variance, your service provider, and the characteristics of your package (see: stage 1). Overall though, the process is quite standard.
The next questions: How does your service provider track your shipment, and how do you break this down for your customers?
The average customer may not need to know about every step of the process. Some steps are minor formalities, and may give rise to more questions or confusion. But it often puts customers at ease to know, for example, once something has crossed the border into their country. It also helps to explain delays, such as if something is stuck in customs for reasons beyond your control.
Business owners need to balance price with level of sophistication and service quality (e.g. customer enquiry response times) when choosing a tracking platform and service provider. As a business owner, being familiar with this will be essential to ensuring you can respond to customers appropriately, and market your service honestly.
Stage 3: Delivery
Key Considerations: Delivery Process. Customer Preference. Data Analysis.
The third stage revolves around the customers’ relation to your business strategy once the product crosses their border, and gathering enough data to further refine your strategy (the planning stage) in future. This completes the cycle.
The delivery stage is but one step of the whole logistics chain, but it is the most subject to local variation, as shown in the planning stage of the cycle. It is easier to learn and memorize your own country’s export rules and practice. But what if you are a small business who wants to deliver to customers all over the world?
Actual delivery needs to be handled locally – be it through locally employed staff, or local partnered specialists. Overall, this “last mile” of the process has its own set of complexities. Most importantly, customer preference and behaviour comes into play.
Delivery hours or expectations vary by country or city. Door-to-door delivery is a must for some places (such as most of the US, and many other places with spread out populations). But people in big international cities may prefer picking up their package from an easily-accessed storage centre, because of the flexibility it offers.
Moreover, when working with commercial service providers, you need to assess what extra services are offered per region to suit the location’s customers. In Singapore, some customers may benefit from having delivery hours last until later at night (e.g. 10pm). In the UK, some users may be accustomed to having tracking functionality accessible in a mobile app.
Finally, we arrive at data analysis. Data gathered throughout your shipment processes can be used to further optimise your business strategy and delivery process.
Delivery to customer, or the “last mile”, can be subject to the most inconsistency. But there’s also the greatest potential of useful data to be gathered about your audience’s market.
For example, ongoing fluctuations in traffic or weather conditions between cities can be tracked and monitored to ensure better route planning and scheduling, especially if patterns emerge. From a different perspective, businesses can also track social media for mentions or feedback around their products during times with high numbers of delivery arrivals (consider how people may share photos of products they have been eagerly awaiting).
Understanding receiver behaviour and their satisfaction regarding logistics arrangements is essential for tailoring your cross-border shopping experience, which in turn will affect how people perceive and experience your brand. Be sure to work with your service provider to see what data can be gathered to further enhance your business. Then use this data to revisit your plan, and restart the cycle from stage one.
The international shipping process can be confusing for business owners looking to sell overseas for the first time. But choosing the right logistics partner and developing a clear understanding of the cycle will unlock new opportunities for many growing businesses.