Building a better international shipping strategy
Growing a business in international markets can be difficult. We want to treat all of our customers with the same care regardless of their location. However, there are inherent hurdles involved with shipping internationally that can cause massive headaches that aren’t present with domestic shipping. From custom fees to longer transit times, to shipping delays caused by COVID-19, international shipping can be difficult to navigate. However, once you know what to expect, you can create a more streamlined and efficient shipping process for your business.
These are some of the key factors to keep in mind when shipping internationally from the USA.
Shipping to Canada.
Canada is the major trading partner with the US. Most of its population lives close to the border, and apart from recent trade disputes, items usually pass easily and affordably into Canada.
Under 3 LBS
The USPS is frequently going to be the most affordable way to ship to Canada for light parcels. Once they reach the border, USPS hands the packages over to Canada Post for final delivery.
While First Class Mail International doesn’t have an estimated delivery time frame, it can take about 2 to 3 weeks to make final delivery. This is why you may want to go with Priority Mail International for more express options. Priority Mail International guarantees a 6-10 day delivery timeframe while Priority Mail Express International has a 3-5 day delivery timeframe.
Over 3 LBS
FedEx and UPS are great premium options for getting your parcels to Canada. They offer more day-definite delivery options for parcels shipped to Canada. With UPS and FedEx, shipments to Canada take 2-7 days to reach final delivery. Cost-effective services that are similar to USPS Priority Mail are UPS Standard and FedEx International Ground. For parcels weighing less than 3 lbs, these services cost about $4 more than USPS.
UPS and FedEx may charge additional fees on top of the delivery fees. These fees are not included in the initial rate. These fees may be due to improper packaging, oversized/awkwardly shaped packaging, or exceeds a weight threshold.
International (Outside of Canada).
Under 4 LBS
For parcels 4 lbs and under, Global Post and First Class Mail International will be the most economical way to ship internationally. However, keep in mind that there are no estimated delivery time requirements, so it may take weeks to arrive at its final destination.
Over 4 LBS
For parcels weighing 4 lbs and over, USPS Priority Mail International typically offers the best rates.
Express Delivery
For Expedited services, FedEx International Priority® offers a slight edge over UPS Worldwide Express®.
Issues Specific to International Shipments.
Custom Fees
Customs Fees are a cost that a host country charges to a shipment associated with the cost of managing the flow of goods in and out of said country. Any product you ship abroad will go through Customs before the buyer receives it, and there is a fee associated with managing this process. For e-commerce sales, the recipient typically is responsible for covering these fees.
Duties & Tariffs
Customs duties and tariffs are similar to custom fees. They are taxes applied to imported goods that the recipient has to pay for. The purpose of these fees is to compensate the recipient nation for the labor costs and compensation associated with producing and selling the goods domestically.
Create a Better Experience for International Customers.
Disclose Any Potential Import/Customs Fees
A commonissue for merchants who ship internationally is abandoned or unclaimed packages. Because of the above-stated fees and charges, some customers end up not wanting to spend the extra money to receive their orders.
When this happens, you can either Treat as Abandoned or Return to Sender. Frequently, it can be less expensive to abandon the merchandise with customs and wear the cost. Recently I had a merchant complain to me that a customer rejected their Kitchenaid stand mixer shipped from New York to Toronto. When it was returning through the customs office to reimport back to the US, the item had racked up enough customs charges that it cost about the same as the retail price of the stand mixer.
By clearly outlining potential customs charges and duties up front, you will be letting your customers know what to expect. While this can reduce sales, it can also avoid the costly headache of dealing with abandoning merchandise.
Bill Duties to the Payor
A common way to avoid customers abandoned international shipments is to select to pay the customs/international charges instead of billing them to the customer. Frequently, these charges are estimated and included in international shipping rate at checkout.
Don’t Under Declare Shipments
One mistake you should avoid entirely is under-declaring the items of your shipments on the commercial invoice. If the custom clearance agencies suspect that the declared value is below market price, they may ask you for a new invoice and many additional costs can follow. If they don’t receive the revised commercial invoice in a timely manner, the parcel can remain in customs, triggering warehouse storage fees. Additionally, the courier can charge you a fee for undervaluing your goods. Correctly assessing and declaring the value of your shipment up front can save you a lot of money and time wasted in the long run.
This is a guest blog from James Messer at ShipStation.