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A Shipper's Comprehensive Manual on Cross Border Shipping

Phuc Le
October 10, 2023

Cross border shipping is no straightforward endeavor. It necessitates careful consideration of customs procedures and international regulations, adding layers of complexity beyond domestic shipments. Handling an array of documents becomes the norm, and any minor mishaps within this paperwork labyrinth can send ripple effects through the entire delivery supply chain. However, amidst these challenges, the ever-expanding international commerce market has rendered cross border shipping exceptionally profitable.

If you can adeptly address these complexities, a world of vast opportunities awaits. In this article, we delve into key issues surrounding cross border shipping, outline the essential documents, and offer valuable tips for enhancing the overall experience.

CROSS BORDER SHIPPING CHALLENGES

CROSS BORDER SHIPPING CHALLENGES

When embarking on cross border shipping, several critical issues warrant your attention. Here are the three most pertinent concerns:

1. Meeting Client Requirements

Selecting the right shipping partner can be a daunting task, given the multitude of options available in the market. What criteria do your clients prioritize when evaluating shipping processes? How do they discern the superior choice?

For brands embarking on cross border delivery, the choice of a reliable shipping partner carries tremendous significance. The efficiency of their supply chain and customer satisfaction hinges on your performance. Consequently, understanding your clients' needs and their criteria for selecting shipping partners is paramount.

Most companies seek the following attributes in their shipping partner:

  • Cost Efficiency: Naturally, the cost, including any concealed charges, is of paramount importance.
  • Carrier Diversity: They may opt to collaborate with multiple partners to reduce reliance on a single carrier or entrust all logistics to a single entity to negotiate favorable rates.
  • Transparency and Support: A robust parcel tracking system and responsive customer support are vital to address any delivery issues. The digitization of all shipping documents enhances transparency, offering a notable competitive edge.

Keep these considerations at the forefront as you fine-tune your offerings.

2. Understanding Incoterms

International Commercial Terms (Incoterms) play a pivotal role in defining the responsibilities associated with the transportation and delivery of goods. They elucidate crucial aspects such as:

  • The point at which ownership and responsibility shift.
  • The party responsible for customs clearance.
  • When the risk of the shipment transitions from the seller to the buyer.
  • Incoterms provide a common language to ensure alignment among all parties involved.

Incorporate these Incoterms when completing the requisite shipping documents. Any misunderstandings regarding these terms can lead to disputes concerning delivery, insurance, and customs clearance. Therefore, a strong command of this "language" is essential for every cross border shipper.

3. Navigating Customs

Customs authorities in each country or economic region establish stringent regulations governing the importation of goods. As a shipper, it is imperative to have a comprehensive understanding of the customs compliance requirements for each destination. Staying current with evolving security regulations is equally crucial.

Failure to clear customs efficiently can result in significant delivery delays, leading to delayed or even non-payment, dissatisfied customers, and additional operational costs for clearance. Vigilance in ensuring that shipments adhere to customs regulations is critical. Unexpected issues at borders can wreak havoc on your operations.

Customs officials may impound your shipment for various reasons, such as the presence of prohibited goods or discrepancies in documentation. Ensuring that your delivery team maintains complete and accurate documentation is vital. One strategy to minimize the likelihood of documentation errors is the adoption of digital processes.

ESSENTIAL DOCUMENTS FOR SMOOTH CROSS BORDER SHIPPING

As emphasized earlier, proficient management of crucial shipping and delivery documents is pivotal for your business. These documents not only facilitate the customs process but also streamline your delivery and payment procedures. Here is a rundown of key documents that are indispensable for cross border shipping:

1. Bill of Lading (BOL):

The Bill of Lading ranks among the most vital cross border shipping documents, regardless of whether your shipment travels by land, sea, or air. It serves as confirmation that the carrier has duly collected the shipment and will transport it to the agreed-upon destination. A study conducted by the International Chamber of Commerce found that incorrect or missing Bill of Lading documents accounted for a substantial percentage of shipping-related disputes, leading to costly delays.\

The BOL meticulously delineates the ownership aspects of the transportation agreement at various stages, effectively acting as a safeguard for all parties involved, with potential utility in case of disputes. Moreover, it itemizes the characteristics, weight, and quantity or volume of each loaded item, serving as the foundational basis for monitoring your shipped or hauled cargo. In recent times, electronic Bills of Lading have gained popularity.

2. Packing List:

The packing list provides an inventory of the contents within the shipment, offering item-specific details like weight and package dimensions. This information often forms the basis for generating bills of lading. Customs authorities may also reference the packing list to identify specific items necessitating inspection. According to a report by the World Customs Organization, 60% of cargo inspections at international borders are triggered by inadequate or inconsistent packing list information.

3. Insurance Certificate:

Given the array of risks involved in cross border shipments, securing insurance against potential mishaps such as damage, loss, or deterioration is prudent. The transport insurance certificate is an integral component of cross border shipping documentation, explicitly outlining the covered goods, the scope of insured risks, and the contractual terms and conditions. A comprehensive analysis by the Institute of International Shipping and Trade Law reveals that shipments without adequate transport insurance faced a 36% higher likelihood of claims and disputes.

4. Proof of Delivery (POD):

The necessity for a POD extends to both cross border and domestic shipments. It operates as an official receipt, affirming that the recipient has taken possession of the shipment. A signed POD serves as verification that the delivery was accurate, with the correct quantity of items delivered and free from damage. A transition to electronic POD systems resulted in a 43% reduction in delivery disputes and a 37% decrease in the time taken to resolve them. Two primary methods exist for POD: paper-based and electronic, with the latter gaining prominence due to its speed and reduced error rates. 

5. Certificates of Origin:

Certain international customs regulations mandate a certificate of origin for your shipments. This document serves as unequivocal proof that the goods in the shipment were entirely sourced, produced, manufactured, or processed in a specific country. It simplifies the determination of the origin of goods and attests to compliance with customs or trade prerequisites. Virtually all countries worldwide require a Certificate of Origin for customs clearance procedures, with electronic certificates of origin (eCO) often expediting the process. A transition to electronic POD systems resulted in a 43% reduction in delivery disputes and a 37% decrease in the time taken to resolve them.

6. Commercial Invoice for Shipping:

Among the most critical documents for seamless international trade, the commercial invoice plays a pivotal role in customs clearance. It expedites customs officials' assessment of duties and import taxes due on your shipment. Research from the International Chamber of Commerce suggests that customs officials spend up to 40% more time on shipments with incomplete or inaccurate commercial invoices. This document comprehensively encapsulates details about the goods and all parties involved. Inaccurate completion of a commercial invoice can result in lengthy delays and impediments.

These represent the core documents necessary for successful cross border shipping and customs clearance. Additionally, other documents may be requisite depending on the specific circumstances, including country-specific certificates, dangerous goods forms, a shipper's letter of instruction (SLI), a pro forma invoice, and more. The necessity of these supplementary documents hinges on your individual case.

STRATEGIES FOR ELEVATING THE CROSS BORDER SHIPPING CUSTOMER EXPERIENCE

STRATEGIES FOR ELEVATING THE CROSS BORDER SHIPPING CUSTOMER EXPERIENCE

Enhancing the customer experience in cross border shipping requires a strategic approach that focuses on transparency, communication, efficiency, and reliability. Here are several key strategies to improve customer experience through cross border shipping:

1. Shipping Costs and Transparency:

Data shows that 65% of customers abandon their online shopping carts due to unexpected or high shipping costs. To enhance customer experience, providing clear shipping cost information is crucial. A study by Baymard Institute found that 86% of shoppers expect to see the total cost, including shipping fees, before proceeding to checkout. Transparent pricing not only reduces cart abandonment but also increases conversion rates by up to 35%.

2. Delivery Time and Reliability:

Metrics reveal that on-time delivery significantly impacts customer satisfaction. A survey by MetaPack found that 75% of customers consider delivery time as a crucial factor when choosing an online retailer. Furthermore, retailers that consistently meet delivery estimates enjoy a 52% higher customer retention rate, demonstrating the importance of reliable delivery timeframes.

3. Customs Clearance:

Research indicates that customs delays can lead to dissatisfaction among customers. A report by DHL Express highlights that 37% of online shoppers expect international deliveries to be faster than they currently are. Efficient customs clearance can help mitigate delays. Streamlining the process led to a 25% reduction in customs-related issues, according to a study by Descartes Systems Group.

4. Communication and Tracking:

Timely and accurate communication during the shipping process is essential. A study by Narvar found that 71% of customers value tracking updates to stay informed about their deliveries. Implementing real-time tracking systems can lead to a 20% reduction in customer inquiries related to order status, improving customer satisfaction.

5. Returns and Customer Support:

According to a survey by UPS, 68% of customers say that a convenient returns process is a key factor influencing their decision to shop with a retailer again. Additionally, a report by Zendesk highlights that businesses with responsive customer support have 33% higher customer satisfaction rates. A hassle-free returns process and accessible support significantly enhance the customer experience.

6. Documentation and Compliance:

Inadequate guidance on customs documentation can lead to delays and customer frustration. Data from the World Customs Organization suggests that 40% of customs-related issues stem from incorrect or missing documentation. Offering comprehensive resources and guidance can reduce errors and lead to a 30% decrease in customs-related disputes.

7. Damage and Loss Protection:

Statistics show that customers worry about the safety of their items during shipping. A study by Package Guard found that 41% of customers have received a damaged package in the past. Offering shipping insurance can alleviate these concerns. Businesses providing insurance options have reported a 15% increase in international orders, indicating that customers value protection against potential losses or damages.

By focusing on these strategies, businesses can significantly improve the customer experience in cross border shipping, ultimately leading to higher customer satisfaction, loyalty, and positive word-of-mouth recommendations.

 

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