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Are Customs Brokers Required for International Shipping?

Phuc Le
July 24, 2023

When first-time importers are planning to bring goods into the country, they often ask themselves, "Do I need a customs broker?" Importing goods, regardless of their size, quantity, or nature, is a complicated task that involves numerous intricacies and legal requirements. Understanding whether or not a customs broker is needed is one of the many things that leaves first-time importers scratching their heads.

To shed light on this matter, it's important to refer to the guidelines provided by Customs and Border Protection (CBP), the agency responsible for overseeing customs processes in the United States. According to CBP, you will need a customs broker if the goods you are importing are regulated by another government agency. These regulations could involve specific commodities such as food, drugs, alcohol, firearms, or certain agricultural products. In such cases, a customs broker can navigate the complex regulations and requirements set forth by the respective agency, ensuring compliance and smooth entry of the goods into the country.

WHAT DOES A CUSTOMS BROKER DO?

What Does A Customs Broker Do?

The services provided by customs brokers can vary depending on whether they work independently or for a company. However, their common goal is to assist importers and exporters in navigating the federal rules and regulations associated with international shipping.

Importing goods involves extensive research and due diligence, which can be time-consuming. By partnering with a customs broker, you can delegate these responsibilities to experienced professionals. Customs brokers take care of various tasks on your behalf, saving you time and allowing you to concentrate on other essential aspects of your business. Whether it's managing documentation, coordinating with customs authorities, or ensuring compliance, customs brokers handle these responsibilities, streamlining the import process.

Moreover, customs brokers provide invaluable guidance throughout the importing process. While they take care of most tasks, there may still be certain aspects that require your involvement. In such cases, customs brokers offer their expertise and assistance, ensuring you navigate these tasks effectively. Their knowledge and experience in customs procedures and regulations help you make informed decisions, reducing the risk of errors and facilitating a smoother import experience.

By working with a customs broker, you gain access to their extensive network and resources, which can further simplify the importing process. They have established relationships with customs officials, carriers, and other key players in the supply chain. Leveraging these connections, customs brokers can facilitate communication, resolve issues promptly, and streamline the overall import operation.

ARE CUSTOM BROKERS REQUIRED FOR INTERNATIONAL SHIPPING?

Are Customs Brokers Required for International Shipping?

When it comes to international shipping, the requirement for customs brokers varies depending on the specific circumstances and regulations involved. In many cases, customs brokers are necessary when importing goods that are regulated by government agencies. For instance, certain commodities such as food, drugs, alcohol, firearms, or agricultural products are subject to strict regulations that require the expertise of a customs broker to ensure compliance.

According to the U.S. Customs and Border Protection (CBP), customs brokers are mandated for certain regulated goods. For instance, the CBP states that if you are importing goods that fall under the jurisdiction of another government agency, such as the Food and Drug Administration (FDA) or the Environmental Protection Agency (EPA), the use of a customs broker is typically required to navigate the complex regulations and facilitate the clearance process. These agencies have specific requirements for documentation, inspections, permits, and certifications, making the expertise of a customs broker invaluable in meeting these obligations.

Even in cases where a customs broker may not be legally required, their services can still provide significant benefits for international shipping. Customs brokers possess specialized knowledge of customs procedures, tariff classifications, and trade agreements. This expertise can streamline the shipping process, reduce the risk of errors or delays, and ensure compliance with customs regulations.

Research conducted by the International Chamber of Commerce (ICC) has shown that incorrect or incomplete documentation accounts for 50% of customs-related delays. By engaging a customs broker, importers can rely on their expertise in handling the necessary paperwork, including customs declarations, commercial invoices, bills of lading, and other documentation, to ensure accuracy and compliance. This helps expedite the clearance process and minimizes the risk of customs-related issues.

Customs brokers also have in-depth knowledge of tariff classifications, which are essential for calculating duties and taxes accurately. The World Customs Organization (WCO) estimates that errors in tariff classification contribute to approximately 4% revenue loss in customs duties globally. By leveraging the expertise of customs brokers, importers can avoid classification errors and optimize their duty payments, reducing costs and ensuring compliance with customs regulations.

Furthermore, customs brokers serve as a communication bridge between importers and customs authorities. They have established relationships and direct lines of communication with customs officials, which can help facilitate a smoother clearance process. According to research conducted by the Global Trade Management Market, the use of customs brokers can reduce the number of queries or issues encountered during the customs clearance process by 40%. This efficient communication helps minimize delays and ensures a seamless flow of goods across borders.

WHAT SERVICES DO CUSTOMS BROKERS PROVIDE?

What Services Do Customs Brokers Provide?

  1. ISF Filing

Any merchandise imported into the U.S. by ocean vessel must be accompanied by an Importer Security Filing (ISF) prior to arrival. ISF filing can be completed by the importer directly or by an assigned agent – a customs broker. It has to be completed and filed at least 24 hours before arrival at a port. Even goods entering a Foreign Trade Zone (FTZ) must have one filed.

There are ten data points that must be included by the importer with every filing:

  • Seller information
  • Buyer information
  • Importer of Record number or FTZ applicant number
  • Consignee
  • Manufacturer or supplier
  • Transport ship
  • Country of origin
  • Harmonized Tariff Schedule (HTS) Code
  • Container stuffing location
  • Consolidator

Some of this information is very straight forward – buyers and sellers are simple enough, and even things such as country of origin shouldn’t be too difficult. Information on HTS codes, however, must be exact. 

If the CBP fails to receive an ISF filing or receives ones with mistakes, consequences include:

  • $5,000 fine per violation
  • CBP hold preventing product release or transfer
  • Refusal of an unladen permit
  • ‘Do Not Load’ orders upon arrival 

Although only one of these is a specific fine, the others could cost you just as much money. Delays can cause missed deadlines on promised deliveries, and some holds result in having goods seized and destroyed. In comparison, the average service charge from a customs broker for ISF filing is between $25 to $50. Paying less than a hundred bucks to save yourself thousands seems well worth it. 

  1. Customs Bonds

If you plan on importing more than $2,500 worth of products, you need a customs bond. A customs bond is how the CBP ensures that all necessary fees and import duties owed are paid. 

The bond amount needs to be at least 10% of any duties or taxes that need to be paid. Customs brokers arrange for the purchase of bonds through a surety company. Importers pay a service charge that depends on both the broker and the amount required. 

Some brokers simply charge a flat fee for a bond if it’s under a certain value. Most brokers begin with a base charge of about $40 and add on from there. Flat rates typically vary between $200 to $400, but prices may change based on the state of the economy.

There are two types of customs bonds brokers can arrange on behalf of their clients. 

  • Single entry bond
  • Continuous bond 

Which one you require depends on your import practices. What’s stopping an importer from simply getting a bond directly from the surety? In most cases, it’s the surety itself and their unwillingness to risk their business. 

These are companies placing themselves on the line for what could be thousands in customs entry taxes. Most sureties will not work with anyone other than a licensed customs broker. In their experience, most importers simply don’t have the needed experience and are more likely to make mistakes that end up impacting the surety company. 

  1. Power of Attorney

Customs brokers make importing simpler by consolidating many of the required tasks. To accomplish this, they must often work with various government agencies. Other than the CPB, agencies that are frequently involved in the import process include:

  • U.S. Department of Agriculture
  • Bureau of Industry and Security
  • U.S. Food and Drug Administration
  • The Environmental Protection Agency

In order for a customs broker to work with these organizations on behalf of an importer, they need to be granted power of attorney (POA). It won’t give the broker any control over the inner workings of your business. It simply allows them to legally sign off on certain documents. 

Fees for a POA filing are rarely charged separately because it’s being used to complete other tasks. Anytime you use a customs broker to assist with customs clearance, there must be a POA signed and on file with the CBP. 

This is actually a requirement of 19 CFR 141.44 and is completed with Customs Form 5291 or another valid POA authorization.    

  1. Importer of Record Registration

An importer of record (IOR), whether a company or an individual, is the party the CBP will hold responsible for complying with all import laws. This is an important role that can have severe financial and legal consequences if mistakes are made. Because of that, the chosen IOR is often part of the negotiations between the involved parties. In many cases, Incoterms® are used to officially designate the buyer or seller with the job. 

There are 11 different types of Incoterms® used in international trade.

Depending on the contract terms, the responsible party must then complete an importer of record registration. Customs Brokers can assist with this in two ways. 

  • A licensed customs broker can complete the registration process for your business or for an individual.
  • A licensed customs broker can agree to act as the importer of record as a third party affiliated with your company. 

The majority of brokerage firms will complete your IOR registration without an issue. In this case, you are using their services to make sure that all the right information is present and that it’s being filed with the correct authorities. 

Fewer brokerage firms are willing to act as the IOR in your business’ place. By taking on the responsibility of being the IOR, they also place themselves in the hot seat should anything go wrong. For many firms, it’s just not worth the financial liability it places them in. 

HOW MUCH DOES A CUSTOMERS BROKER COST?

Customs broker fees can vary based on factors such as the transaction value, complexity of the shipment, and the specific services required. Understanding industry averages and obtaining detailed quotes will help you assess the cost of hiring a customs broker accurately. By considering these factors and evaluating the expertise and services provided, you can make a well-informed decision while ensuring compliance and efficient customs clearance for your international shipments.. Customs brokers typically charge their fees based on one or a combination of the following methods:

Transaction-Based Fee: Many customs brokers charge a fee based on a percentage or a fixed amount of the shipment's declared value. According to a survey by Integration Point, a global trade management software provider, the average transaction-based fee ranges from 0.5% to 5% of the shipment value. The specific percentage or fixed rate can vary depending on the complexity, value, and type of goods being shipped.

Hourly Rate: Some customs brokers opt to charge an hourly rate for specialized services beyond standard customs clearance. The hourly rates can vary based on factors such as the customs broker's expertise, experience, and location. According to a report by Armstrong & Associates, a supply chain market research firm, the average hourly rate for customs brokerage services ranges from $80 to $150 per hour, depending on the location and level of expertise.

Additional Service Fees: Customs brokers may charge additional fees for specialized services or circumstances that require extra attention or resources. These services can include obtaining permits, certifications, or licenses, managing customs audits or inquiries, or providing trade compliance advice. The fees for these additional services are typically based on the specific requirements and complexity of the task. The rates can vary widely, and it is advisable to request detailed quotes from customs brokers to understand the costs associated with these additional services.

THE BENEFITS ANALYSIS WHEN YOUR BUSINESS HIRE A CUSTOM BROKER

The Benefits Analysis when your business Hire a Customs Broker

Hiring a customs broker for your business can offer numerous benefits that positively impact your international trade operations. Let's conduct a benefits analysis to understand the advantages of engaging a customs broker:

Expertise and Compliance:

Customs brokers bring specialized knowledge and expertise in customs regulations, ensuring compliance with trade requirements. According to a survey conducted by Integration Point, 76% of companies find it challenging to keep up with changing trade regulations. By hiring a customs broker, businesses can leverage their expertise to navigate complex regulations and reduce the risk of non-compliance, penalties, or shipment delays.

Time and Resource Savings:

Engaging a customs broker allows businesses to save time and resources by offloading customs-related tasks. A study by Amber Road and the American Association of Exporters and Importers (AAEI) found that 58% of respondents consider the completion and accuracy of documentation as one of the most challenging aspects of global trade compliance. By delegating documentation preparation, customs clearance, and communication with customs authorities to a customs broker, businesses can focus on core operations and strategic initiatives, increasing overall productivity and efficiency.

Tariff Optimization and Cost Reduction:

Customs brokers can optimize tariff classification and identify cost-saving opportunities. The World Customs Organization (WCO) estimates that errors in tariff classification contribute to around 4% revenue loss in customs duties worldwide. By leveraging the expertise of customs brokers, businesses can reduce costs by accurately classifying goods and leveraging preferential tariff programs. This optimization improves profitability and enhances competitiveness in the global market.

Risk Mitigation and Compliance Management:

Non-compliance with customs regulations can lead to financial penalties and reputational damage. Customs brokers help mitigate risks by ensuring compliance with regulations. According to Thomson Reuters, 78% of companies identify regulatory complexity as a major challenge in global trade compliance. Customs brokers provide ongoing compliance management, stay updated on regulatory changes, and conduct thorough compliance checks, reducing the risk of non-compliance and associated consequences.

Industry Insights and Consultation:

Customs brokers offer valuable industry insights and consultation, aiding businesses in making informed decisions. A survey by Deloitte shows that 88% of businesses believe customs brokers play a significant role in helping them navigate the complexities of international trade. By leveraging their industry knowledge, businesses can optimize supply chain strategies, capitalize on trade agreements, and adapt to regulatory changes, gaining a competitive edge in the global marketplace.

 

CONCLUSION:

While customs brokers are not mandatory for international shipping, their expertise and assistance can significantly simplify the process, ensure compliance with regulations, and mitigate risks. By understanding what customs brokers do, their role in international shipping, and the benefits they provide, you can make an informed decision on whether to engage their services. Remember, a reliable customs broker can save you time, money, and headaches, making your international shipping experience smoother and more efficient.

 

More Insights

September 14, 2023

Cross Border Shipping: A Masterclass in Freight Solutions

In 2022, the value of goods traded between the United States, Canada, and Mexico was over $130 billion, which was 20% more than in 2021. This shows how important it is to trade across borders to connect what's made with what's used. However, shipping things across borders isn't always easy. There can be problems with knowing where things are, finding enough space to transport them, and dealing with changes in demand during different times of the year. That's why many companies, big and small, work with experts who specialize in helping things move smoothly across borders. Whether a company ships a lot or just a little, it's a good idea to work with a company that can make the process easier. This article will give you tips on how to make cross-border shipping in North America work better for you, like making your operations smoother and keeping track of your shipments in real-time.

WHAT IS CROSS BORDER?

WHAT IS CROSS BORDER? Cross border logistics is a critical driver of our economy, connecting consumers, manufacturers, and factories. While it comes with challenges, data and metrics demonstrate the importance of international trade and the benefits of partnering with experts in the field to overcome logistical obstacles. This article aims to provide guidance on optimizing cross-border shipping based on these insights and real-time tracking of supply chains. 1. Consumer Access: Cross-border logistics ensures that consumers can enjoy a wide variety of products. For example, in the United States, about 97% of all clothing and shoes are imported. This means that most of the clothes and shoes we buy come from other countries, demonstrating how international trade connects us to the products we love. 2. Manufacturing Needs: Manufacturers rely on cross-border logistics to obtain the materials necessary for production. In the automotive industry, for instance, over 37% of auto parts used in the United States are imported from Mexico and Canada. This data shows how international supply chains are crucial for manufacturing. 3. Timely Deliveries: Factories depend on timely deliveries of essential materials to maintain smooth operations. The electronics industry is a prime example, with more than 30% of electronics components being imported from other countries. This illustrates the importance of cross-border logistics in ensuring the steady flow of materials. Now, let's dive into the challenges of cross border logistics and how they impact the industry. 1. Visibility: According to industry research, approximately 40% of logistics professionals consider a lack of visibility into their supply chains as a significant challenge. This lack of visibility can lead to delays and inefficiencies in cross-border shipments. 2. Capacity Sourcing: Data from the American Trucking Associations shows that there's often a shortage of available trucks for cross-border shipments, especially during peak seasons. This scarcity of capacity can result in delays and increased costs. 3. Market Seasonality: The demand for goods can vary seasonally. For example, during the holiday season, there's typically a surge in cross-border shipments. This seasonality can strain logistics operations and lead to bottlenecks. To address these challenges, many businesses, both large and small, seek the expertise of transportation service providers specializing in cross-border logistics. Research by Armstrong & Associates indicates that companies that partner with such specialists can reduce transportation costs by an average of 12%. These specialists offer value-added services that help streamline cross-border supply chains.

SELECTING THE IDEAL CROSS BORDER FREIGHT SERVICE PROVIDER

SELECTING THE IDEAL CROSS BORDER FREIGHT SERVICE PROVIDER Selecting the ideal cross border freight provider is a critical decision for shippers, as it directly impacts the efficiency and success of their cross border supply chains. The complexity of international shipping demands careful consideration of various factors. Here, we delve into the crucial aspects to ponder and explore how a dependable provider: 1. Unique Operational Requirements: Every shipper has distinct operational needs for their cross border shipments. Questions abound, such as whether transloading is required, if door-to-door shipping is preferable, or whether custom brokerage services are in place. It's essential to find a provider that can accommodate these specific requirements. According to industry data, 60% of cross border shippers require transloading services to optimize their supply chains. Moreover, nearly 80% of cross border shipments have a preference for door-to-door delivery. To ensure seamless operations, it's paramount to partner with a provider capable of accommodating such unique requirements. 2. Comprehensive Services: When seeking a cross-border freight provider, shipping managers look for a wide range of services to meet customer orders effectively. These services may include transloading, intermodal options, warehouse and distribution, supply chain optimization, full truckload (FTL) and less than truckload (LTL) solutions, varied equipment choices, expedited shipping, on-demand capacity, routing guides, and round-the-clock customer support. A comprehensive survey reveals that 72% of shipping managers prioritize real-time visibility in their cross border supply chains. This is indicative of the growing need for transparency and tracking capabilities. Additionally, over 85% of shippers require intermodal transportation options to optimize their logistics operations. 3. Vetted Carrier Networks: Experienced cross border freight providers have established extensive carrier networks to facilitate international trade into Mexico and Canada. This involves a rigorous vetting process to ensure carriers have qualified drivers and suitable equipment. Compliance with safety standards and regulations is paramount, especially for Mexican carriers entering the United States. Metrics show that over 85% of shippers consider carrier qualification, such as driver credentials and equipment suitability, as a top priority. 4. On-Demand Capacity and Insurance Protection: RFlexibility in capacity is crucial for cross border operations. A survey among shipping managers reveals that 76% value on-demand capacity for their cross border freight, emphasizing the need for providers capable of accommodating fluctuating shipping volumes. Additionally, data shows that cargo insurance costs typically range from 2% to 3% of the cargo value, underlining the importance of insurance protection.  5. Technology-Driven Solutions:As technology reshapes logistics, shipping managers increasingly seek tech-driven solutions. According to industry reports, 80% of cross border shippers emphasize the importance of real-time visibility in their operations. Innovative tracking software, ensures that shippers receive live updates on all cross border loads. Furthermore, metrics demonstrate that automation reduces manual data entry, allowing companies to allocate resources more efficiently. 6. Enterprise Integration: Traditionally, data collection in cross border logistics has been a labor-intensive process. Metrics reveal that manual data entry consumes up to 20% of operational resources, highlighting the need for automation. A majority of shippers (71%) prioritize automation and streamlined data collection, recognizing the potential for cost savings and operational improvements. 7. Real-Time Visibility: One of the most significant challenges for North American shippers in cross border freight is real-time visibility. Tracking shipments across borders can be challenging, with manual check calls being the norm. 

ESSENTIAL STRATEGIES FOR SUCCESSFUL CROSS BORDER ECOMMERCE

ESSENTIAL STRATEGIES FOR SUCCESSFUL CROSS BORDER ECOMMERCE Before embarking on the journey of shipping products internationally to a global customer base, it's vital to ensure your business is fully prepared. Shipping across borders can be complex, but by implementing these best practices, you can navigate the challenges effectively:
1. Identify Your Target Market:
Begin by pinpointing the geographical locations of your potential customers. Analyze where your current customer base is predominantly located. Research indicates that, on average, only 30% of global online shoppers buy from cross border eCommerce sites. To make informed decisions, it's crucial to determine where your customers are predominantly located. For instance, if your business is primarily catering to customers in a specific region, such as Texas and New Mexico in the U.S., your focus may not be on cross border efforts. However, if you have a significant customer base in another country, like Spain, it's crucial to enable cross border transactions for those customers. 
2. Select Target Countries:
Determine whether you want to expand your shipping globally or focus on select countries. Data suggests that 45% of global cross border eCommerce sales go to just six countries: the United States, China, the United Kingdom, Japan, Australia, and Germany. The decision should align with your customer distribution. If you choose to ship globally, be aware of the costs associated with international shipping, as each country has distinct shipment costs and restrictions. Careful consideration of these factors is essential before allowing international orders on your site.
3. Evaluate Export and Delivery Taxes:
The assessment of export and delivery taxes is crucial. Metrics reveal that customs duties can add 20% or more to the cost of imported goods in some countries. For instance, eCommerce sellers in the United States typically won't encounter U.S. export regulations or taxes for B2C international sales. However, you should be aware of the de minimis value limits per shipment or sale in the receiving country, as orders above this limit may incur delivery duties. Understanding the export and import taxes associated with cross border shipping is essential, and you should determine whether your business and customers are willing to bear these additional charges.
4. Adhere to Local Regulations:
Compliance with local laws and regulations in the countries where you intend to sell is imperative. Different countries have varying product regulations and restrictions. Commonly restricted or regulated product categories include cosmetics, food and alcohol, medical and safety products, electronics, tobacco, and clothing. It's vital to research and understand the product restrictions in your destination country before accepting orders and shipping them.
5. Localize Your Online Store:
Data-driven localization is essential for enhancing customer engagement and sales. Metrics show that localized content and language adaptation can increase conversion rates by up to 70%. Furthermore, studies indicate that 55% of consumers prefer to shop in their native language. To cater to diverse markets, it's imperative to provide region-specific versions of your site with culturally relevant content, images, and prices. Data also reveals that offering local payment methods can boost sales by up to 12%, highlighting the importance of accommodating preferred payment options. Expanding into international markets presents significant growth opportunities for your business, but it also comes with unique challenges. To succeed in cross border eCommerce, take the time to understand the specific needs and regulations of each country you plan to serve. By adhering to best practices, such as localizing your online store, staying compliant with international laws, and carefully considering extra international delivery costs, your business will be well-prepared to thrive in the global marketplace.
September 14, 2023
Phuc Le
Content Writer at Amilo
September 8, 2023

Unlocking Customer Potential Experiences With LCL Logistics

Adapting to shifting consumer buying behaviors in today's disruptive supply chain environment requires a level of flexibility that many businesses currently lack. However, this adaptability can be attained through the utilization of online LCL Logistics booking. Those who embrace LCL logistics to elevate the customer experience will not only survive but thrive in this ever-changing terrain. Customer experience encompasses every aspect of customer interaction with a brand, spanning from initial engagement to post-purchase support. It plays a pivotal role in driving repeat business and long-term success. However, despite earnest efforts, brand loyalty is on the decline. Empowered by heightened expectations, evolving preferences, and the convenience of omnichannel shopping, consumers today are more discerning and less loyal than ever before. In this dynamic landscape, businesses must place customer-centric strategies at the forefront of their priorities.

WHAT IS LCL LOGISTICS?

WHAT IS LCL LOGISTICS? LCL (Less-than-Container Load) logistics refers to a shipping and logistics service that involves combining multiple smaller shipments from different shippers into a single container for transportation. This approach is typically used when individual shipments are not large enough to fill an entire shipping container. HOW LCL LOGISTICS SERVICES ENHANCE THE CUSTOMER EXPERIENCE Using LCL (Less-than-Container Load) logistics services can improve the customer experience in several ways:
  • Cost Savings Passed to Customers: LCL shipping allows businesses to save on shipping costs, as they only pay for the space they use within a container. This cost efficiency can be passed on to customers through lower shipping fees or more competitive product pricing, enhancing the overall value proposition. Data from a study by Statista indicates that shipping costs are a significant factor influencing online purchase decisions for 86% of online shoppers. Lower shipping costs achieved through LCL logistics can directly improve the customer experience.
  • Global Expansion: LCL logistics facilitates international shipping, enabling businesses to expand their market reach. When businesses can reach a broader customer base, it can lead to increased sales opportunities and access to new markets, ultimately benefiting the customer. The World Trade Organization (WTO) reports that cross-border e-commerce is growing at an average rate of 13-15% annually, showcasing the importance of global access. LCL logistics facilitates this expansion, giving customers access to a broader range of products.
  • Faster Delivery Time: By strategically positioning inventory in warehouses closer to customers, LCL logistics can lead to faster and more efficient order fulfillment. Customers receive their orders more quickly, contributing to a positive shopping experience. According to a survey by the National Retail Federation (NRF), 47% of consumers expect delivery within two days. LCL logistics, with its streamlined processes, can significantly contribute to meeting or exceeding these expectations.
  • Reduced Stockouts: Proper inventory management, made possible by LCL logistics, reduces the likelihood of stockouts. When customers can consistently find the products they want in stock, it enhances their trust in the brand and encourages repeat purchases. The Harvard Business Review highlights that stockouts can result in a sales loss of up to 10% and customer dissatisfaction. Effective inventory management, a hallmark of LCL logistics, helps prevent these losses.
HOW LCL LOGISTICS SERVICES ENHANCE THE CUSTOMER EXPERIENCE
  • Real-time Shipment Tracking: LCL logistics providers often offer robust tracking and transparency features. Customers can track their shipments in real-time and receive accurate delivery estimates, reducing uncertainty and frustration. A survey by Convey reveals that 98% of consumers consider shipment tracking important, and 84% expect accurate, real-time updates.
  • Flexibility During Peaks: LCL logistics support businesses to peak seasons or sales events, businesses can scale their shipping needs more effectively. During the 2020 holiday season, Deloitte reported a 25-35% increase in e-commerce sales. LCL logistics' flexibility in scaling operations can help businesses cope with such demand spikes, ensuring timely deliveries and satisfied customers.
  • Responsive Customer Support: Many customers today are environmentally conscious. LCL logistics can be more environmentally friendly, as it optimizes container space and reduces the need for oversized shipments. This commitment to sustainability can resonate with eco-conscious consumers.
  • Improved Communication: LCL logistics providers often offer better communication channels for addressing customer inquiries and issues related to shipping. This results in quicker problem resolution and better customer satisfaction.
A COMPARE TABLE ABOUT LCL VS FCL A COMPARE TABLE ABOUT LCL VS FCL The table provides a comprehensive comparison between LCL (Less-than-Container Load) and FCL (Full Container Load) shipping methods, two fundamental approaches used in logistics and cargo transportation. These methods differ significantly in terms of container ownership, cost structures, shipping volumes, and more, each offering distinct advantages and trade-offs. LCL shipping is advantageous for businesses with smaller shipments, as it allows multiple shippers to share a container, reducing costs. It offers flexibility in accommodating varied cargo sizes and types, making it suitable for businesses with diverse product ranges. However, LCL shipping may involve transshipment and longer transit times due to the need for consolidation and deconsolidation at multiple ports, potentially leading to a slightly higher risk of cargo damage. It is particularly useful for companies seeking cost-effective solutions and targeting multiple markets. Conversely, FCL shipping involves exclusive use of an entire container, making it ideal for high-volume shipments or bulky goods. It ensures faster transit times as it follows a direct route to the destination port, reducing handling and the associated risk of damage. However, FCL shipping may be less cost-effective for smaller shipments, as businesses pay a fixed container cost regardless of the cargo volume. It is well-suited for companies with consistent large shipment volumes and a strong presence in specific markets. Ultimately, the choice between LCL and FCL shipping depends on the specific needs and priorities of a business. Smaller businesses with variable shipment volumes may find LCL shipping more cost-effective and flexible, while larger enterprises with substantial cargo volumes may opt for FCL shipping to ensure faster delivery and better control over their shipments. TOP 7 CRUCIAL CONSIDERATIONS FOR EFFECTIVE LCL LOGISTICS SERVICES TOP 7 CRUCIAL CONSIDERATIONS FOR EFFECTIVE LCL LOGISTICS SERVICES LCL (Less-than-Container Load) logistics services offer a practical solution for businesses looking to ship goods without needing a full container. However, successfully utilizing LCL services requires careful planning and consideration of several critical factors. Here are the top seven crucial considerations to ensure your LCL logistics services are effective:
  • Cargo Consolidation: LCL involves combining shipments from multiple shippers into a single container. Consider the potential delays and complexities associated with consolidation and deconsolidation at various ports. Plan your shipping schedule accordingly to accommodate these processes. According to industry data, LCL shipments may experience delays during consolidation and deconsolidation processes, adding an average of 1-2 days to transit times.
  • Accurate Documentation: Proper documentation is paramount. Ensure all required shipping documents are complete and accurate, complying with international regulations. Accurate paperwork is essential for customs clearance and prevents shipment delays. Accurate paperwork can expedite customs clearance, resulting in a 30% reduction in clearance time on average.
  • Proper Packaging: To prevent damage during transit, ensure your cargo is appropriately packed and secured. Select suitable packaging materials based on the nature of your goods to prevent shifting or breakage. Data reveals that improper packaging can lead to damage in up to 15% of LCL shipments, underlining the significance of proper packaging materials and methods.
  • Booking Timing: Secure your LCL bookings well in advance, especially during peak shipping seasons. This ensures you have space reserved on vessels and reduces the risk of last-minute logistical challenges. During peak shipping seasons, booking LCL services at least four weeks in advance is recommended to secure space, as vessel utilization rates can exceed 95%.
  • Experienced Freight Forwarder: Choose a reputable freight forwarder or logistics provider with experience in handling LCL shipments. Their expertise will help you navigate LCL logistics complexities and ensure efficient cargo management. Businesses working with experienced logistics providers report a 15% decrease in shipping-related issues, translating to smoother LCL logistics processes.
  • Customs Compliance: Familiarize yourself with the customs regulations and requirements of the destination country or countries. Ensure your cargo adheres to these regulations to avoid clearance issues. Companies with a strong focus on customs compliance achieve a 95% success rate in customs clearance compared to 75% for those with less compliance emphasis.
  • Cargo Tracking: Leverage tracking and tracing services provided by your logistics provider to monitor your shipment's real-time status and location. This helps you stay informed and address any unexpected delays promptly. Shippers utilizing cargo tracking services experience a 25% reduction in shipment-related uncertainties, leading to more informed decisions.
 
September 8, 2023
Phuc Le
Content Writer at Amilo
August 24, 2023

International Shipping: Reach Every Corner of the World

If you want your ecommerce business to grow, considering international expansion is a logical next step. But this decision brings the challenge of figuring out how to ship products worldwide. To tackle international shipping for your ecommerce platform, you'll need a plan that suits both you and your business. You don't have to become a shipping expert, but you should grasp the available choices and find an approach that can meet your shipping needs in the future.

WHAT IS INTERNATIONAL SHIPPING?

WHAT IS INTERNATIONAL SHIPPING? International shipping involves moving goods across foreign borders. It plays a crucial role in connecting global economies and enabling sales to customers located outside your business's home country. There are several notable distinctions between international shipping and domestic shipping, primarily relating to expenses and paperwork. Compared to domestic shipping, international shipping tends to be pricier due to the longer distance traveled by the package, often involving various transportation methods such as air, land, and sea. Additionally, international shipping frequently entails the payment of import taxes and duties in the receiving country. In terms of documentation, international shipments necessitate customs forms—unlike domestic shipments. Furthermore, ecommerce international shipping usually takes more time compared to domestic deliveries.

UNDERSTANDING THE COMPONENTS OF INTERNATIONAL SHIPPING COSTS

When it comes to international shipping costs, there are four essential elements that play a crucial role in determining how efficiently you can manage global deliveries. These factors have a direct impact on both your business's operational effectiveness and customer satisfaction across the world.
1. Packaging
Before embarking on any international shipment, obtaining the right packaging supplies is paramount. Depending on the variety of shipments you handle, you might require multiple box sizes to accommodate varying product dimensions. Consider including cushioning materials like bubble wrap or stuffing to safeguard your items during transit. These packaging materials can be procured both online and at local post offices or office supply stores. Opting for a balance between sturdy and uncomplicated packaging is ideal. Customers prefer receiving products in a single, well-packaged box rather than multiple boxes of different sizes for a single item. Striking this equilibrium between durable packaging and cost-effectiveness might necessitate some research. Seek out deals and discounts where possible. For instance, if you use USPS as a business, you can order boxes for free. Incorporating packaging costs into your overall product pricing is usually straightforward, with packaging expenses ranging from around $1 to $5 per unit, depending on size and quality.
2. Cost of Shipping
Incorporating shipping costs into your pricing strategy is fundamental to setting accurate prices for your products. Achieving a balance between not incurring losses on shipping expenses and not overcharging customers is essential. Here's how to approach it effectively: Consider and Compare: The nature of your products and their sizes or weights determines how you should price shipments. Are your products consistently sized, or do they vary?  To calculate the costs of international shipping:
  1. Use a rate calculator for your selected carriers and simulate pricing for an average domestic order shipped internationally.
  2. Repeat the process for your smallest domestic sale.
  3. Similarly, calculate costs for your largest domestic sale.
UNDERSTANDING THE COMPONENTS OF INTERNATIONAL SHIPPING COSTS With these three figures, you can establish a foundation for pricing ecommerce international shipping. This exercise will also help you identify shipments that might incur higher costs than others. Utilize platforms like Shopify's shipping calculator to assess international shipping costs. Structure Your Pricing: There are three main pricing structures for international shipping: free shipping, carrier rate shipping, and flat rate shipping.
  • Free Shipping: If your profit margins allow, consider offering free international shipping. Customers appreciate this option, and it can boost sales. Calculate order thresholds for free shipping to ensure it's financially viable.
  • Carrier Rate Shipping: Integrated with platforms like Shopify, carrier calculated shipping offers real-time pricing and various shipping options. This customer-friendly option ensures that customers pay the same rate you incur for shipping through Shopify Shipping.
  • Flat Rate Shipping: If your international shipping costs remain consistent in terms of package size/weight and cost, consider employing flat or manual rate shipping.
3. Handling Charges
In addition to packaging and material costs, it's wise to include handling charges. International shipments navigate additional facilities compared to domestic orders, necessitating careful packaging. To calculate handling charges: Calculate Your Handling Costs: Determine your minimum hourly wage for preparing and packing shipments. Estimate the average time it takes to prepare an order for shipment. Multiply the hourly wage by the time required to prepare an order. For example, if it takes 10 minutes and your wage is $11 per hour, the handling charge would be $1.83. Remember that handling charges are discretionary, but they reflect the additional care required for international shipments. Customers expect to pay slightly more for quality shipping, and effective handling is a vital aspect of quality.
4. Duties and Taxes
Accounting for duties and taxes is crucial for transparency and customer satisfaction. The global cross-border ecommerce market is projected to reach $627 billion by 2022, indicating a significant market segment affected by duties and taxes. Research by the International Chamber of Commerce underscores the importance of clearly communicating these charges to customers, as unexpected fees lead to dissatisfaction and a high likelihood of returns. Implementing Delivered Duty Paid (DDP) is recommended by DHL Express for seamless customer experiences. Data from a survey by Pitney Bowes indicates that 81% of consumers are more likely to make a purchase if they know the total cost upfront, reinforcing the need to transparently include these charges in your pricing.

WHEN SELECTING SHIPPING CARRIERS, CONSIDER KEY FACTORS:

Adaptability is key in the dynamic shipping industry. Continuously reassess and refine your strategy in response to evolving offers and industry shifts, ensuring your international shipping operations remain optimized.  WHEN SELECTING SHIPPING CARRIERS, CONSIDER KEY FACTORS:
  • Costs: Amplify cost savings by employing multiple shipping carriers. While postal carriers often offer affordability, express carriers excel in speed and versatility. Regional courier services can be beneficial for addressing last-mile delivery complexities.
  • Delivery Options: Cater to diverse customer preferences by offering a variety of delivery timelines. Providing a range of choices enables customers to balance speed and cost according to their priorities.
  • Tracking and Insurance: Elevate customer satisfaction with comprehensive shipment tracking. Amilo provides integrated tracking, and you can enhance transparency by adding ePacket tracking. For added security, consider insuring parcels against potential loss or damage.
 
August 24, 2023
Phuc Le
Content Writer at Amilo

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