Comprehensive guide to cross-border e-commerce logistics

Sellers always encounter a lot of tricky things in cross-border logistics.

At first glance, cross-border transportation may be confusing and fearful. It is understood that, in addition to cost, most of the challenges that cross-border e-commerce faces are related to logistics, including customs compliance, cross-border logistics tracking, managing delivery expectations, Cross-border logistics and returns. But many SMEs have entered the booming global e-commerce market by understanding import taxes and international shipping rules and choosing the right overseas delivery partners. To this end, this article will introduce relevant knowledge about cross-border e-commerce logistics, so that your business can successfully meet the logistics challenges of international e-commerce, expand the scale of business globally, and open up a new world full of opportunities.

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Prepare for cross-border e-commerce

Before you start shipping overseas, first make sure that you can import the product to the target country or region. Some products may be restricted and require special licenses to import, while others may be strictly banned. In addition, B2C sellers usually ship small parcels by air. It is worth noting that air transportation may have additional restrictions, depending on your specific product type.

Does your product contain dangerous goods?

In the field of transportation, dangerous goods are often classified as items that may cause harm to others during transportation. Most dangerous goods are defined by the International Air Transport Association (IATA), an international organization that manages air travel.

In the field of transportation, dangerous goods are often classified as items that may cause harm to others during transportation. Most dangerous goods are defined by the International Air Transport Association (IATA), an international organization that manages air travel.

The more common dangerous items sold by online sellers are power banks, including lithium-ion batteries, powdered cosmetics, and anything that contains liquid or alcohol. If your product is dangerous goods, you need to be prepared to take extra measures to send the product overseas. These shipments may require additional documentation, be marked in a specific way, and require careful handling by the shipping company. As a result, some airlines may charge higher freight rates for these goods.

Import tariffs

Governments generally levy taxes on goods from other countries in order to:

1.Protect domestic companies from foreign competitors

2.Control the flow of certain products

3.Increase income through taxes

When you ship the goods to another country, you or your customers may be required to pay additional duties and taxes before the goods are delivered.

A simple way to calculate the tax and duty amounts of goods is to take the tax and duty percentages of the destination country and multiply them by the taxable value of the goods.

But please remember the following:

・ Tax rates and tariff percentages will be different for each country and each commodity;

Taxable value is usually based on the value of the goods, but it can also include other amounts depending on the valuation method of a country.

Do you need transportation insurance?

If your product is worth less than $ 100, shipping insurance may not be needed. Most worldwide courier companies cover domestic and international freight shipments, with up to $ 100 worth of lost value. But this may be different from a postal carrier. For example, if you use the USPS (U.S. Postal Service) Speedpost service, USPS only offers $ 100 in automatic insurance.

It's worth noting that these are the scope of the stated value insurance, which means that this is the biggest liability of the shipping company when the packaging is damaged or lost. If your goods are worth more than $ 100, to avoid damage caused by damage or loss, you can consider buying other insurance for overseas goods.

Provide multi-channel logistics solutions

A good way to avoid cross-border transport overruns is to work with multiple transport companies. Working with only one shipping company may limit your customers' shipping options and run the risk of paying higher shipping costs because other local shipping companies may be able to offer more competitive prices in your destination country.

Providing multiple transportation solutions not only meets customer expectations, but also stimulates customer loyalty by providing flexible delivery. To find a better operator for your business, it is important to compare prices, delivery times, and tracking quality.

Price: It depends on the type of operator you use. Generally postal operators (such as the US Postal Service) are the cheapest, while courier companies are more expensive (but it can provide better services).

Delivery time: Some customers want fast delivery, while others are willing to wait. Providing different solutions and different delivery times will help you attract more customers.

Tracking quality: Selecting an operator that provides good tracking will reduce the number of customer service requests and the risk of goods being lost overseas.

Choose an overseas delivery partner

There are many benefits to working with delivery partners located in the same country or continent, such as:

Reduce shipping costs for manufacturers or suppliers. If your fulfillment partner is closer to the warehouse, you can also save the cost of shipping goods from the factory.

May save taxes and duties. By using an overseas warehouse as the first place of delivery for your product, your business can go through customs formalities and handle any additional taxes and duties that need to be paid, which also removes the barrier for customers to pay taxes.

・ Provide customers with faster and cheaper delivery services. The closer the distance to customers, the lower the transportation cost and the faster the delivery time, which will increase customer satisfaction.

・ With outsourced professionals handling your order fulfillment, products will be packaged safely and quickly.

What happens after shipping overseas?

Here's what happened when your shipment first arrived in the country of destination.

1.Customs officials will check your shipping documents

All international shipments require air waybills, commercial invoices and customs declarations. Commercial invoices include important information such as the contact information of the shipper and consignee, a description of the products shipped, and their total value.

2.Customs officials will determine whether the goods are taxed

This will depend on the type and value of the goods and the laws of the country of import. If it is determined that the value of the goods is higher than the threshold, customs officials will check whether these taxes have been paid.

3. If not paid, the customs will require payment of taxes and duties

If the goods are marked as DDP (Delivery Duty Paid), this means that taxes have been paid. Some courier companies have their own customs broker and they can process the payment for you. However, if the goods are marked as DDU (Unpaid Delivery), the customs will forward the package to an independent customs broker to collect the required amount, and these customs brokers will contact the payee to collect the payable amount.

4. Once it is confirmed that unpaid taxes and duties have been paid, the goods will be released and continue to be shipped to their final destination.

As long as you have the necessary documents and understand how to handle taxes and duties, the goods are generally cleared.

What are the challenges of cross-border logistics?

In the process of cross-border transportation, sellers often encounter some tricky things:

1.Unpaid taxes

Some sellers prefer to send DDU (Undelivered Duty) shipments, as this will make the delivery cost cheaper when placing an order. However, this does not mean that the tax will be cancelled, the seller needs to communicate with the buyer, and the buyer will pay the duties levied when the goods arrive at customs. But usually, for buyers, they don't even know that they need to pay customs duties. Once they receive a call from the customs to pay, it may have a negative impact on your customer experience. Therefore, in order to obtain a smoother shipping experience, new sellers of international shipping are advised to prepay customs duties for buyers first.

2. The goods are stuck at the customs

There are many reasons for the detention of goods at the customs, and the severity is different. For example, the prohibited goods or the documents are incorrect. In order to get your goods out of the customs restrictions, it is recommended that you do the following:

・ Contact the courier company directly. Some shipping companies may also be customs brokers, and they may look directly at your shipment to help you identify the problem and provide advice on how to clear it.

Find out if there are unpaid taxes. If you have not paid your tax, please arrange payment as soon as possible to settle the remaining balance.

Make sure there are no missing or wrong documents. Provide any additional details, amendments or documents that the customs officer needs to process.

3. Handling international returns

Handling international returns is tricky, but 67% of shoppers check the e-commerce site's return policy before deciding to buy.

Here are some suggestions for handling international returns:

Choose a courier company, they are more reliable in tracking and have the ability to handle any customs issues;

Find a platform that can help you with automatic returns. There are many software on the market that can help you set up an automatic return process and allow customers to print shipping labels for returns.