The growth of e-commerce has changed the way we buy and sell goods. This fundamental transformation in our daily lives has deepened over time, and the global Covid-19 pandemic only accelerated it. E-commerce expansion is happening everywhere, and one way for an e-commerce business to increase its market is to go beyond its borders. However, this decision to move into international markets needs to be accompanied by a successful cross border shipping strategy. Let’s take a look at the building blocks of a successful strategy.
What is cross border shipping?
When expanding into a market beyond your company’s home borders, a choice needs to be made between:
- Locate a new warehouse for your products within the borders of the new international market and ship internally.
- Maintain your existing warehouse within your base country and ship internationally from there.
If you choose option two, you will be using cross border shipping. This cross border option has its benefits but also comes with challenges and essential things to consider.
Benefits of cross border shipping
Manufacturing goods away from your home country and building new warehouses in a foreign country can be expensive. It can also come with quality control and supply chain issues. Cross border shipping helps you keep your manufacturing base and warehouses closer to home while also expanding your brand into an overseas market.
These benefits are best realized with proficient operation management of your product from manufacturing all the way to the end user. Cross border cargo transport that moves it from point a to point b is only one part of cross border strategies. Planning and maintaining cross border logistics to store, transport, track, package, and deliver your product to your customer is vital to your success.
Important Considerations in Cross Border Shipping
Local, Local, Local
You know your industry and how to sell your product in your home country, but when branching into a cross border strategy for your brand, you need to think locally. Your first step is to research your new market with a focus on:
- Your new customer
- Your new country’s infrastructure
- Your new country’s language
Research with a Customer Focus
Conduct research on local markets from the perspective of a local customer. It’s difficult to choose a cross border freight carrier if you do not understand your local customer’s needs, expectations, and preferences.
- How fast your new customers expect to receive products
- How much they expect to pay for it
In some countries, customers do not expect to receive orders as fast as in other countries. While in some countries, customers may expect to receive an order quickly but not to pay for it. Then in other countries, paying a premium for expedited shipping is the norm. Doing your research helps you understand your customers’ needs and offer delivery options and pricing that fit their expectations and local preferences.
Research with an Infrastructure Focus
The transport and logistics market is different in every country. Before deciding on a cross border carrier, research the rules and regulations in your new market. Some parameters that exist may be more prohibitive than expected, and others may be less. Still, you need to understand how they affect delivering your product to your new customers in a timely and cost-effective way. You do not want a delivery delay due to a misunderstanding of regulations. It’s a costly mistake.
Research with a Language Focus
Language barriers are real. Don’t get your business stuck behind one. Build your website with an understanding of the local language. Research carriers that provide consistent translation and interpreter support.
Choose Your Cargo Carrier with an Eye on Cross Border Logistics
Once you understand your new customer’s language, expectations, and preferences, along with the local shipping infrastructure in your new market, choosing the right carrier to meet your needs becomes easier.
Find local cargo transport services that:
- Make the rules and parameters of the shipping infrastructure in your new market easier to navigate. They understand local routes and customs procedures.
- Have experience delivering in the timeframe and costs that your new customers demand. They have invested in vehicles, equipment, technology, and reliable drivers to ensure this.
- Are efficient, trustworthy carriers who provide the best uninterrupted service. They safely handle and transport cargo cross border, including tracking, planned routes, insurance, and maintenance.
Payments and Transactions
Since receiving payments for your goods is foundational to the success of your business, understanding and effectively navigating cross border transactions is an important part of your cross border shipping strategy. Cross border transactions include different currencies exchanged through multiple banks. This can cause mistakes. Considering some specific challenges helps correct mistakes before they become costly.
A few specific challenges to consider:
- Calculating demand – A wrong calculation of the demand in a specific market can mean over-supplying or under-supplying a product.
- Settling refunds – Be clear and specific with your customer on how refunds will be handled.
- Offering payments in local currency – Customers do not want to calculate exchange rates. Do this for them, but calculate accurately.
- Invest in technologies that help with cross border transactions.
Specific Challenges of Cross-Border Shipping
The global supply chain is complex and susceptible to disruptions. A successful cross border shipping strategy must address the inherent risks and challenges in doing business overseas.
Common Cross Border Issues
- Changing Regulations – Rules and regulations can change at any time. Stay up-to-date and avoid unanticipated costs.
- Customs Delays – Incomplete or incorrect paperwork at border crossings causes shipping slowdowns. Again, stay up-to-date on proper paperwork. Communicate changes and procedures to your logistics team.
- Compliance Risk – Laws change. Ensuring your business is following compliance rules prevents the risk of costly penalties and border delays.
- Lack of visas and permits – Make sure drivers have their paperwork in order too.
Invest in technologies that manage shipping logistics. Using tools to track the movement and inventory of goods along with risk assessments goes a long way in shoring up problems.
Facing Challenges In The Shipping Industry
The shipping industry is facing challenges in 2021 as the industry adjusts to the changes accelerated by the effects of the pandemic on global markets. Considering these shipping trends and challenges becomes even more important in cross border shipping.
Current Issues to Consider:
- Container Shortage – An absence of shipping containers produces a ripple effect on supply chains and shipping delays.
- Rising Freight Costs – Delays and disruptions raise costs.
- Truck Driver Shortage – A lack of truck drivers shrinks shipping capacity.
- Shipping Route Disruptions – Glitches in shipping routes creates a shortage in goods and raises costs.
- Security Risks – Cyberattacks on trucking companies and shipping lines increase business risks and raise costs.
- Supply Chain Disruptions – Problems along the supply chain impacts costs and logistics planning.
- Port Congestion – Bottlenecks at ports dominoe through shipping capacity, triggering delays.
Monitoring shipping industry trends is imperative, along with world events and changing laws, to assess potential problems for your business. Continuous analysis of procedures and strategies coupled with effectively updating them means the difference between costly mistakes and successful cross border transport.
A Successful Cross Border Shipping Strategy
Effectively stacking the building blocks of your cross border shipping strategy will make expanding your brand into new international markets more profitable. Research with a local focus on customers and country is a building block that helps alleviate costly mistakes. Considering how international payments and transactions will be calculated and handled is another building block to ensure consistent revenue. Developing, investing, and maintaining effective cross border logistics is a building block that cannot be overlooked. Monitoring shipping industry trends and investing in technologies that help with capacity, disruptions, and delays is a necessary building block. Putting all these blocks together is the final step towards a successful cross border shipping strategy.