International Logistics for Global Ecommerce Orders
by Jaidyn Farar
The internet gives people around the world near-instant access to entertainment and information. They can watch funny videos, email coworkers, share photos, and order almost any product with just a few clicks.
But while it’s easy to share information with people on the other side of the globe, moving physical goods across borders can be complex and time-consuming. It requires in-depth knowledge of shipping carriers, customs regulations, international restrictions, and more.
Although international logistics can feel daunting, it’s necessary for success. In the coming years, more organizations will begin shipping products to consumers in other countries—one research firm predicts that cross-border ecommerce will rise 107% between 2023 and 2028.
With the right knowledge, technology, and partnerships, you can guarantee that your ecommerce business doesn’t get left behind.
What is international logistics?
International logistics, also known as global logistics, is the process of transporting physical goods and materials across one or more borders. But international logistics doesn’t just involve the movement of physical goods; it also includes the transfer of money (payment for goods), information, and documentation.
The possibilities of global trade have expanded over the years. Just 30 years ago, the first-ever ecommerce sale was made. Now, anyone with internet access can order products from countries thousands of miles away.
Doing business internationally opens up a realm of opportunities, giving you access to new markets filled with consumers who are eager to purchase your products. With an effective international logistics strategy, your business can ship products to consumers around the world quickly and affordably.
A central goal of international logistics is to maintain cost efficiency, given that international shipping tends to be more expensive than domestic shipping. You also need to have a reliable system in place to ensure that regulations are followed so customers can receive their shipments without delay.
Key international logistics processes
International logistics involves many of the same processes as domestic logistics, but businesses should be aware of some important differences.
International storage and warehousing
When selling products internationally, many organizations begin operating fulfillment centers in other countries in order to store their inventory near customers.
For this approach to work, you need to be strategic. Where are your international customers located? Placing facilities close to these areas will save money on shipping costs and speed up delivery times. In addition to customer location, consider transportation networks. Are there ports and airports located near your fulfillment centers? If so, you’ll simplify the transportation and receiving of inbound shipments.
When deciding where to add fulfillment centers, view your supply chain holistically, considering which locations will add the most value overall.
If you’re growing fast and looking to expand into international shipping for the first time, a third-party logistics provider (3PL) may be the right option. Outsourcing fulfillment to a 3PL with global reach can help you optimize your supply chain efficiency without investing in infrastructure and technology.
Customs compliance
International shipments pass through a country’s customs agency, which is responsible for controlling the flow of goods and collecting duties. Customs compliance requires you to understand and follow the regulations in each market you serve.
We’ll go into more detail about customs fees and documentation in the section “Understanding international trade regulations.”
Cross-border transportation and delivery
When transporting products domestically, many packages can be shipped via ground. This cost-effective method helps save money, and most customers don’t mind waiting a few days for their orders to arrive.
International shipping is another story, often requiring multi-modal transportation, or a combination of air, ocean, and ground transportation.
- Air. With air shipping, goods are transported via—you guessed it—airplanes. It’s the fastest mode of transportation for international shipments, making it ideal for high-value, time-sensitive, and perishable goods. The downside? It’s the most expensive shipping mode.
- Ocean. Ocean shipping involves transporting goods via cargo ships across seas and oceans. Because it’s cost-effective for shipping large volumes, ocean shipping is often used for bulky, heavy, and non-perishable goods.
- Road. Road shipping involves transporting goods via trucks or vans. It’s a flexible method for short to medium distances, allowing for efficient last-mile delivery.
- Rail. Rail shipping, or transporting goods via trains, works well for moving large quantities of goods across long distances.
Consolidated shipping is a popular way to save money and simplify customs clearance when shipping internationally. With this approach, businesses send small shipments to a consolidator service. The consolidator combines these into larger loads, then coordinates with transportation companies to ship the loads, accessing volume rate discounts. Consolidated shipping is useful for both freight and parcel shipments.
“Regulations and customs configurations … vary for each individual country. A consolidator knows what these rules and regulations are. They know what customs wants to see, [and] they know what customs does not want to see.” — Guy Gemmill, Is Consolidated Shipping Right for You?
Shipment protection and visibility
While package security is always important, it’s especially vital when it comes to international logistics. Because packages generally travel further and move between transportation modes, they have a greater chance of being jostled, roughly handled, and damaged.
To avoid damage, implement quality control measures throughout the supply chain, especially your fulfillment process. Products should be packaged securely in sturdy boxes with the appropriate infill.
As an added safety net, consider adding shipping insurance to international shipments. Look for an insurance provider that charges the same rate whether shipments are sent domestically or internationally.
In addition to ensuring package safety, put measures in place to promote visibility. Package tracking gives customers real-time visibility into their shipments, reducing anxiety and enhancing the buying experience. For your business, real-time package tracking provides valuable data about carrier performance, allowing you to predict issues and intervene quickly when you notice troubling patterns.
Tip: Easily collect and interpret shipment data using a robust data analytics platform.
International returns management
No matter where you’re shipping to, there’s always a risk that customers will return products. Simplifying returns management processes will increase operational efficiency and improve customer retention.
Return policies should be clear, customer-friendly, and in compliance with global regulations. When you approve a return, provide the customer with a prepaid return label and straightforward instructions for packaging and shipping their product.
In some cases, it might be most cost-effective to send an international customer a refund or replacement without requiring them to ship back the original product.
Understanding international trade regulations
Now that we’ve reviewed some key logistics processes when shipping globally, we’ll run through what you need to know about customs documentation, taxes and other fees, and country-specific regulations.
Note: Check individual countries’ customs websites to make sure you comply with specific laws and regulations.
Customs documentation
To clear customs, the government agency that regulates imports and exports, shipments need the correct documentation. Customs will look for specific information such as the following:
- Sender and recipient details
- Item description and value
- Package weight
- HS tariff code
- Country of origin
- Shipping method and carrier details
- Proof of payment
If you don’t provide the correct documentation, you could face delays or penalties. This is a major pain point for many ecommerce businesses; 94% of those responsible for handling their organization’s cross-border shipping said they frequently face delays as a result of incorrect classification or documentation.
Duties, tariffs, and other taxes
One of custom’s most important functions is collecting duties, taxes, and other fees.
Import duties and tariffs are taxes imposed by governments on imported goods. These fees vary by destination country and product type and are generally a percentage of the shipment’s value.
So, who’s responsible for paying customs duties? It all depends on the shipping method you use. Delivery duty paid (DDP) shipping means that your business is responsible for paying duties and other fees. Delivery duty unpaid (DDU) shipping shifts this responsibility to the recipient. Using DDP is more customer-friendly, but if you decide to use DDU, make sure to communicate with customers so they know they’re responsible for paying the fees and claiming their packages.
In addition to duties and tariffs, most countries also charge a value-added tax (VAT), goods and services tax (GST), or sales tax. Before shipping a package internationally, determine whether your business is responsible for collecting these taxes from customers and remitting them to the appropriate tax authorities.
Prohibited or restricted products
You already know that shipping carriers restrict or prohibit the shipment of certain goods domestically, and that’s also true for international shipping. Some products can only be shipped under certain conditions, while some can’t be sent by mail at all. However, when shipping to another country, you also have another consideration: country-specific regulations.
Every country has its own rules for what can and cannot be imported. For instance, let’s look at this statement by U.S. Customs and Border Protection:
“Prohibited means the item is forbidden by law to enter the United States. Examples of prohibited items are dangerous toys, cars that don't protect their occupants in a crash, bush meat, or illegal substances like absinthe and Rohypnol.”
“Restricted means that special licenses or permits are required from a federal agency before the item is allowed to enter the United States. Examples of restricted items include firearms, certain fruits and vegetables, animal products, animal by-products, and some animals.
If you sell vitamins and supplements, cosmetics, or foods and beverages, you may be more likely to face restrictions, as many countries strictly regulate ingredients and formulas. Hazardous and perishable products may also come with logistical challenges.
Challenges in international logistics
International logistics is prone to challenges that affect both businesses and consumers. Understanding these challenges helps logistics professionals find solutions, including selecting the right partners and technologies.
- Time-consuming processes. Running international logistics in-house can be time-consuming. Choosing carriers, doing paperwork, and tracking shipments all add complexity to the fulfillment process. To cut down on time, you might adopt automation technology like high-performance shipping software or outsource your international order fulfillment.
- Long delivery times. When things need to travel greater distances, especially across oceans, it takes longer. To avoid customer dissatisfaction, clearly communicate delivery times with international shoppers.
- Shipment delays. Even small issues in documentation can cause shipments to be delayed in customs. Ensure that your shipments are compliant by using technology that automatically generates correct documentation.
- Shipment damage. The frequent handling of international shipments puts them at a higher risk of getting lost or damaged. Shipping insurance helps protect businesses and consumers alike by covering the cost of shipping mishaps.
- Country-specific regulations. Every country has its own rules and regulations for what can be imported. Make sure to understand what’s off-limits before sending out a shipment.
The environmental impact of global supply chains
With the rise of ecommerce, countries around the world have become increasingly interconnected. While this has many advantages, it also has negative effects. One of the most significant is the environmental impact of transporting goods across long distances. Traditional transportation methods produce large amounts of carbon dioxide (CO2) and other greenhouse gases that contribute to climate change.
As you expand your global supply chain, be mindful of the environmental impacts of your operations. More and more countries have started creating regulations for measuring and reporting emissions. To prepare for a future of greater regulation, many organizations have already started implementing more sustainable strategies.
Shipping technology that makes international logistics easy
When shipping internationally, you have a lot on your plate. EasyPost Enterprise Shipping helps high-performance shippers simplify things, whether they’re sending packages across the country or across the ocean.
Whether you use EasyPost Enterprise as a cloud-based or on-premise solution, it will provide the flexibility and reliability you need to scale your domestic and international shipping. With sub-second processing speed, access to over 100 carriers, and 24/7/365 customer service, EasyPost Enterprise makes global expansion easy.
Get in touch to streamline your international logistics.