International Logistics: Advantages and Challenges for Ecommerce Stores

In the past, going global was only an option for enterprise brands and the largest retailers. Today, ecommerce businesses of all sizes have more resources than ever before to expand internationally. 

Thanks to globalization, getting in front of an international customer base is a huge opportunity. In fact, cross-border purchases will comprise20% of all worldwide ecommerce by 2022.

However, the international ecommerce market is competitive:62% of merchants already have a cross-border ecommerce business. So how does an ecommerce business expand into international markets with a competitive edge? 

It all comes down to having a strong international logistics strategy. Shipping international orders is complex, not to mention can be costly and time-consuming, but with the right technology, fulfillment infrastructure, and logistics expertise, you can easily launch into global markets with ease. 

In this article, you will learn the ins and outs of international logistics to stay competitive, save onlogistics costs, and meet customer expectations. 

What is international logistics?

International logistics is a process that involves the transportation offinished goods through an international supply chain. It consists of cross-border shipping and international distribution to efficiently deliver goods to end users across the globe. 

What international logistics involves

Though it’s never been easier fordirect-to-consumer (DTC) brands to break into new markets, establishing an internationalecommerce supply chain adds an extra level of complexity.

From the types of products you can sell and transport overseas, to additional costs ofshipping international, there is much more involved ininbound and outbound logistics when building a global brand.

Here is an overview of what internationallogistics operations involve.

1. Handling of goods

If you’re looking to expand into new markets, you will need to evaluate your currentphysical distribution of goods. For instance, if you’re storing inventory and shipping orders from a single warehouse location in your home country, you will have to calculate how much it will be to ship an international order overseas (taking landed costs into consideration).

There are several options here: you can still ship international orders from your home country, but you might want to move or expand into a warehousing location that will reduce shipping costs to reach the border before it gets sent overseas. 

Or, if you’re seeing a large volume of orders from a different country, you can store some inventory in afulfillment center within that country and have orders picked, packed, and shipped from there.

Global fulfillment reduces many common customs and tariff issues since inventory is already stored within the country and can be shipped domestically.

2. Mode of transportation

Depending on your budget and delivery timelines, you can choose from different modes of transportation to carry your goods to the customer: parcel orfreight shipping, and air, sea, or ground shipping. To make the right decision, you have to consider time, cost, and reliability of each and determine what works for your margins.

Based on where you ship from and where you’re shipping to, most often several modes of transportation are involved in delivering an order to an international destination — especially if you’re dealing with cross-border shipping.

3. Transportation process

As the shipper, you send goods to freight forwarders. They liaise with multiple carriers to find the best shipping options (via freight forwarding). Next, the goods are loaded onto trucks, planes, or ships and sent on their way to the end customer. At the destination port, after customs clearance, the goods are unloaded and transported to a specific customer address. 

The transportation process for international orders can get tricky. Delivery times vary, depending on where you’re shipping to, and many times is slow, since orders are being shipped to another country to different governing bodies and sometimes via several modes of transportation. 

To make sure all goes smoothly, double check shipping documentation and the product that you’re shipping meets the country’s trade rules and regulations.

Lastly, it’s important that you make estimatedlast-mile delivery times and any duties they will incur clear with your customers, and then communicate with your customers on any order updates as they wait for their package to arrive. 

4. Customs and import duties

Withglobal shipping, you will deal with additional fees, including customs andimport duties (taxes). An import duty is a tax placed on imports by customs authorities in the destination country of the shipment. These duties vary by country and are dictated by the value of the goods being imported.

All global orders need to be cleared through customs of the country they are entering; this involves quite a bit of paperwork. You must include the right details (e.g., tariff codes, dollar value, and product descriptions), so orders don’t get held up.

As the shipper, you are responsible for communicating these additional fees to your customers. If a customer is not aware upfront of the additional duties they will have to pay to receive their package, they may never claim it and you are liable for packages that get held up at customs.

That’s why some ecommerce brands chooseDDP shipping (delivery duty paid), in which the seller takes responsibility for all risk and fees of shipping goods until they reach their destination. This way, you won’t risk orders getting sent back when a consumer refuses to pay additional duties and fails to receive the package when it enters their destination country.

What are the challenges of international logistics?

Expanding into international markets can be challenging for several reasons, and it mostly all comes down to logistics. Here are the common challenges that hold ecommerce businesses back from going global.

Time-consuming

If not managed properly, internationallogistics operations can be a huge headache for ecommerce companies. Every aspect of the cross-border supply chain, from choosing the right carrier partners to tracking the flow of goods and calculating international shipping costs and transit times, takes a lot of time and energy. 

Since there is so much opportunity in going global, many international ecommerce brands reap the benefits of outsourcing international logistics to athird-party logistics (3PL) like ShipBob that has the infrastructure, technology, resources, and expertise to ship international orders efficiently and affordably.

“We had 3 ecommerce stores connected to 3 different 3PL warehouse management systems in 3 different countries, and I had to work 60 hours a week to keep up. All of our backend work had to be done 3 times and wasn’t always consistent.

While our customers were happier and we could grow our domestic business in each country, I was drowning, going backwards in terms of efficiency. While we technically had a global reach and footprint, it wasn’t convenient for us so we kept looking for a better solution.

Then, we found ShipBob. It was somewhat serendipitous and a no-brainer. I always wanted a truly global fulfillment partner — I had been trying to find this solution for years.”

Wes Brown, Head of Operations at Black Claw LLC

Late shipments

Not only can shipping far from your home country increase transit times, other issues such as customs can cause delays in delivery. No matter where your customers reside, fast and affordable shipping is expected. And chances are, if you’re selling ahigh-demand product overseas, there is going to be competition. 

But there are solutions to reduce cross-border shipping delays. One way is tostore inventory within the country you’re shipping to, which reduces transit times significantly, saves you on shipping costs, and allows you to worry less about international orders getting held up at customs. 

This will not only save you money, but it will also help you meet customer expectations no matter where they live.

International customs & taxes

Each product has a tariff code associated with it for customs. When you ship the goods internationally, you will need to ensure that the right codes are assigned to each SKU, and taxes and other import costs are calculated accurately. 

If not managed correctly, your business could face legal action and costly delays if you accidentally assign the wrong code, undervalue shipments, or fill in the wrong details in your customs paperwork. To ensure there are no delays at the border, double check all your documentation. 

“International shipping is very important to us — not only in terms of costs but also the customer experience. When I found out ShipBob was expanding into both Canada and Europe, I knew we wanted to expand our physical footprint with them. This would offer us the ability to reduce taxes and tariffs that come with international shipping.

We found that sending inventory to Europe involved less paperwork and was faster than expected. The process of getting inventory sent to ShipBob’s fulfillment center location in the EU was very streamlined.”

Nikolai Paloni, Co-Founder ofOmbraz Sunglasses

Poor returns management

Returns are often an unavoidable part of a growing ecommerce business. But handling returns can get tricky, especially with international orders. Return delays will not only frustrate your customers, but it can also result in profitability cuts in terms of reverse-logistics costs.

If you invest time into creating an efficientreturns management process, it can highly benefit your business. In fact,92% of shoppers are willing to purchase from the retailer again if they find the returns process to be easy. 

6 tips to nailing international logistics

To reduce headaches, save money, and make shipping worldwide worth the investment, here are some tips and best practices that will help you optimize your international logistics operations.

1. Check how your products are classified

It’s important to check that all of the products that you wish to sell and ship internationally are allowed to cross and enter foreign borders. Many countries restrict the types of products that can be imported from other countries (even a single ingredient found in your product can cause issues at customs). 

This includesprohibited items (e.g., those that are consideredHAZMAT or dangerous goods), packages over a certain weight, and other restrictions at the country-level. Though there is no universal product classification system, different countries use standardized coding systems to distinguish between products.

2. Choose the right packaging

Choosing the right packaging is always important, no matter where you’re shipping to. But with international orders, you’re dealing with packages being in transport for much longer than a domestic delivery, so pay extra attention to packaging.

Before shipping overseas, check the dimensions of your different order sizes.Dimensional weight may likely apply to your shipments and cause the shipping cost to increase, so entering weight and dimensions helps ensure accuracy of the amount charged. It’s a best practice to round up on weights at the pound or ounce level.

You will also want to make sure thatfragile items are packed well with the right amount ofdunnage, and can safely be transported and delivered damage-free, whether orders are being delivered via truck, plane, and/or boat. Rough, long trips through different climates can also damage items easily. Some items will also need additional certain packaging requirements to go overseas.

3. Calculate international shipping costs

Every online retailer wishes to sell globally. But before letting your customers know that you offer free international shipping, make sure it’s a viable option. To assess the feasibility of international shipping, you need tocalculate shipping costs based on package measurements, shipment type, weight, international destination, etc. 

“Our greatest barrier was how expensive it was to ship to the United States from Canada, costing about 50% of our average order value. We spent anywhere from $18 to $25 for a one-pound shipment, and it would take a minimum of 7-10 business days to reach the destination.

Since moving to ShipBob, we’ve seen a reduction of 70% on shipping costs in the US, which helps keep conversions high and went from 20% of our customers being in the US to 40%.”

Greg MacDonald, CEO & Founder ofBathorium

When expanding internationally, make sure you do thorough research on import laws, taxes, andimport duties (which can be different for each country) to determine how much it will cost you.

Being proactive in calculating shipping costs can also help you determine which international markets are not feasible for you unless you increase youraverage order value.

4. Update your website and shipping policy

If you’re looking to ship to different countries, it might be worth updating your website to include new shipping destinations and any additional information related to your internationalshipping policy.

An international shipping policy should include mention of shipping costs and methods and estimated delivery times, and specifies additional shipping fees and taxes — and whether or not the customer is responsible for paying them.

“I’ve also been fortunate to ship orders to customers from around the world. The process of shipping internationally to optimize costs has been easy. There’s no difference on my website for international shipping except adding tariff codes on products. Otherwise ShipBob handles everything for me.

Best of all, the price that ShipBob charges to ship internationally is less than it costs for me to print a USPS label myself.”

Anastasia Allison, founder ofKula Cloth

Depending on the size of your business, you may want to open unique online stores tailored for each country or region. Another option is to optimize your current website for international buyers with a multi-language translator tool as CAT (Computer-Assisted Translation) tool or createlanding pages optimized and tailored for different countries or regions.

Finally, some other considerations include:

• Tell your customers in that country that you’ll be fulfilling locally (e.g., if you’re expanding in Europe with a facility in the EU, this applies to all countries in the EU). This can help reduce cart abandonment previously attributed to the perceived pains of international shipping like expensive shipping, long delivery times, and having to pay customs and other import duties.
• Update your checkout to show local rates and estimated delivery times, and make sure your store is in local currency.
• Mitigate consumer confusion and increase conversion by making sure product pricing and shipping rates in your UK store are shown in local currency.

5. Estimate shipping times and international tracking

By letting customers know when to expect their package, you can easily manage their expectations. Make sure you haveorder tracking set up that will offer customers real-time updates. 

“ShipBob also provides tracking, even for international orders, and helps with overseas customs. Through ShipBob, I can use DHL and other services to help meet customers halfway.”

Lee Nania, Founder ofSubSubmarine

6. Find an international logistics partner

As mentioned earlier, establishing an international logistics strategy is time-consuming. That’s why many international ecommerce brands invest in an international logistics partner to outsource fulfillment and automated shipping. 

“While our customers were happier and we could grow our domestic business in each country, I was drowning, going backwards in terms of efficiency. While we technically had a global reach and footprint, it wasn’t convenient for us so we kept looking for a better solution.

Then, we found ShipBob. It was somewhat serendipitous and a no-brainer. I always wanted a truly global fulfillment partner — I had been trying to find this solution for years.”

Wes Brown, Head of Operations atBlack Claw LLC

A 3PL partner can help you with almost every aspect ofdigital fulfillment and shipping when launching into a new international market. When researching 3PLs, ask them about their international fulfillment services and how they can help you get set up quickly.

Partnering with a 3PL that offers both domestic andinternational fulfillment capabilities can solve many of the common challenges of international shipping. Instead of shipping every order across borders, you can bulk ship inventory to an international location so orders can be shipped within the country (or, for example, within the EU or UK). This process makes it much easier to expand globally while reducing the international shipping risks and costs.

“I used to ship orders myself through the Australian Post. I had to manually fill out customs forms, put together the box, pack every order, and run to the post office myself. It would take me a full week to send out over 100 orders and I would spend up to two hours at the post office.”

Lee Nania, Founder of SubSubmarine

Best of all, you can manage inventory and orders that are being fulfilled across the globe from the same dashboard as your domestic shipments, working with the same support team, and having a simplified, consistent experience.

“As our customer base grows, so does our global reach. Having orders shipping internationally, ShipBob’s affordable rates solved our need for international fulfillment capabilities.”

Carl Protsch, Co-Founder ofFLEO

Why partner with an international logistics company?

ShipBob, aglobal fulfillment provider, works closely with ecommerce businesses to deliver orders as quickly and accurately as possible by reducing overall costs. With a growing, international fulfillment presence, you have the option tosplit inventory across multiple fulfillment centers based on where customers are located across the world.

“When I first started looking at ShipBob, it sounded too good to be true with their international locations that could cover all my bases (eventually even getting into the United States and Canada). We just got started in ShipBob’s EU fulfillment center, and will next expand into their London facility to continue building momentum in the UK.

When I was shipping orders myself, what I paid per order is the same price now to pick, pack, and ship orders through ShipBob. It’s even much cheaper to ship to certain countries, which used to take ages and often got lost with localized post here. Now, I have very transparent pricing, and I can easily run and plan my business.”

Leonie Lynch, Founder & CEO of Juspy

Here is an overview of the many benefits of partnering with international logistics company like ShipBob:  

Reach international customers

The biggest benefit of commissioning a well-known logistics solutions company is that it allows you to reach all of your customers, wherever they are in the world. Thanks to their existing relationships with international freight specialists you also gain access to more carrier options and shipping destinations than ever before.

For instance, ShipBob offer a growing fulfillment center network, with location across the United States, as well as in different countries.

“We had a distribution point in the UK in London, but anticipated that cross-border shipping issues would become more prevalent with Brexit pending, as we realized a good chunk of our customer base in the EU wouldn’t be able to as easily receive shipments from the UK, as it may be more expensive with longer shipping times.

We reached out to ShipBob, as we became more concerned with Brexit and wanted a fulfillment center in the European Union. Beyond taking care of all of our European orders, we quickly became very impressed by ShipBob’s transparency, simplicity, and intuitive dashboard.”

Harley Abrams, Operations Manager of SuperSpeed Golf, LLC

Save on shipping costs

Though the cost to ship internationally will depend on the destination country among other factors, ShipBob can help you come up with a distribution strategy that will optimize shipping costs.

With ShipBob, there are multiple ways you canreduce shipping costs for international orders: you can choose to store inventory domestically and take advantage of ShipBob’s negotiated carrier rates, or you can bulk-ship inventory to one of ShipBob’s international fulfillment locations, so you can ship domestically in other parts of the world. 

“When COVID-19 hit, shipping methods suddenly became more limited and expensive to the point where it would not be feasible to ship through the Australian Post to fans in the United States (costing about 20 USD or 28 Australian dollars per package and getting stuck in transit).

With ShipBob, I’m able to offer competitive shipping rates within the US and move more units than I would shipping from Australia with ridiculous postage prices.”

Lee Nania, Founder ofSubSubmarine

Expand to new markets

Are you ready to scale your online business to where you customers are? A 3PL like ShipBob can help you launch into markets and expand your customer reach while keepinglogistics costs at a minimum.

Rather than investing time and money into building an international logistics strategy, a 3PL already has the distribution network and technology needed to meet customer demand, even internationally, with faster, affordable, and consistent shipping.

“As we expand our online presence into Canada, we knew we needed a trusted fulfillment partner with a physical presence in Canada.

We have seen that Canadian customers order more when they know the order ships from within Canada and they do not need to worry about additional taxes if the order comes from the US.

From our history through the years with ShipBob, it was a no-brainer to expand into other markets with them, knowing that they have done their due diligence to meet the ShipBob standard.”

Marc Fontanetta, Director of Operations atBAKblade

Easily fulfill orders

With the right physical and digital logistics partner by your side, you can now fulfill these orders without ever worrying about things likestock issues or shipping costs and delays. 

In addition to offeringexpedited shipping for international orders, ShipBob can offers international fulfillment center locations to store your inventory and get your orders delivered faster. With multiple strategic locations, we automatically ship orders from the location closest to the destination address.

ShipBob also uses its own proprietary 3PL software that gives merchants real-time updates on inventory stock levels, orders status, and international tracking for orders that have shipped (e.g., via UPS, DHL, and FedEx).

Once an order is shipped, you are sent tracking information, so you can automatically share it with your customers. ShipBob also partners with major carriers to offer discounted domestic and international shipping rates.

“ShipBob has multiple fulfillment centers in the US, one in Canada, one in the EU, and one in the UK.* All locations filter back into one centralized warehouse management system, so everything is under the ShipBob umbrella.”

Wes Brown, Head of Operations atBlack Claw LLC

*View all the latest ShipBob locations here.

How ShipBob helps you ship internationally in 4 steps

Shipping internationally comes with challenges, but that doesn’t mean it’s not manageable — especially if you partner with a 3PL like ShipBob.

ShipBob offers an international fulfillment network with locations all over the United States as well as in Canada and the European Union, and can ship to every country in the world. Here’s how itecommerce international selling works with ShipBob: 

Step 1: Integrate your ecommerce shop and send ShipBob inventory

ShipBob has native integrations with leading ecommerce platforms and marketplaces. Thanks to this functionality, you can easily connect ShipBob’s technology.

Once your products are synced, you can ship your inventory to one or more of our fulfillment center locations. Once orders are placed, they will automatically be sent to ShipBob to be fulfilled and shipped. 

Step 2: Set up international shipping options

ShipBob can ship orders internationally, but you have to configure your international shipping options to ensure pricing consistency. Through the ShipBob dashboard, you can easily to map domestic ship options to international ones. Learn how to set up your international ship options in ShipBobhere.

Step 3: Set up customs information

The next step is to fill incustoms information (tariff codes, sales prices, and detailed descriptions) about each inventory item in ShipBob’s dashboard. Getting this step right will ensure that your shipment flows smoothly across the border without delays.

Step 4: Expand into fulfillment centers across the globe

As your business grows internationally, you can choose to expand to new markets. If you’re seeing a large volume of orders in a different country, you have the option to expand into one of ShipBob’s international fulfillment center locations.

That way, you save on costs and speed up transit times by shipping a bulk of inventory internationally and have international orders fulfilled and shipped within the country. 

Conclusion

International logistics can be complicated, but you don’t have to navigate the complexities alone. ShipBob makes it easier to launch into new, international markets with confidence. 

With our growing global fulfillment network, powered by out best-in-class technology, you’re able to expand your business globally with ease, while reducing shipping costs, speeding up transit times, and creating a great buying experience for your customers everywhere. 

“We want to continue to spread our brand internationally and are glad that more of our customer base can get better shipping rates and delivery times. We’re still a small operation, but with ShipBob we can be a more global company.” 

Wes Brown, Head of Operations atBlack Claw LLC

To learn more about ShipBob’s international logistics capabilities, read this review or click the button below and we’ll be in touch.  

International logistics FAQs

Here are answers to the most common questions related to international logistics:  

What are the benefits of international logistics?

One of the best things about launching an ecommerce brand is that it’s easier than ever before to expand into international markets. 70% of online shoppers purchase internationally, which means there is a lot of room to grow your business globally. 

How does shipping internationally work?

A lot of research, logistics planning, and communication goes into international shipping. Though picking and packing an international order is similar to a domestic order, shipping internationally gets complex, as a package must travel through different countries to reach its final destination. When shipping goods globally, you need to consider additional shipping costs, regulations by country, and import duties.

What is the best international logistics company?

ShipBob is an international logistics company with fulfillment center locations across the US, as well in the England in the UK, Poland in the EU, Australia, and Canada. ShipBob allows you to ship inventory to an international fulfillment center, so you can skip the need to pay for international shipping for every individual order while speeding up transit times.