In an era of global manufacturing, where efficiency is everything and supply chains are more complex than ever before, strategic and thoughtful implementation of artificial intelligence software has the potential to revolutionize how we do business By
Nykaj Nair
24 THE GROWING GLOBAL FOOTPRINT OF OPEN LOCKER NETWORKS By Austin Maddox 26 MANAGING CROSS-BORDER RETURNS By Tony Sciarrotta
28 NAVIGATING WAVES: EXPLORING TODAY’S CHALLENGES AND WINS IN OCEAN TRANSPORTATION By Agustin Lopez 30 CLOSING THOUGHTS By Merry Law
Wicks-Farr
By
Brent Wm. Primus, J.D
07 TAKE YOUR INTERNATIONAL SHIPMENTS TO THE NEXT LEVEL 5 Companies Who Can Help You Optimize Your Operation
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EDITOR’S
NOTE
GLOBAL SUPPLY CHAINS REQUIRE MORE AGILITY THAN EVER
By Amanda Armendariz
The small-package industry is constantly evolving, and shippers must stay agile to remain competitive. Recent weeks have further disrupted supply chains, highlighting the importance of preparation.
The severe impact of Hurricane Helene underscores the need for contingency plans in the event of weather-related disruptions. If container ships can’t reach ports due to hurricanes or other events, do you have alternative options? Is a disaster relief plan in place for the potential loss of a distribution center?
The recent (fortunately brief) port strike, suspended as negotiations by dockworkers continue, also reveals the unpredictability of global supply chains.
While some factors are beyond your control, there are many within your influence. Carrier contract negotiations, leveraging AI to improve operations, and optimizing cross-border returns are just a few areas where you can make a significant impact. This special issue of PARCEL covers all the key strategies global shippers need to thrive in an ever-changing landscape. We hope you find it valuable.
As always, thanks for reading PARCEL.
EDITOR’S PICK
Here are some of the most-read articles on our site in recent weeks. If you haven’t already checked them out, you might want to — there is some great information in there!
Pitney Bowes’ Exit from Global Ecommerce (Newgistics): What It Means for Your Business
By Scott Riddle
By Sunderesh S. Heragu
What’s the PMG’s Plan? By Jim LeRose
The Impact of Weather on the Supply Chain
5 Companies Who Can Help You Optimize Your Operation
Alexandretta Transportation Consulting specializes in reducing small parcel rates and optimizing parcel agreements in Europe, Canada, Asia, and the United States. Whether negotiating agreements for international shipments coming into and out of the US or negotiating agreements in an entirely different geographic region, Alexandretta brings the skills and knowledge that drive cost savings. Our expertise in offshore markets allows us to guide clients on carrier selection, service quality, and transit times, as well as when to negotiate by region and when to pull multiple regions together. We take the complexity out of shipping and deliver the transportation advantage.
Caljan delivers reliable automated solutions that simplify global and cross-border parcel shipping. We help streamline parcel handling, loading, and logistics processes to boost efficiency, cut down on errors, and speed up shipping times for e-commerce and logistics companies across the globe. From telescopic conveyors to automated loading and unloading solutions, Caljan makes it easier to process international shipments faster, increasing throughput and ensuring packages arrive on time. Our flexible solutions fit seamlessly into existing operations, allowing businesses to scale effectively and keep up with the growing demands of cross-border e-commerce, all while staying accurate, safe, and cost-efficient.
In the ever-evolving shipping and logistics landscape, ePost Global stands out with over 25 years of experience, successfully delivering personalized end-to-end solutions by simplifying international shipping, and we have now extended our coverage to domestic markets. With reach to over 200 countries, we have the largest network of last-mile carriers to give you the best balance of rates and services. Experience the total package for your e-commerce shipping with ePost Global — offering expanded options, enhanced service, and tailored solutions to help you reach more customers.
FirstMile’s Xparcel International is a proprietary ship method designed to optimize every international shipment, providing cost-efficiency without compromising service quality. It offers flexible DDP and DDU options, simplified billing and reporting, and supports international e-commerce growth. In addition to international shipping, FirstMile provides optimized domestic shipping, returns management, and LTL services, making it a comprehensive solution for end-to-end logistics. Ready to expand your reach and reduce costs? Choose FirstMile’s Xparcel and experience shipping redefined.
888.993.8594 | shipping@firstmile.com
At GLS US, we specialize in seamless cross-border and global parcel shipping, offering efficient, reliable, and fully integrated logistics solutions. Our vast network, spanning both Europe and North America, ensures quick, hassle-free delivery with end-to-end tracking and customs expertise to streamline cross-border processes. We handle the complexities of international shipping — customs clearance, regulatory compliance, and duty calculations — so businesses can focus on growth. With fast transit times, transparent pricing, and tailored solutions, GLS US provides a smooth shipping experience that minimizes delays and maximizes customer satisfaction for companies navigating the challenges of global logistics.
www.gls-us.com | 888.SHIP.GLS | sales@gls-us.com
THE NEW FRONTIER OF GLOBAL TRADE:
Insights on Geopolitical Shifts & Technological Innovations Impacting Supply Chains
By Marcus Reimann
Global trade is going through some big changes, thanks to shifting political dynamics and rapid advances in technology. These changes are having a major impact on how businesses manage their supply chains.
Recent trade disputes and political events have made things more complicated, leading to higher costs and delays in shipping. At the same time, new technologies are stepping in to offer better solutions, helping companies manage their supply chains more efficiently.
These developments are reshaping how products move around the world and what it takes to keep logistics running smoothly. For businesses, staying on top of these changes and adapting to new realities is crucial for success.
Geopolitical Shifts & Their Impact
The world of global trade is in flux, and geopolitical changes are a big part of why. Recent events have introduced new complexities into supply chains, influencing everything from shipping routes to the costs of goods.
US-China Trade Tensions: Take the ongoing trade tensions between the US and China, for instance. The tariffs and trade barriers imposed have made it more expensive and time-consuming for businesses that rely on Chinese products. Companies are responding by shifting their supply chains to
other countries like Vietnam and Mexico. This move helps them reduce their reliance on one single source and may even come with cost improvements.
Brexit’s Aftermath: Brexit has also shaken up trade dynamics. With the UK leaving the EU, businesses face new customs checks and regulatory hurdles. These changes have led to longer shipping times and increased costs for trading between the UK and EU. In response, companies are reevaluating their supply chain strategies — some are boosting their inventory levels or finding new suppliers to ease the impact of these barriers.
The Red Sea Disruption: Recent disruptions in the Red Sea have added another layer of difficulty. Conflicts in the region have reduced shipping capacity and caused imbalances in supply and demand. This situation has pushed up freight rates and added financial pressure on businesses. Moreover, delays in equipment returns and container repositioning have further complicated logistics, especially for those reliant on these routes.
Political Instability & Energy Prices: Political instability in other key areas also has ripple effects. For example, conflicts in the Middle East have led to fluctuations in oil prices, which affect global transportation costs. Companies operating in these regions must be especially nimble, managing risks and ensuring their supply chains stay intact despite these uncertainties.
Major Elections & Trade Policies: Looking ahead, major elections in key economic powerhouses like the US, India, Brazil,
Germany, Russia, and Japan are set to influence global trade policies and economic conditions. Each election outcome has the potential to affect trade agreements, tariffs, and market confidence, adding an extra layer of unpredictability. For instance:
India: Depending on the new government’s stance, there could be significant changes in trade partnerships and foreign investment flows.
Brazil: Political decisions here can impact commodity prices and trade agreements, causing ripples across various industries.
Germany: As the EU’s largest economy, Germany’s trade policies and regulatory decisions can shape regional and global supply chains.
Russia: Geopolitical tensions and changes in energy exports from Russia can disrupt global energy markets, affecting industries worldwide.
Japan: Japan’s technological innovations and trade policies will continue to influence global markets, from electronics to robotics.
Tech Innovations Shaping Supply Chains
Amid these geopolitical shifts, technology is stepping in to provide solutions and new opportunities. Here’s how recent advancements are helping businesses manage their supply chains more effectively:
Robotics and Automation: Robots and automation are transforming logistics operations. Companies such as Amazon are using robots to manage inventory and streamline order fulfillment, increasing efficiency and reducing the likelihood of human error.
Artificial Intelligence: AI is revolutionizing supply chain management. It helps businesses predict demand, optimize routes, and make data-driven decisions. For example, AI can analyze market trends to forecast demand, allowing companies to adjust their inventory and avoid disruptions.
IoT for Real-Time Tracking: The Internet of Things (IoT) is another game-changer. IoT devices provide real-time updates on the location and condition of shipments, helping businesses track their goods more accurately and manage their supply chains more efficiently.
Adapting to the New Reality
With these changes in mind, businesses must adapt their strategies to thrive. Here are some key approaches:
Diversify Supply Sources: Reducing dependence on a single source can help mitigate risks associated with geopolitical tensions and disruptions. Exploring alternative suppliers and locations can provide a buffer against unforeseen challenges.
Invest in Technology: Investing in technologies like automation and LLMs (large language models) can improve supply chain efficiency and resilience. These tools help businesses stay ahead of disruptions and optimize their operations.
Enhance Flexibility: Building flexible supply chains is crucial. Businesses should develop contingency plans and be ready to adjust their strategies as conditions change.
Monitor Global Trends: Keeping an eye on global trends and political developments can help businesses make informed decisions and prepare for potential impacts on their supply chains.
Final Thoughts
The landscape of global trade is evolving rapidly, influenced by geopolitical shifts and technological advancements. To stay competitive, businesses need to remain agile, embrace innovation, and adapt their strategies to the changing dynamics. By leveraging new technologies and maintaining flexibility, companies can navigate these challenges and emerge stronger in an increasingly complex global market.
Marcus Reimann is Senior Vice President, Kuehne + Nagel. He is a seasoned expert in the shipping and logistics industry with over 26 years of experience. Beginning his career at Panalpina in 1998, he held key managerial roles before joining Kuehne+Nagel in 2010. Currently overseeing sea logistics in the Americas, Asia Pacific, & Oceania, Reimann is renowned for his strategic vision and expertise in optimizing global supply chains.
The Kuehne+Nagel Group is one of the world’s leading logistics companies, offering comprehensive logistics services, including sea freight, airfreight, warehousing, road and rail logistics, 4PL, and customs brokerage across the United States and worldwide. For more information visit: https://home.kuehne-nagel.com/en.
BY ANDREW M. DANAS
THE UPCOMING LEGAL CHANGES FOR INTERNATIONAL DE MINIMIS SHIPMENTS
International parcel shippers need to pay close attention to upcoming changes to the US laws and regulations governing international de minimis shipments. Exact details on the how, what, and when these changes will occur depends on the adoption of final new regulations by Customs and Border Protection (CBP); other US government agencies; possible White House Executive Orders; and Congress. However, rule changes are coming that will modify and change the information and documentary requirements for such shipments and limit and otherwise affect the eligibility of de minimis treatment for certain types of products and products from certain countries, especially China.
As discussed in a prior PARCEL article explaining the Section 321 de minimis exemption, the exponential growth of de minimis imports commenced
after Congress authorized raising the maximum daily import duty exemption from $200 per consignee to $800 per consignee (see PARCELindustry.com/ Section321). Combined with shipped direct to consumer distribution models, e-commerce marketers have utilized this higher threshold to make large scale de minimis imports into the US. Since the threshold was changed, the number of de minimis shipments has risen from approximately 140 million to over one billion de minimis shipments per year.
Critics of the de minimis exemption often claim that the program is being abused and was never really intended for commercial business purposes. Some critics claim that it deprives the US of significant duty revenue and allows foreign companies to engage in unfair competition against US companies. By directly shipping to the ultimate consumer, these companies are allegedly able to use minimum customs
entry procedures and avoid the payment of US duties, while companies that continue to import by ocean container to traditional US distribution fulfillment centers remain subject to normal Customs entry procedures and the payment of applicable duties.
Other critics of the program state that the significant increase in the volume of de minimis shipments, which allow informal Customs entries with less information, has created difficulties for CBP in screening cargo to ensure the accuracy of the information that is being provided to it and to target and intercept illegal contraband, drugs, and goods not entitled to a de minimis treatment or imported in violation of other US laws.
Multiple bipartisan bills have been introduced in Congress seeking to address these issues, with multiple proposed alternative solutions. Agreeing on a common approach or compromise legislation has proven difficult. The White
House thus announced in September that it would take executive action to address issues with de minimis, once it became clear that Congress would not be quickly enacting any legislative reforms to the Section 321 laws.
Under the Biden Administration’s announced changes, new regulations will be adopted to limit the use of de minimis and allow the US Government to obtain more information and exercise greater control over the entry of shipments claiming a de minimis status.
As announced by the White House, under the proposed regulations:
Many goods will no longer be entitled to the de minimis exemption. Shipments containing products covered by tariffs imposed under Sections 201 or 301 of the Trade Act of 1974, or Section 232 of the Trade Expansion Act of 1962, would be excluded from de minimis treatment. The Biden Administration states that approximately 40% of US imports, including 70% of textile and apparel imports from China, are covered by Section 301 tariffs. These imports would no longer be entitled to de minimis treatment if the proposed regulations are adopted.
Stricter information and eligibility standards will be required for shipments claiming the de minimis exemption. If adopted, new regulations will clarify who is eligible for the administrative exemption and will require the filing of additional detailed information and data for de minimis shipments, including the identity of the person claiming the de minimis status and the 10-digit HTSUS tariff classification.
New product certification requirements. Importers of consumer products will have to file Certificates of Compliance (CoC) electronically with CBP and the Consumer Product Safety Commission (CPSC) at the time of entry for all goods. This proposed new rule will apply to all importers, not just de minimis shipments.
One of the clear goals of the White House’s proposals is to enhance the targeting of de minimis shipments that may violate applicable US laws. In announcing these proposed regulatory
changes, the Biden Administration stated that the proposed changes would assist CBP and other government agencies in ensuring compliance with US laws and regulations by allowing greater visibility into de minimis shipments.
Critics of the de minimis exemption often claim that the program is being abused and was never really intended for commercial business purposes.
Another goal of the announced proposals is to focus on protecting US manufacturers, especially American textile and apparel manufacturers, that may be facing unfair competition from China-founded e-commerce companies. In announcing the proposed de minimis rule changes, the Biden Administration also stated that it would intensify targeting of small package shipments, joint trade special operations, increased customs audits and foreign verifications, and the expansion of the Uyghur Forced Entry Labor Protection Act (UFLPA) Entity List, as part of its prioritization of enforcement efforts against illicit textile and apparel imports.
As with any governmental action, the details of the final regulations will dictate the future of the de minimis exemption. Most of the White House’s announced actions still need to go through the administrative rulemaking process. This process allows parcel shippers to closely examine — and comment upon — the exact legal changes that CBP and other government agencies are proposing. It is not until these rules are finalized and implemented that the Administration’s proposed changes to the de minimis process will take effect.
However, parcel shippers who heavily rely on a de minimis international
distribution process should not wait until final rules have been implemented before planning for possible changes to their business models. This is, in part, because in announcing its executive actions, the White House also called upon Congress to enact into law changes to the de minimis program, including an exclusion from de minimis eligibility of import-sensitive products, such as textile and apparel products; an exclusion for products covered by Sections 301, Section 201, or Section 232 trade remedy actions; and requiring more detailed regulatory information and data requirements for shippers on de minimis shipments. Whether Congress will take up the Biden Administration’s invitation remains to be seen, but any legislative changes to the de minimis rules could take effect quickly.
The policy debates surrounding the growth in the use of the de minimis exemption often focus on geopolitical and free trade competition issues. At its core, however, it is a debate about compliance with US laws, including US customs, trade, national security, and safety laws. The fact that a de minimis shipment is subject to an informal entry and exempt from duty does not mean that other applicable US laws do not apply. Parcel shippers monitoring and planning for future changes in the de minimis laws need to focus on their obligation to ensure that all of their US import shipments are in legal compliance with US laws — with verifiable information to support that compliance — even if the shipment remains eligible for de minimis treatment under any new rules that may be adopted.
Andrew M. Danas is Partner, Grove, Jaskiewicz and Cobert, LLP. For more information, visit www.gjcobert.com or email adanas@danaslaw. com. The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.
HOW AI CAN CHANGE THE GLOBAL PARCEL MARKET AND SUPPLY CHAINS
In an era of global manufacturing, where efficiency is everything and supply chains are more complex than ever before, strategic and thoughtful implementation of artificial intelligence software has the potential to revolutionize how we do business.
By Nykaj Nair
“Just get AI to do it.”
Supply chain professionals in 2024 have probably heard some variation of this phrase in recent months. It might be a general directive from the top of the organization. It might be because “AI” has been incorporated into countless consumer applications.
So, it only makes sense for us, right?
Indeed, “AI” — as it has been defined in both the business space and popular culture over the past several years — has come to mean both everything and, more troublingly, nothing. So, for supply chain professionals to leverage the potential of artificial intelligence in a way that is truly meaningful — a way that will have real and measurable business results — it is important to solidify our definition of AI in order to best apply it to our toughest challenges.
What are those challenges? Effective asset management and tracking. Friction throughout the supply chain. Your ability to obtain true knowledge of your asset base to drive real insight and positive change.
AI has the potential to truly revolutionize supply chain management by helping professionals overcome those challenges and more. Let’s explore:
Defining and Applying AI for Supply Chain Success
To date, “AI” has most commonly referred to generative AI, in which the AI software generates text, images, videos, or other data using generative models in response to prompts. These models learn the patterns and structure of input training data, and then generate new data with similar characteristics.
But AI applied to a business-to-business environment will often look much different. In the context of supply chains, it’s helpful to envision AI as more akin to a digital coworker — one that supplements a human process with significantly more powerful computational power and prowess. The digital coworker can process vast amounts of data that can be leveraged to support business decisions and optimizations.
Your digital coworkers might be assigned to specific applications throughout the supply chain. One digital coworker may be solely responsible for tracking the location of a returnable container. Another may be responsible for tracking a shipping truck while it’s on the road. Yet another may track the last known location of multiple assets throughout the supply chain.
By gathering and processing vast amounts of data from these individual applications — specific areas that supply chain professionals care about — AI can effectively deliver forecasted trends, proactive answers to common questions, and direct operations with the goal of simplifying decision-making in the supply chain. Such models can:
Take advantage of customer actions to present relevant data in an easy-to-understand fashion.
Address common warehouse logistics challenges with shipping lane assignments and stop-ships, making realtime adjustments based on customer-configurable rules and patterns.
Produce automatic notifications and alerts on any device so users know when to act and get ahead of everyday slowdowns and disruptions to manufacturing and shipping — further increasing end-to-end visibility.
Increase end-to-end visibility and speed of decision-making, allowing managers to make better, more informed decisions.
Deliver real-time heartbeat connectivity monitoring of installed hardware with proactive ticket creation to alert users of system downtime.
From here, the results can be powerful. Managers can forecast production needs based on how many assets they have within their facility or on the way to it. Easy-to-understand visual reports can provide users the ability to track operations and anticipate potential problems before they happen. AI tool sets can gather information from across users’ supply chains and provide one-click accessibility.
But remember, achieving such results does not happen by accident — in fact, it’s contingent on one very important parameter.
Data Drives Everything
You might be familiar with the phrase, “garbage in, garbage out.” And it’s an adage that absolutely applies to effective use of AI in supply chains.
For AI to help support optimal business decisions as described above, the process must fundamentally start with good, clean, reliable data. Accurate data forms the foundation
for AI applications’ ability to create and identify meaningful insights. Without it, AI models have the potential to deliver insights that are inaccurate.
Another comparison to generative AI models is useful in understanding how and why. You may remember earlier in 2024 when Google’s AI overviews for search queries came under fire for producing wrong answers. Those answers — often termed “hallucinations” — are the result of AI models making incorrect predictions based on faulty input data. Generative AI models are trained on large amounts of data combed from the broader internet, which can contain both accurate and inaccurate information. Further, when input data is vague or imprecise, generative AI may try to fill in the blanks, which can lead to false assumptions and answers.
Truly, AI has the potential to revolutionize supply chains everywhere, and it is evolving all the time.
The same is true for AI in supply chain applications.
Without good data, the insights produced may simply be inaccurate, leading to suboptimal human decisions and poor business outcomes. Again — implementing AI the right way is critical to its success in helping to eliminate friction throughout global supply chains. The bottom line is that AI modules must be paired with highly accurate data capture infrastructure to deliver on its potential.
Identifying Solutions for Your Business
For supply chain professionals, there are two key additional considerations to be made when evaluating potential solutions for your business.
The first is that AI solutions for your business, out of the box, can and should be trained on validated design best practices that can enable you to gather meaningful insight on day one. The second is that your business is unique; no two supply chains are identical to each other. Your AI model’s ability to continue to learn and adapt to your specific applications and get better as it works is just as critical as understanding broad commonalities across different supply chains.
Truly, AI has the potential to revolutionize supply chains everywhere, and it is evolving all the time. For supply chain professionals, it’s worth your continuous investigation and investment to seek out new tools that can help you transform your operations — or risk being left behind.
Nykaj Nair is Chief Revenue Officer for Surgere, an AI-powered SaaS company creating frictionless supply chains.
MASTERING CARRIER CONTRACTS FOR INTERNATIONAL SHIPPING
A practical
checklist for managing domestic and international shipping variations
BY CHRIS SHERIDAN
When shipping globally or cross-border, it’s important to carefully review your carrier contract to avoid costly mistakes. International shipping is significantly more complex than domestic shipping due to differences in regulations, taxes, and logistics. Below are some key considerations, common pitfalls, and potential concessions to ask for to save money when navigating international shipping contracts.
1. Understanding the Basics of Carrier Contracts
Carrier contracts outline the terms and conditions of your relationship with the shipping company. These contracts typically cover various aspects such as:
Rates and fees: The cost of shipping, including base rates, surcharges, and accessorial fees.
Liability and insurance: The carrier’s responsibility for lost or damaged goods and the insurance coverage offered.
Delivery times: The expected time frame for deliveries and any guarantees or penalties related to delays.
Service levels: The different types of services offered such as express, standard, economy, and associated costs.
Customs and duties: The handling of customs clearance and payment of duties and taxes for international shipments.
2. Key Differences Between Domestic and International Shipping Contracts
While many aspects of domestic and international shipping contracts overlap, several critical differences require attention: Customs and Duties
Domestic Contracts: Do not involve customs clearance or duties.
International Contracts: Must include clauses about who is responsible for customs clearance and payment of duties and taxes. In most cases, the importer (receiver) pays these
costs, but this can be negotiated.
Surcharges and Fees
Domestic Contracts: Will have standard surcharges like fuel, additional handling, and residential delivery fees.
International Contracts: Often have additional surcharges, such as customs handling fees, remote area surcharges, tax forwarding, disbursement, and currency adjustment factors.
Delivery Times
Domestic Contracts: Delivery times are usually more predictable and come with stronger guarantees.
International Contracts: Delivery times can be affected by customs delays, international holidays, and geopolitical issues. The contract should specify how such delays are handled and whether any penalties apply.
3. Pitfalls to Avoid When First Shipping Internationally
New shippers often overlook critical aspects of international shipping, leading to unexpected costs and delays. Here are some common pitfalls:
Ignoring Customs Regulations
Every country has its own customs regulations, and failing to comply can result in shipments being delayed, returned, confiscated, or penalties assessed. Ensure your carrier contract clearly outlines the process for customs clearance and specifies who is responsible for compliance.
Overlooking Incoterms
Incoterms (International Commercial Terms) define the responsibilities of buyers and sellers in international transactions, including who is responsible for shipping, insurance, and customs duties. Make sure your contract specifies the applicable Incoterms, as they significantly impact costs and responsibilities.
Not Understanding Currency Conversion
International shipping contracts often include fees that are subject to currency conversion. If the contract does not
specify how currency fluctuations will be handled, you may end up paying more than anticipated. Negotiate a clear agreement on how currency adjustments will be calculated.
Underestimating Packaging Requirements
International shipments often require more robust packaging to withstand longer transit times and rougher handling. Ensure your contract includes provisions for packaging standards, or you might face increased damage rates and insurance claims.
Failure to Account for Surcharges
International shipments are subject to a variety of surcharges that may not be present in domestic shipping. Review your contract for potential surcharges, such as fuel adjustments, remote area fees, and security surcharges, which can significantly increase your shipping costs.
Disregarding Value of Landed Cost Calculator
It is important to know the tax amounts that will be applied based on the value of the merchandise. The percentage charged varies drastically by country, and when not known upfront, it could lead to abandoned shipments. Partnering with companies that provide landed cost calculators for a manageable fee often tends to provide a favorable outcome.
4. Concessions to Ask for in International Shipping Contracts
When negotiating an international shipping contract, there are several concessions you can request to reduce costs and improve service levels:
Rate Discounts
Shipping rates are often negotiable, especially if you commit to a certain volume of shipments. Ask for discounts on base rates or bulk shipment discounts. A disbursement fee is an often-overlooked cost that should be negotiated.
Waiver of Certain Surcharges
Some surcharges, such as remote area, delivery fees, fuel, or tax forwarding, may be negotiable. Request a waiver or
reduction of these fees, particularly if you ship frequently to certain locations.
Improved Delivery Time Guarantees
For critical shipments, negotiate for improved delivery time guarantees with penalties for missed deadlines. This can be particularly important for perishable goods or time-sensitive materials.
Flexible Payment Terms
Negotiate for more favorable payment terms, such as extended payment periods or reduced fees for late payments. This can help with cash flow management, particularly for smaller businesses.
Customized Reporting
Ask for detailed, customized reports on your shipping activity. This can help you analyze your shipping patterns, identify cost-saving opportunities, and better manage your logistics.
Enhanced Insurance Coverage
If the standard insurance coverage offered by the carrier is insufficient, negotiate for enhanced coverage to protect against potential losses. This is especially important for high-value shipments.
5. Proposed US Import Changes
A new rule proposal from the Biden administration would prohibit products that are subject to US - China tariffs from being eligible for a special customs exemption.
The de minimis loophole allows packages with a value of less than $800 to enter the United States with relatively little scrutiny.
Officials say a recent explosion in the number of de minimis shipments is due largely to Chinese-linked online retail giants importing hundreds of thousands of packages to the United States daily.
6. Final Thoughts
Shipping internationally involves navigating a complex web of regulations, fees, and logistics. By thoroughly reviewing your carrier contract and understanding the key differences between domestic and international shipping, you can avoid common pitfalls and negotiate better terms. Always be proactive in asking for concessions that can save you money, such as rate discounts, waiver of surcharges, and enhanced insurance coverage.
It’s also essential to stay informed about the specific requirements of the countries you are shipping to, as regulations can change frequently. By being diligent and well-prepared, you can ensure that your international shipping operations run smoothly and cost-effectively.
Chris Sheridan is a Senior Supply Chain Analyst with LJM Group. He has more than 35 years of experience in the transportation and logistics industry, including more than three decades of multidisciplinary tenure with UPS. Since 1998, LJM Group has been helping shippers improve their visibility, efficiency, and profitability with comprehensive data analytics, expert parcel contract and rate optimization, and parcel auditing services.
UNLOCKING NEW E-COMMERCE OPPORTUNITIES: A GLOBAL PERSPECTIVE
BY DOUG LONGOBARDI
The digital revolution is transforming the retail landscape at an unprecedented pace, propelling businesses to expand beyond borders and tap into the lucrative world of global e-commerce. However, the challenge of identifying the most promising markets for global expansion is ever-present for businesses navigating the digital retail landscape. To help guide e-tailers through these opportunities, we have developed the “Markets to Watch” guide. This resource offers a deep dive into emerging trends and consumer behaviors, providing valuable insights that can shape the future of e-commerce strategies across the globe.
Our guide delves into key trends and consumer behaviors in regions such as Europe, North America, and Australia, providing e-tailers with the insights needed to thrive in a competitive global environment. With e-commerce expected to account for a substantial portion of retail growth worldwide, understanding these markets isn’t just advantageous — it’s essential for any business seeking long-term success.
France: Sustainability at the Forefront of E-Commerce Growth France, long recognized as a pioneer in e-commerce innovation, is experiencing a significant shift toward sustainability. In a country known for its discerning consumers, a remarkable 70% of French e-shoppers now express a preference for retailers that offer eco-friendly delivery options. This shift isn’t just a trend — it’s a powerful movement that is reshaping the market. By 2027, France’s e-commerce market is projected to reach a staggering €200 billion, driven in large part by this consumer demand for sustainable practices.
The sustainability trend in France isn’t confined to delivery options alone. The resale economy is poised to become a key player in the market’s future. With an estimated value of €14 billion by 2030, second-hand goods and circular economy models are gaining traction among French consumers who are increasingly prioritizing environmental responsibility. For retailers, aligning with these values isn’t just a way to attract
more customers — it’s a strategic move to stay ahead in a rapidly evolving market.
In essence, the French market offers a blueprint for how sustainability can drive growth in e-commerce. Retailers that embrace eco-friendly practices, from sustainable packaging to energy-efficient supply chains, stand to gain a competitive edge. The message is clear: in France, sustainability is no longer a nice-to-have — it’s a must-have.
United Kingdom: Resilience and Reliability in a Post-Brexit
World
The United Kingdom, despite the economic and logistical hurdles posed by Brexit, continues to be Europe’s largest e-commerce market. The numbers speak for themselves: 81.5% of consumers in the UK shop online, a testament to the resilience of the market. This resilience is underpinned by several factors, chief among them being the widespread adoption of hybrid work patterns, which have spurred increased online shopping.
The UK’s postal network, renowned for its reliability and efficiency, plays a crucial role in supporting this thriving e-commerce ecosystem. A striking 94% of orders are delivered successfully on the first attempt, showcasing the strength of the country’s delivery infrastructure. Moreover, 59% of shoppers prefer having their purchases delivered directly to their homes, underscoring the importance of convenience in the UK market.
However, the UK’s e-commerce landscape is not without its challenges. The complexities introduced by Brexit, including changes in customs regulations and cross-border trade, have necessitated that retailers adapt swiftly to the new reality. Yet, for those who can navigate these challenges, the rewards are substantial. The UK’s e-commerce market remains a powerhouse, driven by tech-savvy consumers and a robust delivery network. For international retailers, entering the UK market offers the potential for significant returns, provided they can meet the high expectations of British consumers.
North America: A Hub of High-Spending, Tech-Savvy Consumers
North America, with its tech-savvy and high-spending consumers, continues to be a beacon of opportunity for e-commerce businesses. The United States, in particular, has seen explosive growth in online sales, surpassing $1 trillion in 2022 — a remarkable 101% increase in e-commerce revenue since 2019. This growth is fueled by a combination of factors, including the rise of mobile commerce, the increasing trust in online delivery services, and the relentless innovation within sectors such as fashion, electronics, and health and beauty.
American consumers are among the most demanding in the world, with a keen eye for convenience and efficiency. Nextday delivery, once a luxury, is now an expectation for many shoppers, particularly in metropolitan areas. Retailers that can meet these high expectations are well positioned to succeed in this dynamic market.
Neighboring Canada also presents substantial opportunities for cross-border trade. With a strong e-commerce infrastructure and proximity to the US market, Canada offers a unique blend of growth potential and logistical ease. Interestingly, 25% of Canadians consider next-day delivery an essential service, reflecting the growing expectations of online shoppers in the country. For retailers, the North American market represents not just a vast consumer base, but a region where innovation and customer experience can truly set a brand apart.
Australia: A Thriving E-Commerce Destination with a Focus on Sustainability
Beyond the familiar landscapes of Europe and North America, Australia is emerging as a thriving e-commerce destination with its own unique characteristics. In 2022, Australia witnessed e-commerce sales reaching AU$55.1 billion, marking a 20% increase from the previous year. This growth is largely driven by the country’s tech-savvy population, with 59% of
online purchases made via smartphones. For retailers looking to expand into the Australian market, a seamless, mobile-optimized shopping experience is crucial.
But it’s not just convenience that drives Australian consumers. Like their French counterparts, Australians are increasingly prioritizing sustainability in their purchasing decisions. A striking 75% of Australian shoppers believe that retailers should be ecologically sustainable, and this consumer preference is shaping the future of the market. Brands that can align their operations with these values — through sustainable packaging, carbon-neutral delivery options, or ethical sourcing — are likely to find a receptive audience in Australia.
The Australian market is a testament to the fact that sustainability is becoming a global phenomenon, not just a regional trend. For international retailers, understanding and responding to these consumer expectations is key to unlocking growth in this promising market.
Navigating the Global E-Commerce Landscape: A Roadmap for Success
In a world where e-commerce is no longer confined by borders, understanding the nuances of each market is essential for success. Whether it’s the rising prominence of sustainability in France, the resilience of the UK’s e-commerce ecosystem, the high-spending and tech-savvy consumers of North America, or the thriving potential of the Australian market, Asendia’s “Markets to Watch” guide offers a roadmap for businesses seeking to expand their global footprint.
But it’s not just about market data and trends. The insights from the accomplished individuals profiled in the “Global Retail Voices” initiative provide a deeper understanding of the strategies that drive success in this fast-paced industry. By studying the remarkable accomplishments of these industry leaders and an in-depth analysis of the global e-commerce landscape, retailers can make informed decisions and position themselves for success in the rapidly changing world of online retail.
Whether it’s tapping into the sustainability-minded consumers of France or leveraging the high-spending and tech-savvy shoppers of North America, these insights serve as a guide for navigating the complexities of global expansion and unlocking new avenues for growth. In the end, success in global e-commerce comes down to understanding the market, embracing innovation, and staying agile in a world that never stops evolving.
Doug Longobardi is the Executive Vice President, Sales at Asendia USA, joining the company when it acquired Globegistics. Asendia is one of the world’s leaders in international e-commerce and mail, delivering packages, parcels, and documents to more than 200 destinations across the globe. Prior to devoting his expertise to Asendia USA, Doug was the Executive Vice President and Partner of Globegistics, a global e-commerce and mail solutions company he co-founded in 2011 and helped grow from nothing to $75 million in sales. Doug has over 25 years of postal, courier, and global distribution experience.
IMPORT DUTY:
A NECESSARY — BUT COMPLEX — COST OF DOING BUSINESS ACROSS BORDERS
By George Wicks-Farr
When goods cross international borders, they often come with a price tag beyond their purchase cost, known as import duty. Simply put, import duty is a tax levied by a country on goods from another country. For businesses involved in global trade, understanding import duty isn’t just helpful; it’s essential. It directly impacts your costs, profitability, and even the feasibility of importing certain goods. Failure to account for these duties can lead to unexpected expenses, delays in customs clearance, and potential disruptions to your supply chain.
Navigating the complexities of import duty can be daunting, especially for smaller businesses with limited resources that may not have the luxury of large teams or extensive experience in international trade. Here are some considerations to take into account as you manage this critical aspect.
What Is Import Duty?
Import duty is a tax imposed on goods
imported into a country. It’s essentially the price of admission for foreign goods entering a domestic market. Governments impose these duties for various reasons. Primarily, they serve as a source of revenue, contributing to the national treasury and funding public services.
Additionally, import duties can protect domestic industries from foreign competition by making imported goods relatively more expensive, encouraging consumers to buy locally produced goods.
Furthermore, they can be utilized to discourage the import of certain goods deemed harmful or undesirable, such as products with safety concerns or those that contribute to environmental damage.
It’s worth noting that almost all goods are subject to import duty. Still, the rates can vary significantly depending on the type of product, its country of origin, and any existing trade agreements. These duties are typically calculated based on the value of the imported goods (ad valorem duty) or the quantity or weight of the goods (specific duty). Sometimes, a combination of both methods is used.
Understanding the intricacies of import duty is crucial for businesses involved in international trade, as it directly affects their costs and profitability.
Factors Influencing Import Duty
Several factors come into play when determining the import duty applicable to a particular shipment. The type of imported goods is crucial, with each product classified under the Harmonized System, an international system that dictates specific duty rates.
The other two factors that influence import duty are the country of origin, as trade agreements and preferential arrangements can affect duty rates, and the value of the goods, as higher-value goods often attract higher duties.
How Is Import Duty Calculated?
Import duty calculation isn’t standardised internationally — each country has its own methods. The most common method is ad valorem duty, calculated as a percentage of the goods’ value. For example, a 10% ad valorem duty on goods worth $1,000 would result in a $100 duty. There are also specific duties, such as a fixed amount charged per unit of goods, regardless of their value.
In some cases, compound duties apply, combining ad valorem and specific components. Customs officials play a crucial role in assessing and classifying goods and ensuring the correct duty is used. If you are unsure about the import duties for the countries you operate in, using an import duty calculator to estimate costs may be beneficial.
Who Pays Import Duty
In most cases, the importer — the person or company receiving the goods — is responsible for paying import duty. Think of it as a toll for bringing goods into a country. However, navigating the complexities of customs and duty payments can be tricky and time-consuming. That’s where customs brokers come in; they act on your behalf, ensuring everything is handled correctly and efficiently.
Are There Ways to Lower Import Duty Costs?
Yes, there are legitimate ways to reduce
import duty. Trade agreements between countries can sometimes eliminate or lower duties on specific goods. Additionally, some countries offer unique programs or reduced rates for particular products or businesses. It’s worth exploring these options to see if you can save on import costs. Seeking professional expertise can help you understand these possibilities and identify potential savings.
The Importance of Compliance
Complying with import duty regulations is crucial. Non-compliance can result in severe consequences, including hefty fines, shipment delays, and even seizure of goods. Accurate and complete documentation is essential to avoid such issues. Customs brokers are vital in ensuring compliance, helping importers navigate complex regulations and prepare the necessary paperwork. Professional expertise can save businesses time, money, and potential headaches.
Quality and consistent compliance fosters a positive relationship with
customs authorities, streamlining future imports and opening doors to simplified procedures or priority clearance benefits.
Customs brokers are vital in ensuring compliance, helping importers navigate complex regulations and prepare the necessary paperwork.
Final Thoughts
In the world of international trade, understanding import duty is paramount. It directly impacts your bottom line and can be the difference between a successful import and a costly mistake. While the regulations can be complex, resources are available to
help. Don’t hesitate to seek professional advice when needed.
By staying informed and proactive, businesses can minimize the risks associated with import duty and ensure their goods reach their destination efficiently and cost-effectively. Remember, knowledge is power in international trade, and a solid understanding of import duty is a critical component of that knowledge.
So, take the time to learn the rules, explore available resources, and partner with experts who can guide you. With the right approach, import duty can become less of a hurdle and more of a manageable aspect of your global business operations.
George Wicks-Farr is Customer Service Supervisor, Pallet2Ship. Visit https://www. pallet2ship.co.uk/ for more information, or for an import duty calculator, visit https:// www.pallet2ship.co.uk/duty-calculator/.
By Christopher Tang
TARIFF TANGLE: UNRAVELING AMERICA’S TRADE POLICIES WITH CHINA
Despite President Biden dropping out of his re-election bid, Vice President Kamala Harris appears to toe the line of the Democratic Party to secure support for her presidential candidacy. So, her stance on China is likely to algin with Biden’s.
While Harris and former President Trump are engaged in a tight race by highlighting their differences, they share similar perspectives about China. They both hold the common belief that the imposition of higher tariffs will stimulate economic growth. However, the intricate network of tariffs implemented by both the Trump and Biden administrations is generating trade tensions, adversely affecting American consumers, and hindering innovation.
Throughout history, no country can sustain economic growth without embracing a more open and collaborative approach to trade. The US is no exception because free trade has been a cornerstone of American economic success.
In an effort to garner voter support, particularly during the presidential elections, both Trump and Biden (and now Harris) have strived to protect American jobs in manufacturing and other sectors vulnerable to Chinese competition.
In May 2024, Biden imposed a 100% tariff on electric vehicles (EV) and increased tariffs on other imports from China. Specifically, the tariffs for importing solar panels or cells were raised from 25% to 50%, steel and aluminum were increased from 7.5% to 25%, and lithium-ion EV batteries and other battery parts were increased from 7.5% to 25%.
Meanwhile, Trump also proposed several tariff increases for his second term, including a 10% universal baseline tariff on all imports, regardless of the country of origin. Also, if elected, he proposed a 60% tariff on all imports from China, revoking Permanent Normal Trade Relations (PNTR) with China established in 2000.
While boosting the domestic economy is often cited as the justification for the Trump-Biden tariffs against China, political calculations undoubtedly factored into the decision. For instance, bipartisan support is evident in the House Select Committee on the Chinese Communist Party report released in December 2023, which called for raising the Trump-Biden tariffs even further.
Protecting American jobs in manufacturing and other sectors is often used as justification for these increases. However, empirical evidence paints a different picture.
While some specific industries, like steel, saw moderate job growth, the overall impact on manufacturing employment has been negligible. Between 2018 and 2023, manufacturing employment in the US increased by a modest 3.4%. Moreover, a study indicated that the cost of creating each manufacturing job in the US amounted to several hundred thousand dollars. Additionally, the advent of automation and globalization has fundamentally reshaped the manufacturing landscape, rendering many labor-intensive jobs simply not viable in the US due to higher labor costs. Consequently, these tariffs turned out to be costly for American businesses and consumers.
These import tariffs increase production cost of US manufacturers because more than half of American imports are raw materials or intermediate goods used as inputs in production. Indeed, over 200 US companies ranging from Boeing to Caterpillar found these tariffs would affect their bottom lines negatively. For example, in 2019, Whirlpool reported that it experienced a $600 million material-cost increase. To recover this cost increase due to the tariffs, Whirlpool had to raise consumer prices, making it less competitive against foreign brands.
The net effect of the increased tariffs on Chinese imports has had a notable impact on inflation and the prices paid by American consumers. For instance, the tariffs implemented during the Trump administration led to increased costs for a variety of goods, including washing machines, steel, and cars. Also, various economic studies revealed that these tariffs have contributed to consumer price inflation, with estimates suggesting an increase of about 0.1 percentage points. By 2020, these tariffs contributed to the increased costs faced
by average American household annually, ranging from several hundred to over a thousand dollars.
Additionally, using import tariffs to protect domestic jobs can distort the labor market in the US. The reason for this disconnect lies in the nature of modern manufacturing. Automation and globalization have fundamentally changed the landscape. Many of the domestic-made products impacted by tariffs are simply not viable to produce in the US due to higher labor costs and limited domestic production capacity. Therefore, the increased tariffs provide incentives for firms to shift their production away from China, and it may lead to unintended consequences. For instance, India, Mexico, and Vietnam are eager to produce American products by performing assembly operations. However, these countries continue to rely on components imported from China. Diversifying suppliers across multiple countries can amplify operational complexity and lack of transparency, making it harder to maintain consistent quality and timely delivery.
Even when the Biden administration offered subsidies to encourage domestic manufacturing, high labor costs incentivize companies to automate further, replacing jobs with machines rather than creating new ones.
The immediate pain of tariffs is felt by businesses and consumers, but the long-term consequences can be even more insidious. Tariffs are a form of protectionism, aimed at shielding domestic industries from foreign competition.
By using import tariffs to create a protective environment, domestic companies face less pressure to drive innovation and efficiency. This stagnation can undermine their competitiveness in the global market, hindering future economic growth.
Instead of clinging to protectionist policies, the US needs to shift its focus towards strategies that truly enhance its competitiveness in the global marketplace. This requires a multi-pronged approach: investing in affordable education and training to create a skilled workforce equipped for the jobs of the future, boosting research and development in key areas like clean energy and advanced manufacturing, and promoting free trade through bilateral and multilateral trade agreements to open new markets and encourage foreign investment.
The Trump-Biden tariffs have proven to be a costly and misguided experiment in protectionism. The path forward lies in embracing a more open and collaborative approach to trade, one that fosters innovation and strengthens supply chains. Doing so would ultimately benefit American businesses and consumers.
The 2024 presidential election presents a crucial opportunity to chart a new course, one that prioritizes competitiveness and prosperity in the face of a complex and evolving global economic landscape.
The choice is clear: protectionism breeds stagnation, while innovation thrives on collaboration. It’s time for the US to choose the path that leads to a brighter future for its businesses and its people.
Christopher Tang is a distinguished professor at the UCLA Anderson School of Management.
THE LEGAL ASPECTS OF INTERNATIONAL SHIPPING BETWEEN THE UNITED STATES, CANADA, AND MEXICO
By Brent Wm. Primus, J.D
International shipping involves a level of complexity much greater than domestic shipping within the United States, which can cause a great deal of confusion for shippers. Let’s break down some of these aspects and what they mean for your parcel operation.
North American International Ground Providers
The legal entities providing transportation service from the United States to Mexico or Canada are the same as those providing transportation services within the United States. They include motor carriers, surface freight forwarders, transportation brokers, railroads, and companies arranging for transportation services by railroad often called “intermodal marketing companies (IMCs).”
The statutory definition of a “motor carrier” is pretty straightforward: A person providing commercial motor vehicle transportation for compensation.
A “surface freight forwarder” is a person holding itself out to the general public to provide transportation of property for compensation and consolidates shipments or distributes the shipments AND assumes the responsibility for the transportation from the place of receipt
to the place of destination AND uses for any part of the transportation, either a motor carrier or a rail carrier. They are considered to be a shipper with respect to the linehaul carrier and a carrier with respect to its shipper customers. It has the same liability for loss and damage to cargo as does a rail or a motor carrier.
A “transportation broker” is a person that arranges for transportation by motor carrier for compensation. Generally speaking, a broker does not have liability for cargo loss and damage.
Canadian motor carriers will transport shipments between Canada and the United States and Canadian brokers will arrange for such shipments. With respect to shipments from Mexico to the United States, Mexican carriers typically do not cross into the United States.
International Air Providers
An air carrier is defined by federal statute as a “citizen of the United States undertaking by any means, directly or indirectly, to provide air transportation.” While many shippers deal with airlines (direct air carriers), most shippers deal with air freight forwarders.
These often function as an “indirect air carrier” defined by federal statute as a US citizen who uses in whole or in part the
services of an air carrier for all or part of the indirect air transportation of property.
Basics of Motor Carrier Liability
For domestic ground shipments within the United States, the governing statute is called the Carmack Amendment. This statute imposes monetary liability for the actual loss. However, carriers are allowed to limit this liability in exchange for a lower rate, and most do. Carmack also sets a minimum time period of nine months from the date of delivery for filing a claim and a minimum time period of two years from the date the claim is denied for initiating lawsuits.
Liability for Shipments Between the United States and Canada
An underlying principle relating to cargo liability for ground shipments moving between the United States and Canada is that the law of the country of origin applies. Thus, for northbound shipments from the United States, Carmack liability will apply; for southbound shipments, Canadian law will apply.
In Canada, there is no federal law governing loss and damage. Rather, there is the Uniform Bill of Lading Act (UBLA), which has been adopted by some, but not all, of the provinces.
Pursuant to the UBLA, carriers are liale for any loss of or damage to the goods while they are in the custody of the carrier, subject to certain exceptions. Although the basic principles of liability are very similar to those of the United States, a crucial distinction relates to the amount of the liability. As stated above, under Carmack, the starting point is “actual loss or injury.” In Canada, the UBLA provides that the liability:
“Shall be the lesser of (i) the value of the goods at the place and time of shipment, including the freight and other charges if paid, and (ii) $4.41 per kilogram computed on the total weight of the shipment.”
However, the consignor can declare a value on the bill of lading higher than the UBLA minimum.
Another critical distinction relates to shorter time limits. Notices of claims are to be given “within 60 days after delivery of the goods or, in the case of failure to make delivery, within nine months after the date of shipment.” The “final statement of the claim must be filed within nine months after the date of shipment, together with a copy of the paid freight bill.”
Liability for Shipments Between the United States and Mexico
The principle that the law of the country of origin will govern a transborder shipment also applies to shipments between the United States and Mexico. The Mexican federal law governing carrier liability provides that when the shipper does not declare the value of the goods, liability will be limited to an amount equivalent to 15 days of the minimum daily wage then current in the Federal District per ton.
At the current exchange rate, this is approximately six cents per pound. Because of this, the best practice is for shippers to obtain their own shipper’s interest cargo insurance to protect their interests.
International Air Cargo Liability
For domestic air shipments, the air carrier’s tariff sets the time limits and limits of liability. For international air shipments, the Montreal Convention, an
international treaty, sets the time limits and limits of liability. A claim must be filed within 14 days of delivery for damage and within 21 days for delay.
The statute of limitations for filing a lawsuit is two years. Under the Convention, the limit of liability is 22 Standard Drawing Rights (SDRs) per kilo, which currently translates to approximately $12.90 per pound.
Additional Laws and Regulations
As with domestic shipments, any shipper shipping goods internationally must know the rules and regulations governing their shipments. For these shipments, both United States and foreign laws will apply.
Customs and Trade Laws. Another area of concern relates to customs and laws regulating trade between countries. All international shipments entering into the commerce of another country will be subject to laws governing their importation, including their classification and valuation; any duties (taxes) imposed upon them; and any restrictions on their importation. This includes, but is not limited to, restrictions required by regulatory, health and safety, trade quotas, and intellectual property rights laws.
Under US law, a US importer of record is responsible for using “reasonable care” in importing goods into the United States (19 U.S.C. § 1484). Under the concept of “informed compliance,”
US Customs and Border Protection (CBP) has published guidelines as to the responsibilities of the trade community in importing goods. It is the responsibility of the importer of record to ensure that reasonable care has been used in providing accurate information to CBP.
U.S. export licenses; export control laws; and sanctions. Many countries have export licensing and control laws. These are generally aimed at either limiting or prohibiting from export goods that are controlled due to technology or other sensitive characteristics. In the United States, there are three main government agencies involved in export regulation:
The Bureau of Industry and Security (BIS) of the U.S. Department of Commerce
The Directorate of Defense Trade Controls (DDTC) of the U.S. Department of State
The Office of Foreign Assets Control (OFAC) of the U.S. Department of Treasury
While a description of these various rules, or even a summary of them, is far beyond the scope of this article, the compliance with them is extremely important, since a violation of these laws can result in significant monetary and criminal penalties.
Terms of Sale between Buyers and Sellers: UCC or Incoterms?
The U.C.C. F.O.B. terms cover passage of title, payment of freight charges, and risk of loss and damage. Incoterms 2020 covers freight charges, risk of loss, responsibility for cargo insurance, payment of import duties, and a few related obligations, but not passage of title. Because they are different, it is very important to specify whether you are using the UCC terms or Incoterms. Before the reader begins incorporating one or more Incoterms into their purchase or sales contracts, it is recommended that they thoroughly educate themselves regarding the exact meanings of these terms and the pros and cons in selecting a particular term for a particular transaction. A good starting point is the International Chamber of Commerce website at https://iccwbo.org.
For Further Research
My colleague, Andrew Danas, and I have written several articles about the topics discussed in this article in previous PARCEL Counsel columns. Readers with an interest in knowing more about these topics are encouraged to read them. They may be found at PARCELindustry.com/PARCELCounsel.
Brent Wm. Primus, J.D., is the CEO of Primus Law Office, P.A., the Senior Editor of transportlawtexts, inc., and Director of Virtual Education for the Transportation and Logistics Council, Inc. Your questions are welcome at brent@primuslawoffice.com.
BY AUSTIN MADDOX
THE GROWING GLOBAL FOOTPRINT OF OPEN LOCKER NETWORKS
Package deliveries are booming, with e-commerce sales estimated to exceed $6.3 trillion globally this year. With exponential growth comes last-mile logistical challenges for delivering packages efficiently and securely to consumers — the vast majority of whom have come to expect exceptional service every time they place an order.
For carriers and shippers, even more challenges abound for containing costs, ensuring security, and addressing concerns about pollution. One techdriven trend, open locker networks, is emerging to alleviate the increasing pressure on legacy systems. Open locker networks provide a system
of shared, secure parcel lockers in public or semi-public locations that are accessible to multiple carriers, retailers, and other businesses. Featuring advanced digital interfaces, consumers use their unique code to conveniently retrieve a package or process a return at the locker.
Open Locker Networks Drive Customer Satisfaction in Europe
The open locker shared usage model has already gained a strong foothold in Japan and Europe, with thousands of lockers dispersed at easily accessed, common touchpoints for consumers. Strong partnerships with major carriers and national retail networks have formed, especially along daily
commuting routes, which has sped up adoption and usage. By their very nature, open locker networks allow any carrier to participate, instead of incurring the cost to operate a privately owned distribution network.
This trip-chaining approach of dropping multiple packages at a single location optimizes the logistics process and drives customer satisfaction by offering greater flexibility and convenience. The cultural shift with consumers is real, as locker hubs become increasingly accessible in new ways. One European pub operator, for example, offers secure parcel lockers on site. You can grab a beer and pick up or return your package — all in just a few steps.
European shippers and carriers have learned you can optimize efficiency without sacrificing customer experience. Carrier customer studies indicate that lockers are the preferred pickup method, winning out over less efficient, more traditional options like curbside pick-up or waiting at a retail customer service desk. Within the smart locker system, customers retain the ultimate control of how and when to retrieve a package with a simple scan of a QR code. Moreover, they feel confident doing so in a secure environment knowing their belongings won’t get stolen sitting out in the open. In multi-unit residential housing, package lockers rank as a top amenity, second only to parking.
Congestion and Sustainability Factors
Increase US Demand for Open Lockers Despite the inherent challenges of a sprawling urban terrain, open locker networks are beginning to emerge in the United States, and the energy is moving toward this model. In denser areas, alleviating congestion and complying with environmental targets is a major motivator for carriers and municipalities to transform delivery operations.
The trend and dollars are shifting toward solutions that solve the last-mile challenge. New York City launched an initiative to reduce package theft, traffic congestion, and pollution. The city’s program includes public locker hubs featuring security cameras, LED lighting, and anti-theft mechanisms. The city was motivated by the surge in at-home deliveries, noting that 80% of households received at least one delivery weekly and 20% received four or more deliveries weekly. By centralizing drop-off points, the city can address the rise in truck traffic and related vehicle emissions.
In Seattle, a similar program has yielded positive outcomes. The effort reduced delivery times overall by as much as 78% and the average delivery time inside the building was cut by half. The amount of time trucks dwell at the curb was reduced by a third. Customer service didn’t suffer as a result, with a 96% satisfaction rating with the new
locker system due to ease of use and fewer missing or stolen deliveries. Forward-thinking carriers are quick to participate in such programs, recognizing that cities are making sizable investments and will increasingly place expectations around solving last-mile problems. In California, the Los Angeles Cleantech Incubator is implementing a number of initiatives to tackle pollution through zero-emission delivery zones. Another recent example: Miami received a $2 million federal grant from the U.S. Department of Transportation’s Strengthening Mobility and Revolutionizing Transportation (SMART) program. The funds will be used to improve transportation efficiency and safety to proactively achieve low-carbon last-mile deliveries for freight and goods.
For carriers delivering consumer goods, 1.5% of the 23 billion packages delivered annually in the United States are lost or stolen in the last-mile phase.
How Open Locker Networks Benefit Carriers and Consumers
From shipping to delivery, the post-purchase experience is undergoing an evolution to meet the sheer volume and customer demands for speedy, hassle-free experiences. For carriers, open locker networks optimize delivery routes by consolidating deliveries to a single locker location, saving time and reducing fuel costs. The system offers a scalable solution for managing upticks in delivery volume without expanding infrastructure.
For carriers delivering consumer goods, 1.5% of the 23 billion packages delivered annually in the United States are lost or stolen in the last-mile phase. Open locker networks reduce the
number of failed delivery attempts and provide a secure drop off for parcels. On the flip side, online purchases have a high return rate: 17.5% or $247 billion of merchandise is returned annually. Smart locker hubs are a convenient alternative for returning packages that don’t require additional staffing, particularly as the latest locker models feature built-in label printers for consumer convenience. Additionally, agile carriers see the benefits of utilizing oversized lockers to cost-effectively create micro hubs in lieu of typical distribution centers — especially valuable in urban areas with more expensive real estate.
Consumers show a strong preference for delivery or returning parcels via smart lockers. They can pick up their packages at a time that suits them, rather than be tied to home delivery schedules. Whether located in apartment buildings, stores, or other public spaces, locker hubs serve as convenient pickup locations that are close to home, work, grocery shopping, or other frequented areas. The keyless, secure nature of locker systems means consumers don’t have to worry if their package will get stolen, lost, mistakenly picked up, or left out in the elements. They also appreciate that locker hubs are easily opened with a QR code and located in public spaces that are monitored.
The journey to redefine the last mile — and now the first mile of returned packages as well — for more efficient, sustainable delivery solutions continues. On a global scale, carriers and municipalities are embracing open locker networks as a viable way to consolidate deliveries while also exceeding customer expectations. Trends show they are coming soon to an American city near you.
Austin Maddox is Executive Vice President of North American Parcel Locker Solutions for Quadient and is passionately committed to helping businesses address their unique challenges as they relate to increasing volumes of inbound and outbound packages. Visit Quadient at https://www.parcelpending.com.
MANAGING CROSS-BORDER RETURNS
By Tony Sciarrotta
In today’s globalized economy, businesses are increasingly serving international customers through e-commerce. According to Maximize Market Research, the cross-border e-commerce market size is estimated to reach over $652 billion by 2030.
While this brings opportunities, it also presents challenges, particularly when it comes to managing cross-border returns. The logistics and costs of handling returns from different countries, coupled with the varying regulations and customer expectations, make this aspect of international trade particularly complex.
The Challenges of Cross-Border Returns
One of the primary obstacles of cross-border returns is the cost associated with shipping products back to the original country. International returns often involve higher shipping fees, customs duties, taxes, and currency exchange differences. Additionally, reverse logistics are complex, requiring coordination with multiple carriers, warehouses, and customs authorities. This often leads to delays and increases the likelihood of items being lost or damaged during transit. Another challenge is regulatory compliance. Different countries have varying regulations when it comes to the return and exchange of goods, particularly in terms of labeling, customs documentation, and tax obligations. In some cases, products returned from international markets may not be allowed back into the country of origin due to import/export restrictions or health and safety standards, making the process even more complicated.
Language and cultural differences can also create barriers in cross-border returns. Customers from different regions may have varying expectations regarding the return process, refund timelines, or customer service support. Miscommunication due to language differences can result in misunderstandings about return policies. In addition, cultural norms surrounding returns may differ, with some regions being more lenient or strict about returns, impacting customer experience and brand loyalty.
Lastly, the environmental impact of cross-border returns is a growing concern. Companies are increasingly pressured to find sustainable solutions for handling returns, such as localizing returns through regional warehouses or offering alternative options like store credits. Balancing these environmental concerns with customer satisfaction adds another layer of complexity to the issue of cross-border returns.
Despite these challenges, businesses can implement several strategies to optimize cross-border returns, improving both efficiency and customer satisfaction.
Best Practices for Managing Cross-Border Returns
The importance of managing cross-border returns effectively extends beyond logistics; it also influences the overall customer experience and brand perception. International customers often have heightened concerns regarding return policies due to higher shipping costs, longer delivery times, and unfamiliar regulations. Offering a seamless return experience not only alleviates these concerns but also demonstrates a company’s commitment to service and transparency. In a competitive global marketplace, businesses that prioritize efficient and transparent cross-border return processes are more likely to stand out and thrive.
1. Clear Return Policies
Transparency is important to managing customer expectations. Develop a clear, comprehensive return policy that outlines the process for international customers. This policy should include details such as:
Return eligibility criteria
Who bears the shipping costs
How customs duties, taxes, or other fees are handled
Estimated timelines for return processing and refunds
Ensuring this information is readily available and easy to understand on a business’s website will help prevent confusion and dissatisfaction among customers.
2. Localized Return Solutions
Where possible, establish local return solutions in key markets. Partnering with third-party logistics providers or local fulfillment centers in countries where you have a significant customer base can help reduce return shipping costs and processing times. Local solutions also eliminate the complexities of dealing with customs for both the customer and the business.
3. Prepaid Return Labels
Prepaid return labels are a convenient solution that benefits both businesses and customers. By negotiating competitive shipping rates with carriers, businesses can control costs while
simplifying the return process for customers. Prepaid return labels also help ensure that returns are sent via the correct method and to the right location, reducing errors and delays.
4. Customs Management
Managing customs efficiently is crucial for smooth cross-border returns. For high-value items, providing customers with clear instructions on how to handle customs paperwork can minimize delays. Businesses should also work with logistics partners who specialize in international shipping and returns to streamline customs procedures.
Some countries allow for “returned goods relief,” where businesses can reclaim customs duties or VAT on returned goods. Investigating these options and ensuring compliance with local regulations can reduce the financial burden associated with international returns.
5. Efficient Customer Service
Customer service is a key component of the return experience, especially for cross-border transactions. Offering multi-language support and providing customers with clear instructions on how to return products can go a long way in reducing frustration. Additionally, offering real-time tracking for returns gives customers peace of mind and helps them stay informed throughout the process.
6. Returnless Refunds
For low-cost or difficult-to-ship items, consider offering returnless
refunds and encourage customers to donate unwanted items to local charities. This approach can save shipping costs and time while still maintaining customer satisfaction. By allowing the customer to keep the product and offering a refund, businesses can reduce logistics expenses associated with cross-border returns while enhancing the customer experience.
7. Data-Driven Decisions
Leverage data to optimize your cross-border return policies. Monitor key metrics such as return rates by country, the cost of returns, and customer feedback to identify patterns and areas for improvement. This information can help you adjust your return policies and procedures to better suit the needs of international customers and reduce the financial impact of returns on your business.
Managing cross-border returns efficiently is essential for businesses that operate in the global marketplace. By implementing clear return policies, leveraging localized solutions, optimizing customs management, and providing exceptional customer service, businesses can create a returns process that not only minimizes costs but also enhances customer loyalty. With the right strategies, cross-border returns can be a seamless part of your e-commerce operation, leading to stronger customer relationships and continued growth in international markets.
Sciarrotta is the Executive Director of the Reverse Logistics Association.
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NAVIGATING WAVES: EXPLORING TODAY’S CHALLENGES AND WINS IN OCEAN TRANSPORTATION
By Agustin Lopez
Responsible for carrying approximately 80% of international trade, ocean transport is the backbone of how we move goods around the world. So far this year, we have seen a 10.6% increase in global ocean demand compared to 2023. As we near the end of 2024, the ocean freight market faces a complex blend of challenges and successes. On the one hand, we have seen extraordinary resilience in adapting to major disruptions. However, heightened geopolitical tensions, unpredictable demand and labor uncertainties continue to create a storm of volatility. For shippers, understanding and adapting to this ever-changing landscape is critical.
2024’s Ocean Transport Successes
One of the most remarkable 2024 ocean market wins is how much more resilient we are as an industry to navigate unprecedented conditions, thanks to the experience gathered during the COVID-19 pandemic. In the wake of pandemic-induced lockdowns, labor shortages and port closures, the ocean transportation industry not only survived, but
quickly and efficiently evolved. By learning to navigate once unimaginable challenges, this refined agility has enabled the ocean freight ecosystem to persist through the difficulties of this year. For instance, shipping lines almost immediately reshuffled their various services to adjust to extended voyage forced upon them by the Suez Canal closure. Though this has come at the cost of longer transit times and elevated rates, the ability of the market to maintain reliable delivery schedules even when traditional routes have been compromised is a notable achievement.
Another 2024 success has been the wide-reaching commitment to sustainability, which continues to be a priority even amid the chaotic state of the market. Shipping companies and their partners are increasingly focusing on the reduction of carbon emissions, low-carbon fuel alternatives and energy-efficient operations. This is particularly important as international shipping is responsible for nearly three percent of global greenhouse gas emissions. Interest by most large ocean carriers in alternative fuels as well as significant investments in more efficient transloading signal a clear push toward greener solutions. Additionally, companies
involved in ocean transportation are becoming more transparent about their intended environmental impact, with many setting ambitious carbon neutrality goals. Progress toward a more sustainable maritime supply chain is not just a trend, but a necessity, and we are seeing impressive industry-wide commitments to reduce greenhouse gas emissions.
Today’s Ocean Transport Challenges
While the ocean sector has shown significant resilience and adaptability in 2024, considerable challenges remain. The implications of the ongoing Israel-Hamas war are widely regarded as the most pressing issue, which continues to hinder transportation through the Suez Canal. The rerouting around the Cape of Good Hope has continued to drastically increase transit times and cost and absorb a great part of the capacity surplus generated by new deliveries. Demand has surged far beyond predictions, with trans-Pacific demand hitting record highs this past summer, leaving idle fleet percentage at a mere one percent compared to the pre-pandemic levels of five to eight percent. This combination of high demand and low capacity has driven up rates and created capacity shortages in terms of vessel slots and equipment.
A prime example of the adverse impacts of these conditions can be seen at Latin American ports, particularly in Mexico and Brazil, that are not designed for such high volumes and as a result are experiencing major delays. Much of the high demand in Latin America is due to a surge in electric vehicles imported from China across the region along with solar panels in markets like Brazil. Labor unrest adds another layer of complexity. Strikes, like the conversations we have seen in 2024, create severe congestion not only in isolated regions, but across the entire supply chain through a domino effect.
What’s Ahead and How to Adapt to Predicted Ocean Obstacles
Looking ahead, several factors will shape the future of the ocean freight industry. One of the most impactful will be the trajectory of the conflict in the Middle East. If tensions ease and threats in the Suez Canal lessen, capacity will be released, and shipping rates will quickly decline. Should the conflict persist, the use of longer alternative routes will continue, keeping rates elevated. The Gemini Cooperation, a new long-term collaboration between Maersk and Hapag-Lloyd, is planned to have a major impact on the market, particularly in terms of schedule reliability. The partnership aims to improve service reliability on major trade routes (with ambitious plans to reach 90% schedule reliability) through the implementation of a hub and spoke system limiting the number of direct calls and increasing the usage of short sea feeders.
In navigating these layered obstacles, shippers must implement strategies to maintain consistency and flexibility in their operations. Accurate and proactive forecasting is paramount in a rapidly shifting landscape. Companies that can effectively predict their shipping needs based on historical and market data are better positioned to secure necessary capacity and avoid last-minute delays and surcharges. Honoring MQC agreements will ensure consistency in shipment volumes and is key to building and maintaining strong relationships with carriers and non-vessel operating common carriers. Inconsistent volumes lead to strain in relationships and make it harder for shippers to secure capacity when it’s most needed. March and April are the critical months to renegotiate annual ocean freight contracts with carriers to lock in rates and terms to protect your business. Another important strategy is diversifying ports. Companies that diversify port choices, routing, and supplier pools will have better opportunities to manage the risks in their supply chains amidst a level of uncertainty that has become certain.
Finally, weigh the value of the long-term impact when making decisions in the current moment. Given the volatility of today’s market, it can be tempting to make sudden changes with every swing. Prioritizing relationships with your partners is critical, remembering who has been there for you when times have been tough versus solely focusing on the bottom line.
No matter how the market unfolds heading into the new year, remaining adaptable and focusing on forecasting, contract negotiations, and vendor relationships is key to staying ahead of the curve in the constantly changing world of ocean transportation.
Agustin Lopez currently serves as the Senior Vice President of Ocean for the Americas region at GEODIS. With nearly 30 years of industry experience, Agustin leads comprehensive and customized logistics solutions in ocean freight for its clients in the region. GEODIS is a global third-party logistics company with expertise across the entire supply chain, including freight solutions, transport services, and warehousing. For more information, visit geodis.com.
CLOSING THOUGHTS INFORMATION RESOURCES FOR INTERNATIONAL MAILERS
By Merry Law
After a recent presentation on trends for international mail and delivery, I was asked how someone who needs to follow what’s happening internationally can do so with a reasonable time investment. It was a great question — and nobody had asked it before. I had a couple of suggestions, and the audience contributed, too.
There are two different types of sources: those that push the news to you in an email and those that require you to go to them for updates. Not all these links will be of interest to all readers of this publication; pick the ones most relevant to you. Here are my favorites with consideration to getting the most information with the least expenditure of time.
The USPS has multiple resources that are invaluable to mailers. Most of these require the mailer to access them to check for changes. The International Mail Manual (IMM) has all the all requirements for preparing and entering international mail for the USPS. The IMM’s country index has some specifics on requirements and limitations in particular countries. Changes occur between updates to the IMM. Those changes are covered in the bi-weekly Postal Bulletin along with other updates to domestic and international requirements. It is free on the website but is the only one of these resources that can be sent to you by paid subscription. International Mail Service Suspensions occur for many reasons. The list of current suspensions should be checked before mailing, as they change. International service suspensions and reinstatements are announced in an Industry Alert from the USPS, available by free subscription.
The USPS’s publications add information and detail to the sources above. Search “USPS pub number xx” to find the publications online. These titles are most useful to international mailers:
Pub 52 - Hazardous, Restricted, and Perishable Mail
Pub 199 - Intelligent Mail Package Barcode (IMpb) Implementation Guide for: Confirmation Services and Electronic Verification System (eVS) Mailers
Pub 699 - Special Requirements for Shipping Internationally
Pub 713 - How to Ship Internationally Online
The Postal Hub Podcast is a series of interviews on what’s happening in the postal sector worldwide. Ian Kerr, the Australian host, has added blogs, webinars, and a daily email digest. You can subscribe to the Daily Delivery Digest on their website. It’s a daily email with the highlights of postal and delivery news from around the world with links to longer articles.
The Universal Postal Union (UPU), the UN-specialized agency overseeing the international postal sector, has some useful resources online, although their focus is their member countries and the designated postal operators of those countries. Exploring the links on the UPU home page provides an overview of the information available. In particular, the UPU offers information on international addressing and on prohibitions in international mail. The Consultative Committee offers the private sector a way to be more involved with the UPU.
All US mailers and shippers are required to comply with US export controls and
restrictions. Some of these can literally change overnight, as new individuals, organizations, or countries can be added to or removed from these restrictions. Automatic notifications are possible in some cases with details available on the websites. General export control information is available from Trade.gov. US sanctions are detailed online.
The Consolidated Screening List provides “a list of parties for which the United States Government maintains restrictions on certain exports, reexports, or transfers of items.” The Sanctions List Service provides links to the Specially Designated Nationals and other sanction lists. The Specially Designated Nationals are those individuals banned from doing business with the US. It is available in different formats, including “a human-readable version of the SDN List”.
Most mailers won’t need to check all of these sources regularly. Staying up-to-date on the USPS and other US government information is important for all US international mailers and shippers, particularly for fulfillment of orders. The other sites may require occasional checking.
Merry Law is President of WorldVu LLC and the editor of Guide to Worldwide Postal-Code and Address Formats. She is a member of the UPU’s Addressing Work Group and of the US International Postal and Delivery Services Federal Advisory Committee.
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FOR YOUR SMALL-PACKAGE SUPPLY CHAIN? MAKE SURE YOUR TEAM IS INFORMED
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