Solving Global Shipping Challenges for E-commerce Success

Posted on November 22nd, 2020

Global shipping is full of challenges. Being aware of these obstacles will help you charter your way through international shipping for a profitable e-commerce business.

Challenge #1: Varied rules and regulations between countries

One of the challenges faced by the shipping industry is the differences in laws and regulations between different countries. The taxes and legal considerations vary, and this can create confusion and complications. Laws vary based on which country the goods are coming from, and certain categories like weapons and alcohol have additional import/export requirements as well.

How does this affect my eCommerce business?

When you decide where you will manufacture your product, make sure you are aware of the exporting laws in that country, as well as the importing laws, on bringing those goods into your country. You don’t want to be stuck with an illegal shipment, or one that could’ve given you a tax break had you produced it in a different country.
See the basic documents necessary for the international shipment of your goods. Though it is challenging to stay on top of the relevant laws, it will save you a lot of hassle in the long run. Logistic services provided by W Group can guide you with the relevant information.

Challenge #2: Carbon emissions, costly expenses

Another one of the major shipping challenges present today is the new regulations imposed by the International Maritime Organization (IMO).To effectively reduce harmful gas emissions from sailing ships, an expensive fine is taxed to the shipper if there are harmful emissions. 

Over 90% of international trade is transported by sea. The harmful emissions of those ships contribute to pressing global concerns, like climate change, acid rain, and concerns on human health. 

Shipping companies can choose to comply with the regulations for safer gas emissions. Either they can switch fuel types, from high sulfur fuel to low sulfur fuel, or they can install  ‘scrubbers’ on their ships, which will filter sulfur oxides from the exhaust gases emitted from the vessels. 

How do these regulations affect my online business?

The consequences are steep. 

The courier companies will need to purchase low sulfur fuel, scrubbers, or new vessels to accommodate liquified natural gas (LNG). 

Or, the carriers may resort to ‘slow steaming’, in order to decrease the amount of expensive fuel being consumed. 

These options will significantly increase shipping rates or extend the shipping time frame. 

The effects of those changes will trickle down to eCommerce businesses and consumers.

Some increased shipping costs are inevitable, yet others are unnecessary and avoidable. An experienced freight forwarder like W Group can help you eliminate unnecessary fees, thereby positively influencing your business revenue and market consumption.

Challenge #3: The Coronavirus Pandemic

Although this has not completely paralyzed the global logistics industry, couriers are definitely experiencing negative effects and changes. One effect, among many, is a large number of goods getting damaged en route. 

How has Covid-19 led to more damaged shipments?

  1. Due to the increased lockdowns and decreased activity in the ports, security and protection in the ports have become more lax. Goods stored in containers that sit in the ports are more likely to get damaged. This is true especially for temperature-sensitive or perishable products.
  2. Another reason for the increase in damages is the change in work shifts. Due to coronavirus, crew members aboard vessels are working overtime. The changing of workers is limited in an effort to protect people’s safety. But, the fatigue of the workers contributes to more human error in taking care of the cargo.

How does this affect my business?

The effects of damaged goods are obvious. Either, your inventory will not be up to date as you wait for more items to come in, or you’ll sell goods at a lower quality standard and leave many customers unsatisfied. Either way, you have the headache of returned items, insurance claims, and attempting to get compensation.

Challenge #4: The Trade War with China

The ongoing trade war primarily between the United States and China is a huge drain on the economies of both countries, and a major challenge facing shipping companies, and the businesses importing/exporting their goods. 

China is one of the leading exporting countries in the world, amounting to roughly  237.2 billion U.S. dollars in October 2020. Their products flood the U.S. markets. 

The heightening of tariffs on Chinese exports creates higher prices and less availability of desired products. Many businesses imported Chinese goods ahead of schedule, in anticipation of a higher tax. This hurried demand for Chinese goods creates chaos in the ports, including too many containers sitting in storage. 

Get more trade war tariff information.

How does this have an impact on my business?

Higher tariffs may force businesses to hike up their prices. This has many repercussions, which will directly influence the bottom line. 

If you are struggling with tough decision making regarding the prices of your products and the importing costs, turn to W Group. We will dedicate our time and knowledge to assist you in finding the best carrier options for the lowest rates, thereby helping your business survive and thrive, even in challenging situations.

Challenge #5: Cyber-attacks and data theft

As the maritime industry moves to digital tech, there is an increased risk of cyber-attacks and data theft. Four mighty shipping empires have suffered cyber-attacks in recent years. In the 12 months prior to February 2020, cyber-attacks were perpetrated on 31% of sea organizations. Attacks can be extremely costly. Sea pirates may seek ship manifests, container ID numbers, and ship sea routes, in order to organize an attack on ships containing valuable merchandise.

How do cyber-attacks on the shipping industry affect my business?

Simply, the goods they are looking to seize may be yours. And, if it’s not your goods they’re after, your personal data may suddenly be on the dark web. Make sure you are transporting your goods via a reliable network, and that you are covered in case of any incident.  

Challenge #6: Visibility, knowing the minute-to-minute location of goods

. This is a challenge for international logistics companies because multiple carriers and modes of transportation are being used to deliver the goods. And, not all carriers have the infrastructure for accurate shipment tracking. Forwarders need to coordinate tracking details from all their carriers for complete point-to-point tracking availability.

How does this affect my business?

  • Freight visibility helps prevent issues and resolve small issues before they cause damage or losses.
  • Freight visibility helps companies accurately plan for the arrival of the goods.  
  • Freight visibility keeps you calm and focused on growing your business because you know where your goods are. 

Use a freight forwarder like W Group that offers tracking visibility, so you gain on all these benefits. 

Challenge #7: Globalization

As businesses all over the world go global, they demand upgraded perks and services to make the shipping process easier and better. Logistics companies need to be a step ahead, and steadily upgrade their services according to the rising demand, in order to offer competitive services. 

How does globalization affect my online business?

57% of online shoppers are buying goods from regions beyond their home country. In order to please the buyers and expand your market, you will need to cater to the customers’ preferences from all over the world. 

  • Language: 75% of buyers prefer shopping in their native language, and 59% of buyers rarely buy on English-only websites.
  • Currency: Online businesses need to accept foreign monies if they desire a global market. 92% of buyers prefer to use their local currency. 33% of buyers may abandon their carts if they only accept US dollars.
  • Cultural dynamics: eCommerce businesses need to be aware of the various cultural dynamics that define their consumer base. A failure to appeal to their specific cultural preferences may limit your income. 

A well-connected Global Freight Forwarding provider like W Group can steer you toward the right carriers for your business’s specific visions of expansion and global services. 

Understanding the Middle East Trade Route: Essential Insights

Posted on November 11th, 2020

The “Abraham Accords” and the normalized relations between Israel and the United Arab Emirates has opened a new world of opportunity for trade in the region. 

WHY is this an important economic breakthrough?

Following the recent normalization deal between Israel and the United Arab Emirates, a direct trade route was established for the first time ever. The new Middle East trade route means closer trading ties between the two countries, which is greatly beneficial for business in the region. As a result of the budding relationship, the importing and exporting of shipments is now easier, faster, and cheaper. 

Dubai’s port is at a strategic location for shipping and trading goods globally. Dubai Ports World (DP World) is a multinational logistics company in Dubai, UAE. They trade goods with countries as far east as Australia and as far West as Canada, and handle roughly 10% of all container traffic around the globe.

This opens a whole new world of opportunity for businesses. Israeli goods can now be shipped easily and quickly to the wider Arab population. Israeli businesses can also utilize this new Middle East trade route to ship their goods to many other countries, passing through the strategic Jebel Ali Dubai Port. 

Companies are already taking advantage of this trade route. A Mediterranean Shipping Company vessel, the MSC Paris, was the first ship to dock in the Israeli Haifa port with Emerati cargo. Other carriers are quick to follow.

If you do any trade in the Middle East, or if you’re looking to jump on the opportunity, now is the time to take action. There’s a great, profitable opportunity here for easier, faster and cheaper shipping to a wider consumer base. A freight provider like W Group can help you out with the logistics of this new and quickly evolving world of trade opportunity.

WHAT can be transported via this route? 

The United Arab Emirates is a great source of oil that Israel can now access easier than their other oil suppliers. Israel, on the other hand, has a highly developed high-tech industry, among other products, which can benefit the UAE greatly. 

The first container shipment from UAE that was unloaded onto Israeli shores contained iron, firefighting equipment, electronics, and cleaning supplies. The first air freight delivery following the peace accord transported perfume from the United Arab Emirates to Israel.

Though these goods may be the most popular, it is not the only goods that can be shipped. This new trade route has great potential for many other goods to reach a wider and more vast range of consumers. 

WHICH documents are required? 

The following is a list of basic documents required for clearing your goods through UAE customs, usually in addition to the standard internationally required paperwork:

Documentation:

  • Appropriate and necessary ID documentation
  • Detailed inventory (original and two copies) – this is important, as the officials may inspect the contents
  • Insurance certificate

Get more UAE customs information.

If this is an option you want to explore, an experienced freight forwarder, like W Group, can guide you with concrete and up to date information and assistance regarding this shipping process. 

WHEN do shipments leave and how long does it take to arrive?

Prior to the peace agreement between Israel and the United Arab Emirates, shipping a parcel between the two countries could easily have taken 10 days. Now, with a direct trade route, delivery time is cut in half.

Currently, the MSC line is scheduled to make the trip between these countries once a week. 

A weekly air freight shipment was also arranged between Israel and the UAE.

Other shipping companies are taking advantage of the opportunity to gain on the deal.  

  • Zim has offered their services in transporting goods from the Jebel Ali port in Dubai to the Israel Haifa port, and also bring products from Israel and from the Eastern Meditteranean to Dubai.
  • Maersk has also declared that they will ship ocean cargo between the 2 said countries.
  • DHL Express is another company that already delivered their first shipments from Israel to the UAE.

WHO will benefit from the peace treaty?

This new Middle Eastern trade route opens up a world of opportunity for both countries and can help boost their economies significantly. Both countries’ products can now reach a greater market with cheaper shipping rates and faster delivery service. It only depends on who takes advantage of the opportunities.

We were all hit economically from the Corona pandemic.

Israeli GDP is set to drop by 6.2 percent this year, and unemployment has risen from 3.4 percent to 23.5 percent in recent months. 

But, this can help. The estimated profits that Israel can receive from conducting trade with the United Arab Emirates can eventually amount to $4 billion a year, and this can also create roughly 15,000 new jobs.

Which categories of trade are we looking at? Israel can benefit greatly from Emerati oil, and the UAE will enjoy Israeli  technology and cyber know-how. Tourism is also an obvious benefit resulting from this agreement. 

Additionally, before the agreement, goods exported to the UAE from Israel needed to be manufactured in other countries. Now, following the Peace treaty, Israelis can proudly boast their products as ‘made in Israel’. This removes a big headache for the Israeli exporting businesses.

WHERE can I get more info on utilizing this trade route?

Researching and finding the best option with the best conditions for the most affordable rates can be a complicated and time-consuming process. W Group is ready to assist you with all the necessary global freight services, guiding you with your specific business considerations. Find out how you can benefit from this new trade route.

What people can do to cut courier rates and actually get better service

Posted on November 4th, 2020

 

Your business has many expenses, and shipping is high on the list. When shipping cargo it’s usually best to work with an experienced logistics company. However, when you just need to send a simple or single package you can find the cheapest way to ship a package internationally on your own. All you need is industry knowledge and guidance, on what to look for and where to look.

This is an informative guide providing the details you need to find the cheapest and most suitable options for your courier packages. Because cutting your shipping expenses is doable.

Cutting transportation costs is important to your bottom line.

The cheaper your costs are, the cheaper you can sell the goods for, which can lead to more sales. Or, if you don’t transfer the lower costs to your customer, you benefit from a better profit margin for each sale.

Transportation costs don’t remain static. It’s important to constantly explore and evaluate the opportunities so you can keep shipping prices low and increase your profits. 

Below we will outline the main options and what you need to evaluate every time you select an international service. 

What are the general prices for shipping international packages?

When sending packages (as opposed to cargo), there are 3 dominant international carriers. These main carriers are USPS, UPS, and FedEx. Let’s explore the rates and services offered by these companies, so you can choose the best option at any given time. 

USPS

ProsCons
Usually the cheapest international rates for small packages under 10 lbs. They don’t schedule a specific delivery time. Real-time scanning is faulty, so the recipient may not be able to track the package correctly.

UPS

ProsCons
Widest array of services for overseas deliveries. Reliable point to point tracking. More expensive than USPS for small packages.

FedEx

ProsCons
Arguably the best quality service.Precise parcel tracking at any given time.Usually the most expensive option.

Fet more in-depth analysis of USPS, UPS, and FedEx and clear factors on when to choose.

Price and service though are not the only determining factor. You’ll also want to consider how long it will take for the package to arrive. 

Here we compare the general pricing and delivery times for a 5 lb package shipping from the US to Israel. This is an estimate, excluding additional discounts, that can further lower your price.

 

CompanyPrice RangeDelivery time
USPS$65.37-$79.846-10 days / 3-5 days
UPS$184.44-$204.157 days / 4 days
FedEx$174.70-$216.197 days / 4 days

We see that although USPS is the cheapest, their delivery times lag behind UPS and FedEx, which may cause UPS to be the better option here depending on your needs.

How can I determine my specific costs?

The USPS pricing manual is a comprehensive compilation of graphs stating all the relevant costs. 

UPS and FedEx have a pricing calculator on their portal. Just fill in the necessary information and they will give you a decent estimate. 

You can also use a calculator to determine the prices, services, and options that best suit your needs.

How to cut corners on shipping costs without compromising on quality service?

Discounts: Carriers offer discount options for businesses using their services for large shipment volumes. If you are not shipping many packages you can access these discounts by shipping with a group company. Large companies get bulk discounts from the main carriers and some of these service companies will pass on the discount to you. 

UPS discount rates are summarized in a chart for clarity.

The ‘FedEx Save More Program’ offers discounts based on your average annual shipping revenue. You can save up to 32% on eligible FedEx Express services, and up to 11% on eligible FedEx Ground and FedEx Home Delivery services when you use FedEx electronic solutions.

There is shipping software, like Shippo, that gives you  access to various discount options for cheap international shipping.

What factors affect shipping costs?

The size and weight of the parcel: The size and weight of the parcel: Most carriers compare the actual weight and the volumetric weight, commonly referred to as the dimensional weight (DIM), to calculate the shipping rate for a given package. The customer is charged the greater fee.

How to calculate the DIM of your parcel: 

To calculate dimensional (DIM) weight, multiply the length, width, and height of the package, using the longest point on each side. Then, divide the cubic size of the package in inches by the DIM divisor to calculate the dimensional weight in pounds. Important! Each carrier uses a different DIM divisor to calculate the DIM weight. View Dimensional Weight information from the basic companies to ensure that your parcel is being measured properly.

  • Distance: The greater the package needs to travel, the higher the costs will be. 
  • Surcharges: There are many different surcharges depending on what is in the package and where it is going. Some fees apply to fuel surcharge, dangerous goods, remote territories, odd-sized packages, and address corrections. 
  • Taxes and duties: This is determined by the importing country as well as the value of the goods and its classification.

How can I limit these expenses?

The size and weight of the parcel:

By better matching your package size to your product — or by switching to lightweight mailers — this process can be significantly cheaper. You can also use packaging provided by your carrier, as they do not have dimensional fees. If you use your own packaging, you can be charged the dimensional weight which can be significantly more expensive.

Distance and time:

Planning your route with an experienced company like W Group can help you meet your timeline, product requirements, and pricing needs, while factoring in current transit times.

Surcharges, taxes, and duties:

Most of these are unavoidable, but with careful planning you will be well prepared for any of these fees. 

We all want the cheapest international freight shipping. When you need guidance for a large container shipment check freight services to see how WGroup can handle your international shipment smoothly, efficiently, and with a clear price breakdown.