7 global shipping challenges for a more competitive store
November 22, 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?
- 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.
- 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.
For more trade war tariff information, click here.
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.
Get shipping visibility in your palm with data you can trust.
Choose W Group for your international freight services