Practical Ecommerce

Beware parcel forwarding services?

There is an industry growing up within ecommerce that offers parcel-forwarding services. It is mainly in the U.S., but there are similar services in the U.K., where I live. The services offer a U.S. or U.K. address, which receives items from stores that will not ship internationally. Then these services will forward items internationally to a customer’s actual, local address.

Many parcel-forwarding companies offer additional services like repacking, inspecting, and photographing the contents, and consolidating multiple parcels into one shipment. This can save shipping costs, especially using couriers that charge more on size than weight.

The parcel-forwarding industry is growing because so many ecommerce retailers do not ship internationally. The gap in the market being filled by these middlemen — for a fee.

The questions I have are, “Why have we merchants let this happen? Why are we letting others offer a service that we could do as well, if not better?”

As technology advances and more of the world shops online, the demand for international shipping will only increase. There is a huge market internationally and it is crazy for merchants to ignore it.

As is, some savvy customers are getting around these artificial territorial restrictions by using these forwarding services. These services are making a huge profit.

I have used one such service to import some items that are not easily available in the U.K. In essence, the service is just a box forwarder — not really paying much attention to what it is shipping, or to whom. The service has generic addresses in nameless industrial estates. Individual post office box numbers are described with terms like “suite no.” or “dept. no.” or “room no.” to give the impression that its a hotel or large residential address, not a post office box.

Having used their services and seen the type of address format, I now recall shipping parcels from my ecommerce sites to such places.

I can also see the problems that can occur.

If a parcel goes missing or if an item is damaged, then whose fault is it? Whilst we may have carefully packed an item with due care, knowing what we sell and how best to protect it, can we be certain that these middlemen will do likewise? Also, the couriers they choose for onward shipment: Are they as good as the ones we choose for initial dispatch? You can be certain that when something goes wrong, it is the retailer that will be blamed and carry the burden of any refund or chargeback.

I have no idea why customers use these services when buying from me, as I ship internationally. I do not understand why U.S. customers get me to ship to one of these U.S. forwarders when I can ship directly to them. I’m especially confused as I offer free shipping to the U.S. (For some reason it is cheaper for me to post a one pound item to the U.S. than one mile up the road from me.) I can only assume that these customers are in the bad habit of always using these services and have not bothered to change the delivery address when retailers ship worldwide.

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Comments ( 25 )

  1. Sean BP October 16, 2014 Reply

    Hi Richard – a thoroughly useful article !

    I think the issue is that international shipping prices for smaller e-commerce businesses have rocketed over the last few years. Royal mail international prices have tripled in the last 2 years. Meanwhile customers have been educated by Amazon to expect “free” shipping worldwide and look for a solution with free UK shipping and a cheaper international rate than the actual retailers can get.

    Another issue that affects our business is that a significant number of our products are illegal to ship internationally – for example because they contain solvents. Customers use these parcel-forwarding services to buy from us so that they can use a UK delivery address, and then hope that the forwarder doesn’t adhere to (or know) the rules as well as we do.

    The main concern, of course, is ensuring that the retailer isn’t held liable for things he no longer has control over.

  2. Richard Stubbings October 16, 2014 Reply

    I know what you mean about solvents, and the same applies to aerosols. The thing is these days most of the banned substances for airmail are likewise banned for local mail.

    It is interesting you find Royal Mail more expensive. I have moved on to their Max sort and am getting huge savings. Indeed if you do not have the volumes you can find a parcel shipper who will be able to offer you prices near to the Royal Mail Max sort. This shipping rate is likely to be in line or cheaper than any forwarder, so you can compete if you look into it.
    The shipping market in the UK is full of competition and you can find some very good deals for international shipping. Royal Mail however remains the best for UK shipping below 2 Kg.

  3. Elizabeth Ball October 16, 2014 Reply

    Richard, I see 4 possible reasons they use US forwarders:
    1. Your home page says in red, Free UK Postage (but not Free UK and USA Shipping) – however I am in the UK currently so am not sure if you use geolocation to change your home page automatically changes when a US-based customer visits your page
    2. Your Delivery page does not say “free US shipping” at all but a “fixed price shipping rate per order”
    3. Many retailers use subheadings for Delivery pages to clarify prices etc for USA, Canada, UK, Other International areas and since most people skim-read, perhaps you don’t spell it out enough.
    4. Delivery can sound “local” while “shipping” definitely sounds international in scope.
    Hope this helps!

  4. Hilton October 20, 2014 Reply

    I use such a service to buy from the USA – I’m in Australia.

    I also use it for purchases from US vendors who ship overseas, for two reasons.

    1. The forwarder gets better international shipping rates from Fedex/DHL/TNT/UPS than individual retailers are able to, due to the volume they ship, especially for heavy/bulky items.

    2. They consolidate packages – so I can ship to them for cheap (or free), and then for a nominal fee of $1 per package, can combine all my different shipments into a single box, saving me a lot of money through aggregation.

    The exceptions where I don’t bother with the service is:

    1. When I need the item in a hurry
    2. Um.. see 1.

    Yes, there’s a risk inherent in the services, but based on a cost-calculated risk assessment, if 1 in 10 packages gets lost, I’m still well ahead financially. After >30 packages, none have been lost yet.

    Perhaps advertising you are happy to ship to them would gain you more customers? (note there are US retailers who refuse to ship to known forwarders – it costs them business)

    • Richard Stubbings October 24, 2014 Reply

      I am happy to ship to forwarders. Although I prefer to know when I am doing this. It’s less of a problem for me as I am in the UK and the vast majority of forwarders are in the US. It would be foolish of a customer in Australia to get me to forward a parcel to the US and then get it shipped to Australia.

      I take your point regarding shipping costs. But this is just the retailers being lazy. I have negotiated significant discounts from shippers and can beat the advertised prices of these forwarders (no doubt they are paying less than me, but they have to make a profit somewhere). At the end of the day these forwarders exist because retailers are lazy.

  5. Jugnu January 29, 2015 Reply

    Hi there ,

    I have a question ,

    Is package forwarding service suitable , if u want to buy bulk goods from U.S and ship them to asia ?

    If not , then , What are the solutions ?

    Is it also cost effective way of importing ?

    ( Actually i want to buy items from U.S for my online store regular on basis & want to find a cost effective way . Thanks for reading .

  6. Vincent March 7, 2015 Reply

    I have been using freight forwarders for many years without problems. I got cheap shipping rate and its a great solution. But all have change since this year. Now amazon is no more liable to any item ship to a freight forwarder. Which mean if an item is lost, damage or not as described, amazon will do nothing( No replacement and no refund) And as you know most online shopping website refuse to ship to freight forwarders like best buy, Wal-Mart, apple, HP etc..

    So in the end we need to find an alternative solution. As i buy a lot online but now it is no more worth it to use a freight forwarding company.

  7. FrankyBoy June 16, 2015 Reply

    Interesting article.

    I would like to add that parcel forwarding services are not just interesting for consumers, but also for retailers and their supply chain.

    In the Benelux for example, we are supposed to source everything through those countries. A service like bpm-lux.com though has made it possible for us to source directly from the UK, Germany or elsewhere, at better prices, lower VAT etc. Or getting products that are not (yet) initially available to the local market (as of wrting this the Apple Watch for example).
    So yes, there are risks involved, but it has made many things more flexible and available.

  8. Eric Blaise July 24, 2015 Reply

    I think one issue is that, a lot of people do not read the fine print. Who could blame them, your are used to seeing free shipping and do not notice the huge price tag until it is too late. This is nothing new but definitely needs to be dealt with in a way clients will be notified before reaching checkout.

    Eric | http://www.shipville.com/

  9. Paul July 28, 2015 Reply

    Hi Richard, i’ve read with big interest your article as i’m using UK forwarding service and want to know what others think on this.
    Totally agree with big savings on international shipping and much carefully packaged items when using a forwarding company. But aside of this, i use personal shopper service in cases my non-UK credit card is denied. Indeed, a very useful service. However, hope that soon all UK retailers will accept PayPal payments to avoid extra fees when purchasing from them. Yeah, and if someone is interested to know which forwarding services i use now then here is the link to their rates page: https://www.myukmailbox.com/rates because this is the first thing everybody want to know before anything else.

  10. Peter Parker August 16, 2015 Reply

    Hi Richard,

    Interesting blog. I think your US customers are using parcel forwarding companies to make the most of package consolidation. If you read up on how couriers, DHL, FedEx calculate shipping costs on a volumetric basis you can see how the price can mount up.

    Finding the right parcel forwarding company is a bit of a minefield. I’ve create a league table of the best parcel forwarding companies based on cost and service. It might of interest. http://usaparcel-forwarding.com/index.php/parcel-forwarding-services-comparison/

  11. Farid October 26, 2015 Reply

    Hi Richard,
    Thanks for the useful article.
    As an Iranian inhabitant, since the sanctions inhibited many online stores from shipping to Iran, employing such forwarding services would be advantageous. Although finding such reliable services isn’t easy, yet it’s better than nothing.
    I hope the sanctions will be relieved quickly and Iranians be able to purchase from the brands shop.
    Anyway, I would be very happy if someone inform me the availability of forwarding services in the UK for Iranian locals.

    • Quratulain November 23, 2015 Reply

      Hi Farid,

      The parcel forwarding industry is pretty huge. We started collecting and reviewing such services when we ourselves ran into this problem (i returned from UK and wanted items delivered from overseas to Pakistan) back in 2013.

      Take a look at the article here: http://tech-vise.com/10-parcel-forwarding-services-for-international-shoppers/ There are a couple that will deliver to Iran. this list is updated twice a year and is very carefully curated and its probably the only one out there that is current.

  12. Irina February 2, 2016 Reply

    Hello Richard,

    I’m representing Parcl.com (https://www.parcl.com), a relatively new peer-to-peer service, that was designed to help people with overseas shopping. I’m researching online retail market in various countries, and can say that the number of online shops with limited shipping is huge! If there are quite a lot of stores in the US that do ship internationally, the situation is much worse in Europe, where sometimes they don’t even offer shipping within the EU.

    Another issue you mentioned were the risks related to forwarding. I found a good formulation to protect sellers: ‘Please note: Because [forwarding_service_name] is a third-party vendor, sales under this method are final’. It may vary, but the main idea is clear.

    Even though I’m on the opposite side, I share you ideas. Thanks for the article!

  13. reddis March 13, 2016 Reply

    Hi there. There is indeed a widening demand for theses services as the customer becomes increasingly global. I don’t think the majority of retailees use forwarders because of laziness, many confess it’s because the retailer does not ship globally.

    Some researching has revealed a lot of these forwarders are scams, or legitimate but charge outrageous fees that ensure the customer does not return. Why? They don’t make any profit this way because there is no repeat business. People are not stupid, they know they are being ripped off.

    As a global shopper, I would gladly additional charges for retailers to send to me direct. This is a real opportunity here for saavy retailers. People have lost faith in forwarders, especially those that have had items break in transit (borderlinx) and are then told they should have got insurance. They are totally unprofessional and the costs make the purchase cost unaffordable after they’ve have to shell $100-200 for a small item that would have cost about $20 sending through the post or working direct with a courier.

  14. Tamar August 12, 2016 Reply

    I’m currently using MyVipBox ( http://bit.ly/MyVipBox_USA ) for redirection boxes and has worked very well.

  15. LouAnn August 26, 2016 Reply

    I’m coming from a different perspective. I was solicited by several “Forwarding” services to work for them. I accepted one and when that didn’t work out, went with another. I was with each one a month. Boxes would be sent to my address. I would get a shipping label to put on the packages and then take them to the post office. The one company’s website is now nonexistent. The other site has phones that have been disconnected. I’m left with no pay and packages that neither one finished getting me labels. I’m thinking they are a rip off. Anyone with such experience?

  16. Juliet September 30, 2016 Reply

    I am using potail.com and its great. You people should try this once.

  17. waj November 13, 2016 Reply

    I live in Iraq, where the post service is mostly poor.
    However, getting big box, parcel, with few KGs can more likely be delivered to my address and I will pay less for its shipping as a whole unit.
    This such service is very useful for me….
    Best regards,

  18. Dinar November 22, 2016 Reply

    I can see Richard`s point clearly.

    He can allow himself to ship internationally, but there are some countries where offered kinds of delivery are restricted. So, the buyer needs to find a way to receive his parcel or smt. In some cases, package forwarding is useless (like free US shipping listed here), but there are always can be some point when package forwarding becomes the only way to help the customer.

  19. Katia Marchon December 16, 2016 Reply

    There are quite a few online stores that don’t ship internationally still.
    Other than that there are also tons of little shops and private individuals who won’t do that, for instance I buy a lot of stuff from Italy and I can see that even on eBay some sellers don’t post outside their own country. I use a package forwarding service (http://www.sourcingitaly.com) and I find it quite convenient. But I wish more shops would post internationally (hopefully keeping their shipping prices reasonable).

  20. Daniele Ganzetti February 3, 2017 Reply

    This sector really has a great potential. I am using these services for 3 years and I generally use borderlinx for USA forwarding but recently discovered a new company Shippn.com and purchased an item from Australia. However, they are not a forwarder company they are a community like airbnb. People registered in the website negotiate with each other and this provides shopping from not only from USA, from all across the world.

  21. Anna Constantinou February 4, 2017 Reply

    What do you sell and do you ship to the US Virgin Islands? We use US Postal Service, and I am always looking for companies that ship here.

  22. Frank February 11, 2017 Reply

    I use http://www.yollando.com from Turkey to shop in turkish shopping sites and I never had problems with them. Great service and good prices.

  23. Shawn April 29, 2017 Reply

    My wife and I are US citizens and are residents of Dubai, UAE. We use these services to consolidate items in one delivery.

    While US domestic shipping is very reliable – international shipping, especially to areas in Asia can be less reliable and items do go missing when shipped one by one.

    By tracking multiple items to one location in the U.S. first – Suzie and I know they were sent and received from the merchant. That part is done.

    We then have a professional shipping service pick up from there. They store several items for a period of time and then consolidate many items into one box to send overseas. This increases the chance that everything arrives on time and in one box. This is more convenient and way easier to track. This also ensures Suzie and I only have one point of contact for international shipping services.