Management & Finance

How To Rate-Shop International Shipping

U.S. export sales are increasing, which makes international rate shopping more important than ever. For example, here are published rates for a typical 10-pound parcel sent from my fulfillment company located in Traverse City, Mich. to a client’s customer located in London, England.

  • UPS Worldwide Express (1-3 days): $166.98
  • UPS Worldwide Saver (1-3 days): $160.91
  • UPS Worldwide Expedited (2-5 days): $148.54
  • USPS Global Express Guaranteed (1-3 days): $132.53
  • USPS Express Mail International (3-5 days): $68.08
  • USPS Priority Mail International (6-10 days): $52.68

As you see, the potential cost spread for this typical package is over $100. And if you ship in volume, picking the wrong shipping method could cost hundreds of thousands of dollars a year.

Calculation of International Delivery Rates Is Complicated

Most international parcel shipping services are provided by FedEx, UPS and the U.S. Postal Service. The cost factors are so complicated, it is best to use the online price calculators provided by each carrier to do your rate shopping, as follows.

Package size relative to shipping weight is an important cost consideration as international rates are subject to dimensional weight minimums plus there are intricate rules that involve product limitations, valid addresses, insurance coverage and so forth. To read more on dimensional weight issues, see “Shipping: Dimensional Weight Errors Can Cost Big Bucks,” which I wrote earlier for this publication.

USPS Priority Mail International Is the Most Popular Ship Method

My company ships about 120,000 international packages a year and the vast majority of these are shipped via USPS Priority Mail International, although packages under four pounds are sometimes sent via First Class Mail International (which does not provide tracking) because of the lower rates.

You can use the USPS online rate calculator to process your own international packages right from your desktop. You will need to know the destination country, package weight and dimensions, plus the product description and customs value for each package. You can print your shipping labels and customs declaration forms from the online system or you can order a supply of free customs forms online from the USPS store.

Priority Mail International Flat Rate Boxes Could Save Even More Money

The USPS offers international flat rate delivery just as it does domestic delivery, and if your products have sufficient shipping weight per cubic inch to make the numbers work; this feature could save you considerable expense.

International Shipping in Volume Requires Some Added Technology

The online postal calculator is good for low volume international shipping, but larger processing volume will require an automated system. There are many choices available, such as Stamps.com and Pitney Bowes, but we use Endicia.

You can hand enter individual package information or preload batches of addresses as files. The system calculates your postage and prints a USPS label plus the needed customs declaration forms automatically.

If you ship a large number of packages that all have the same contents, you can print your labels and customs forms as a batch to speed your pick, pack and ship processing. This is what my company does whenever we can.

Priority Mail International includes delivery confirmation tracking and limited insurance, but it is a good idea to add extra insurance for valuable packages when needed.

International Mail Consolidators Can Save Even More Time and Money

As your shipping volume grows, you may wish to consider use of an international mail consolidator service. This is a company that gathers thousands of international mail packages from its clients and delivers them directly to the postal system of each destination country.

Depending on the services you use, an international consolidator can both speed your package processing and provide good postal rate discounts.

Using the search term “international mail consolidators” you will find dozens of companies that offer this service although the one that we use is UPS Mail Innovations.

Some Fulfillment Companies Have International Branches

If you outsource order fulfillment, there are some U.S. fulfillment companies that maintain branches in different countries. You can also contract directly with a non-U.S. based fulfillment house. This requires you to split your inventory plus pay the extra duties and freight costs to the foreign location, but this is a way to speed delivery of export orders.

Duties and Taxes Are Always an Issue

Most of our clients ship their international orders with import duties and foreign taxes paid by the customer upon delivery. In Canada, there is an extra $5.00 processing fee charged by Canada Post to cover collection of these taxes and fees. UPS and FedEx provide a brokerage and collection service, too, but the cost is much higher. A good resource on this topic is the USPS international guide.

Extra Packaging Is a Must

Domestic parcel processing systems are hard enough on shipping cartons and protective wrapping, but international shipping is even more demanding. The best international packing technique is a box within a box with paper or bubble wrap between the inside and outside cartons.

But, if this is not affordable in your business, a good alternative is use of heavy-duty cartons (ULINE is a good source) and extra interior wrapping. Either way, it is vital that your shipping label shows both your return address and the delivery address clearly and completely.

Summary

Export sales volume is increasing and this makes international rate shopping an even more important part of your order processing management. Use of the UPS, FedEx and USPS online pricing systems is the best way to rate shop because of the complexity of the many shipping alternatives and the huge cost differences involved. Plus package processing automation, parcel consolidation services and possible foreign warehouse solutions can further add to your cost savings over time.

John Lindberg

John Lindberg

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