Operations and Management: Overseas Shipping Options

Aug 01, 2003 9:30 PM  By

Most catalogers aren’t international marketers on the scale of Lands’ End or Viking Office Products. But thanks largely to the Internet, many mailers receive at least a smattering of orders from foreign soil.

Catalogers shipping fewer than several hundred international orders a month are probably best off fulfilling them from their stateside distribution center, rather than setting up an overseas facility. Heavy shipments nothwithstanding, “it’s less expensive to ship from the U.S. than on the ground in Europe for anything less than 500 orders a month,” says Susanne Lambert, sales and marketing manager of Gilroy, CA-based order processing and fulfillment services firm Rush Order.

Delivering products overseas is similar to sending your print catalogs overseas (see “Mailing It Over There,” May issue). Some carriers, such as DHL, deliver product to the local post offices, which then deliver the package to the customer. Others carriers, such as Federal Express and United Parcel Service, usually deliver the package directly to the customer’s doorstep.

Costs vary among the major carriers depending on package weight and destination. When selecting a carrier, though, cost shouldn’t be your only criterion. Optimally, in addition to delivering the packages, your carrier will provide the correct documentation to accompany your overseas packages. So you want to be sure that your carrier is experienced in dealing with the customs requirements of the countries to which you ship your orders.

“If you don’t have all the necessary documentation and correct tariff code information,” Lambert says, “your shipment can get hung up in customs for weeks, even months, until the correct documentation is received.”

For a parcel to pass through customs, it must possess a harmonize code, a standardized set of numbers indicating to customs officials what’s in the package and how much duty to collect from the parcel recipient. Like duties, harmonize codes vary by country.

Duties are levied on a package once it arrives at the destination country. The customs department there then notifies the customer of the duty owed. Duties are based on the contents and destination of the package as well as the value of the package, says Lambert.

“Collecting the duties is difficult,” says John Flick, spokesperson for UPS International. “It’s one of the reasons international cataloging hasn’t been that successful” for many U.S. marketers. Some carriers, including UPS, will collect from the customer the duties on behalf of customs.

Indeed, international customers can be shocked by the expense of shipping charges and duties, says Liz Plotnick-Snay, chief operating officer of Gooseberry Patch. The kitchenware and gifts cataloger does not actively seek international orders, but they do trickle in, usually through the Delaware, OH-based mailer’s Website.

For instance, a customer in Australia recently purchased a set of 10 cookbooks for $119. Gooseberry Patch offered the customer a choice of receiving the package via the U.S. Postal Service’s International Priority Airlift, which takes 8-10 days, for $60, or its International Surface Airlift (ISAL), which takes six to eight weeks, for $31. Tack the duties on top of the delivery charges, and sometimes they add up to more than the price of the product.

For that reason, Gooseberry Patch notifies overseas customers of the impending charges before sending the order, giving the customer 14 days to respond. This minimizes the chance of the customer refusing to pay after being hit by a larger-than-expected invoice.

Unhappy returns

If the overseas customer accepts the order and then wants to return it, the cataloger will have to pay the U.S. duty on the package.

In many cases, says William Sauer, vice president of finance and operations at International AutoSport, a Charlottesville, VA-based car parts cataloger, it’s cheaper to eat the cost of the goods than to ship a returned order back to the U.S. For larger-value orders, though, “sometimes we pay the duty on the goods to have the package shipped back here,” he says.

The cataloger, which also mails the International Auto Parts title, uses both Priority Mail and UPS for overseas order delivery. But the mailer doesn’t promote international shipping in its catalogs. “It’s not something we encourage,” Sauer says, “but we do ship about 5% of all orders — about 30 packages a week — overseas.”