Current Issues

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

Is digitisation the key to preventing cross-border landed costs from disrupting international ecommerce?

21-Jun-2019
Is digitisation the key to preventing cross-border landed costs from disrupting international ecommerce?
UK ecommerce businesses currently shipping to the EU (and vice-versa) need to prepare for the forthcoming split from the single market – or so is the latest thinking. As geopolitical factors such as these drive changes within international trade regulations, it has become nearly impossible for organisations to effectively ensure compliance. It has also become more costly than ever as penalties for denied-party infractions, for example, reach record levels. Not to mention consumer confidence in international ecommerce retailers.

To date international air-to-final-mile has been a winning combination for ecommerce – and across many European countries this includes train/truck/van-to-final-mile. However, as Sweden witnessed in Spring 2018, a new value-added-tax (VAT) on all postal items arriving from non-E.U. countries caused wide-spread disruption and over 400,000 refused packages as consumers were presented with an additional fee on delivery (so called landed costs) that they had no prior visibility of.

Without a trade agreement in place, a similar scenario could easily arise across the EU, in particular as the EU Commission is set to abolish a current exemption on VAT for ecommerce imports valued at less than €22. The impacts are potentially far-reaching. Consumer costs will undoubtedly increase as vendors will be required to pay increased duties and taxes, and without visibility of these costs provided accurately at checkout, it could lead to a mass ‘return to sender’ scenario where packages are rejected at the last mile of delivery. Research shows that 93% of consumers will not make an online purchase without full visibility of estimated import costs, plus delivery: being unprepared and unaware of the duties isn’t an option for organisations who want to continue to sell internationally.

With uncertainty mounting, there is an urgent need for logistics and supply chain professionals to have a more comprehensive understanding of current and potential international trade developments due to the likely impact on global sourcing, infrastructure and operations. The good news is that utilising global trade content — solutions packed with everything from the latest import and export data down to the bill of lading, to databases for international trade regulations, rulings and duties — can help companies gain greater visibility and confidence within their trade operations.

Realising New Opportunities

Any check-out process for goods that will be delivered outside their customs territory should, by default, use the Harmonised Item Description and Coding System to identify a product’s HS code and combine that with delivery destination to provide the full cost information consumers require to make a purchase decision.

In a sector where customers can come from virtually anywhere in the world, this global trade content helps ecommerce companies remain compliant with international trade agreements and avoid business transactions with restricted parties. To do so, many companies are loading duty and tax data, as well as sanctioned-party lists, directly into the back end of their shopping carts to provide accuracy and transparency around potential landed costs.

Global trade content is also beneficial in helping ecommerce companies better manage against difficult and costly cross-border returns. By disclosing duty and tax rates upfront during checkout, international customers understand the true cost of sale and are less likely to reject a shipment due to unexpected fees.

Giving customers visibility of these otherwise hidden costs is not only key to realising new market opportunities, however. It also provides an opportunity for competitive differentiation, particularly with items that consumers can purchase from multiple ecommerce vendors. Giving a potential customer visibility of the item cost, plus separate shipping costs – even shipping options – can add positively to the overall customer experience by positioning yourself as a trusted and transparent retail partner.

Conclusion

There is no doubt that global trade uncertainty is set to stay – at least for the foreseeable future. However, this is no reason for domestic businesses to shy away from international expansion. Nor is it a reason for ecommerce retailers operating internationally to consider battening down the hatches. On the contrary, those organisations who are set up properly and are harnessing global trade data within their sales and fulfilment processes, will not only reduce risk; they have the opportunity to positively differentiate themselves and gain international competitive advantage.

David Griffiths
Senior Product Marketing & Strategy Manager, Adjuno
Putting your brand in the hands of AI
Richard Seel
Managing Director Supply Chain & Logistics, Delaware
Meeting the Challenge of Supply Chain Efficiency – How Manufacturers Can Achieve their Goals
Olivier Binet
Managing Director International Markets, InPost
How to build sustainability into last mile deliveries
Ron Volpe
Global Vice President Apps Business Development, Tradeshift
Under-Pressure Retailers Turn to D2C to Level the Playing Field
Craig Summers
UK Managing Director, Manhattan Associates
Margin Erosion is turning the spotlight on the Warehouse
Simon Runc
Principal Visual Analyst, Atheon Analytics
Unlocking the Value in Data
Steve Purvis
Operations Director, Bis Henderson Space
Brexit Uncertainty Highlights Need for Flexible Logistics Strategy
Alan Gunner
Business Development Director, Adjuno
Starting at the source: achieving a sustainable supply chain
Craig Summers
UK Managing Director, Manhattan Associates
Conquering Connected Commerce
Mark Jolley
EMEA Manufacturing, Transport & Logistics Solutions Sales Lead, Zebra Technologies
Augmented Reality is becoming a Retail Reality
Craig Summers
UK Managing Director, Manhattan Associates
The Cost of Doing Nothing
Sam Ireland
International Marketing Manager, Loftware
Are You Navigating Global UDI Compliance?
Stephen Cameron
Business Development Director, SWRnewstar
How the Resource and Waste Strategy Can Empower Industry
Georgia Leybourne
Senior Director International Marketing, Manhattan Associates
Are we embracing the profit potential of the over 50s?
Jon Moody
Chief Executive Officer, SSG Insight
The Future of Supply Chain Management
David Luttenberger
Global Packaging Director, Mintel
Mintel announces top global packaging trends for 2019 and beyond
Andrew Tavener
Head of Marketing, Descartes UK
Compliance Management – it’s time for joined up thinking
Stephen Cameron
Business Development Director, SWRnewstar
Primark's move to 100 per cent sustainably sourced cotton should be commended
Marc Corriveau
Account Manager, Loftware
Changes in packaging result in ROI for F&B products
John Perry
Managing Director, SCALA
Why an extension is best for British businesses
David Jinks MILT
Head of Consumer Research, ParcelHero
Booking a courier? No printer required, says ParcelCompare
Graham Parker
CEO, Gravity Supply Chain Solutions
Mitigating The Risks Of Trade Wars And Tariffs
Sam Ireland
International Marketing Manager, Loftware
How Brexit Will Impact Supply Chain Labeling?
Sid Holian
Managing Director, Bis Henderson Consulting
Three critical steps to a hi-tech, agile supply chain
Manu Tyagi
Associate Partner, Retail and Consumer Goods, Infosys Consulting
M&S and Ocado have signed a £750 million deal to take M&S groceries into the home delivery market
Olivier Frère
Serialisaton Expert, Zetes
Understanding the Tobacco Products Directive
Paul Heiden
Senior Vice President of Product Management, Ultimaker
6 overlooked benefits of 3D printing for your supply chain
Dave Locke
EMEA Chief Technology Officer, WWT
Merged pharmaceutical firms seek fast-track route to savings
Johannes Panzer
Head of Industry Strategy for Ecommerce, Descartes
How to make international ecommerce transparent, efficient and cost-effective
Craig Summers
UK Managing Director, Manhattan Associates
Putting the WOW in the checkout experience
Richard Parfect
Fund Manager, Seneca Investment Managers
The cessation of Airbus A380 production
John Perry
Managing Director, SCALA
What next for British business?
Chris Jones
EVP Marketing & Services, Descartes
5 Key Logistics Trends and Technology Implications for 2019
Craig Summers
UK Managing Director, Manhattan Associates
What is the Checkout of the Future?
Andres Richter
CEO, Priority Software
UK Manufacturing: The Productivity Conundrum