Navigating the Risks of International Shipping

We’ve outlined a few of the key risks that trip up retailers when shipping internationally, along with a collation of actions and associated suppliers and startups that can help you find success fast before the risk catches up.

Expanding your market globally is an exciting opportunity for retailers to increase revenue and brand presence. However, international shipping introduces a series of risks that can affect your supply chain's efficiency and customer satisfaction. This is particularly crucial during peak seasons when the volume of orders spikes and the margin for error narrows. For senior executives, understanding these risks and implementing robust mitigation strategies is paramount to maintaining operational excellence and ensuring customer satisfaction.

Key Risks in International Shipping

1. Logistical Complexity: International shipping involves multiple stages, including packaging, customs clearance, transportation, and final delivery. Each stage presents challenges that can disrupt the smooth flow of goods.

2. Customs and Regulatory Compliance: Different countries have varying customs regulations, duties, and import restrictions. Non-compliance can result in delays, additional costs, and even confiscation of goods

3. Transit Damage and Loss: Long-distance shipping increases the risk of damage and loss. Goods are handled multiple times and may be exposed to harsh environmental conditions.

4. Peak Season Overload: During peak seasons, shipping carriers and customs offices experience increased workloads, leading to potential delays and errors.

5. Exchange Rate Fluctuations: Currency volatility can affect the cost of shipping and impact profit margins.

6. Fraud and Theft: High-value shipments are particularly vulnerable to theft and fraud during transit, especially in regions with higher crime rates.

7. Customer Expectations: International customers expect the same level of service as domestic ones. Delays, damaged goods, or unexpected fees can severely impact customer satisfaction and brand reputation.

Steps to Minimise Risk with International Shipping

We’ve collated a few key steps and recommendations to help you get ahead of the game.

1. Partner with Reliable Carriers: Choose reputable international shipping carriers known for their reliability and comprehensive tracking capabilities. Establish strong relationships with these carriers to ensure priority service, especially during peak seasons. Evaluate carriers based on their performance metrics and past reliability during high-demand periods.

DHL is making great strides in this area to help make shipping more reliable. Recently, DHL Express Commerce launched an international e-commerce returns portal for SMEs to help streamline the process making it easier than ever to help provide excellent services.

2. Invest in Robust Packaging: Ensure all goods are packaged to withstand the rigours of international transit. Use high-quality materials and techniques to protect against damage. For fragile items, use additional cushioning and clearly label packages as "fragile." Implement a standardised packaging protocol across your organisation to maintain consistency and minimise damage.

We recommend LC Packaging. They’ve been around for 100 years and counting, and with a push towards sustainability, they are a great choice.

3. Enhance Customs Compliance: Stay abreast of customs regulations in all destination countries. Implement a compliance management system to ensure all documentation is accurate and complete. Train your logistics team on international shipping regulations and consider using customs brokerage services to facilitate smoother clearance processes. 

Interested in improving your compliance? We recommend Hurricane Ecommerce as a great resource.

4. Optimize Inventory Management: Accurate forecasting and inventory management are crucial during peak seasons. Use advanced analytics to predict demand and ensure sufficient stock levels. Implement just-in-time (JIT) inventory systems to reduce the risk of overstocking and understocking.

Shopify brands have access to Prediko who can help you make better predictions & POs in minutes.

5. Leverage Technology for Tracking and Transparency: Invest in advanced tracking systems that provide real-time visibility into your shipments. Use IoT devices and RFID tags to monitor the condition of goods in transit. Provide customers with tracking information to keep them informed and enhance their confidence in your shipping process.

We work with Despatch Cloud and their suite of software solutions. Despatch Cloud offers a wide array of integrations, bringing together over 150 courier and shipping services into one streamlined, user-friendly solution.

6. Mitigate Currency Risks: Use financial instruments such as forward contracts and options to hedge against currency fluctuations. Work closely with your finance team to develop a currency risk management strategy that protects your margins

Ebury is a Fintech company specialised in international payments, collections, and foreign exchange services. It offers financial solutions aimed mainly at SMEs and midcaps. Ebury offers foreign exchange activity in over 130 currencies - for both major and emerging markets - as well as cash management strategies, trade finance, and foreign exchange risk management.

7. Strengthen Security Measures: Implement robust security protocols to protect against theft and fraud. Use tamper-evident packaging, secure warehouses, and vetted transportation routes. Consider working with security experts to assess vulnerabilities and enhance your security infrastructure.

Sib Solutions are using a combination of AI, Industrial Internet of Things (IIoT) and intelligent video analysis to help organisations stay ahead of the increasing fraud and theft taking place.

8. Enhance Customer Communication: Maintain open and proactive communication with customers regarding their orders. Provide clear information about shipping times, potential delays, and additional fees. Use automated systems to keep customers updated and promptly address any concerns.

9. Plan for Contingencies and invest in regulated insurance: Develop comprehensive contingency plans for various risk scenarios, including natural disasters, political instability, and carrier strikes. Ensure your team is trained to implement these plans swiftly and effectively to minimize disruption. Consider enhancing or switching out your basic courier coverage, especially if your basket size is higher than average circa >£250. Your risk per shipment increases, especially over peak, and beyond just peace of mind, insurance actually helps drive better business and customer success practices along with protecting the bottom line.

You can book a meeting with us directly for insurance, or we are available through fantastic partners like Hub Europe and Despatch Cloud.

10. Regular Performance Reviews: Continuously monitor and evaluate the performance of your shipping processes. Conduct regular audits and reviews to identify areas for improvement. Use customer feedback to refine your strategies and enhance the overall shipping experience.

International shipping for large retailers is fraught with risks, but with careful planning and strategic partnerships, these risks can be effectively managed. By implementing the outlined steps, you can ensure a smooth and reliable international shipping process, even during peak seasons. This not only protects your bottom line but also enhances your brand presence.

Download our recommendations as an infographic to share with your colleagues!