5 Tips That Will Help You Save Money on International Shipping

International shipping remains a critical component for businesses seeking to expand their reach across global markets. As we step into 2024, the importance of cost-effective logistics is more pronounced than ever. Whether you’re a small business or a multinational corporation, navigating the complexities of international shipping while controlling costs is essential for maintaining a competitive edge.

The global economy continues to thrive, with international trade growing steadily year after year. This sustained growth presents a prime opportunity to reassess your shipping strategies and identify areas where you can cut costs without compromising service. However, alongside this growth, we’ve also seen a rise in shipping expenses, driven by factors such as increasing fuel prices and the continuing impact of supply chain disruptions. Major parcel delivery services, including UPS, FedEx, and USPS, have responded by raising their rates, with some increases reaching up to 6% this year.

For businesses that rely on shipping goods internationally, these cost hikes can have a significant impact on the bottom line. But rather than seeing this as a barrier, it’s an opportunity to refine your logistics strategy and find innovative ways to save. By taking a strategic approach, you can manage these rising costs, keep your operations efficient, and pass on savings to your customers.In this article, we’ll explore actionable strategies to help your business save money on international shipping in 2024, ensuring that your global operations remain both competitive and profitable.‍

Understanding the Costs Involved When Shipping Internationally

When it comes to international shipping, the costs can quickly add up, making it crucial to understand the various factors that influence these expenses. A deeper understanding of these elements can help you make more informed decisions and potentially save money in the long run.

Shipping Rates: The Core Components

Shipping rates are determined by several key factors, each of which plays a significant role in the final cost you pay to get your products across borders. The weight and size of your package are typically the first considerations; the heavier and bulkier the item, the more expensive it is to ship. Additionally, the destination is a major factor—shipping to distant or remote locations often incurs higher fees due to the additional handling and transport required.

Speed is another critical element. Faster shipping options like express or expedited services naturally come with a premium price tag, while slower, economy shipping can be more cost-effective if time isn’t a pressing concern. Balancing these factors—weight, size, destination, and speed—can help you optimize shipping costs.

Hidden Fees: The Unseen Costs

Beyond the base shipping rates, there are numerous hidden fees that can catch even seasoned shippers off guard. Fuel surcharges, for example, are common and can fluctuate depending on the current cost of fuel, adding an unpredictable element to your shipping expenses. Taxes and duties are another area where costs can escalate, especially if you’re shipping to countries with high import taxes or strict regulations.

Handling fees also deserve attention—these can include charges for special packaging, additional handling for fragile items, or fees for customs clearance. While these fees may seem small individually, they can accumulate quickly, inflating your overall shipping costs. Being aware of these potential pitfalls allows you to better estimate the true cost of shipping and avoid unpleasant surprises.

Tough Lessons on International Shipping

The rise in international shipping is thanks in large part to the global online marketplaces that now connect buyers and sellers in almost every country: Amazon, eBay, and Alibaba account for 56% of cross-border shipping worldwide.

‍

‍

While these companies have created successful, unified online marketplaces for retailers, logistics is not a one-size fits all approach. eBay, for example, has opened up retailers to many new international markets, but their attempts to simplify international shipping can be costly for sellers.

As The Balance explains, eBay’s Global Shipping Program (GSP) streamlines logistics by handling the process through a third party. But for certain retailers who ship small, lightweight items the GSP can overcharge them by $20 per parcel when compared to direct shipping.

Even when companies ship directly, the calculus of taxes, shipping, and fulfillment can be difficult to figure out when trying to save money with international shipping.

Let’s explore how, with a little foresight and honesty, your business can save money with international shipping.

5 Ways to Save Money with International Shipping

1. Shop Around

Based on the type of products, the size and weight of your packages, and where you’re shipping, one shipping company’s rates may not be the best solution. Compare prices based on these factors, and you’ll likely find you could pass on some savings to your customers.

‍

2. Find the Right Fulfillment Center

For smaller retailers, a fulfillment center can serve as a cost-effective way to have an international business without international offices. That’s because when you choose a fulfillment center close to your target market (i.e., Florida for shipping to Latin America or Washington for Japan and China), you can dramatically reduce the shipping time and cost as well as labor for your staff.

3. Use Electronic Trade Documentation When Possible

Logistics partners and countries that offer Electronic Trade Documentation will save you time and printing costs and cut down on paper waste, because you’re no longer printing up to five copies of all the documentation. When vetting providers, check whether they accept all paperwork electronically. An added bonus is if they actually process customs documents for you.

4. Never Undervalue Your Products

Some companies may try to save on customs by underreporting the value of what they’re shipping. Not only will this result in fines and penalties, but repeat offenders may lose the right to ship internationally. Honesty is worth it in the long run.

5. Find a Logistics Partner with Regional Expertise

Logistics is one of the most difficult parts of running a business with international consumers. Each country has its own customs, regulations, and taxes. Finding a logistics partner with regional expertise—versus a “global” carrier—can be a huge savings in emerging regions like Africa and Latin America. Regional expertise means they understand the customs process and can help you reduce costs in the final mile delivery stage because they have access to low cost, high quality providers.

Additional Tips for Cost-Effective International Shipping

As international shipping costs continue to rise, finding additional ways to cut expenses can make a significant difference to your bottom line. Beyond the basics of selecting the right carrier and negotiating rates, there are several other strategies that can help you optimize your shipping processes and reduce costs. Here are three key tips to consider:

Optimize Packaging: The Hidden Savings in Smart Packaging

One of the most overlooked aspects of international shipping is packaging. The size and weight of your shipment directly influence the cost, so optimizing your packaging can lead to substantial savings. Start by evaluating your current packaging materials and methods. Are you using boxes that are larger than necessary? Are there opportunities to reduce weight by choosing lighter materials?

By selecting appropriately sized boxes and minimizing excess packaging, you can reduce both the weight and volume of your shipments. This not only lowers the shipping costs but also reduces the risk of damage during transit, as smaller, snugly packed items are less likely to shift around. Consider investing in custom-sized packaging solutions or using recyclable materials to further enhance cost savings and sustainability.

Consider Shipping Consolidation: Bigger Isn’t Just Better, It’s Cheaper

For businesses that frequently ship internationally, consolidating shipments is an effective way to reduce costs. Shipping multiple small packages separately can quickly add up, both in terms of individual shipping rates and handling fees. By consolidating these smaller shipments into one larger package or pallet, you can take advantage of bulk shipping rates, which are typically lower than sending items individually.

Shipping consolidation also simplifies the logistics process, as you’re dealing with fewer shipments, which can reduce the risk of delays and errors. This approach is particularly beneficial for businesses that ship to the same region or have consistent orders from the same customers. Coordinating your shipping schedule to allow for consolidation can lead to significant savings and more streamlined operations.

Use Free Trade Agreements (FTAs): Leverage Trade Deals to Lower Costs

Free Trade Agreements (FTAs) offer a powerful tool for businesses looking to reduce tariffs and duties on international shipments. These agreements between countries can significantly lower or even eliminate import taxes on certain goods, depending on the terms of the agreement and the products involved.

To take full advantage of FTAs, it’s important to understand which agreements apply to your business and how to qualify for the reduced tariffs. This might involve ensuring that your products meet the specific rules of origin requirements or completing the necessary documentation to prove eligibility. Working with a customs broker or logistics expert who understands the nuances of FTAs can help you navigate these complexities and maximize your savings.

‍

The Bottom Line

Don’t settle for expensive international shipping rates. There are better options available. With a little time spent researching, you can save money, pass the savings on to your customers, and give your international business a greater chance for success.

If you’re one of the many companies looking to break into the Latin American markets, save money with international shipping from SkyPostal. Contact us today to learn about our end-to-end delivery service, competitive costs, and fast shipping times.