Anyone who has been following the news knows that with tariff increases, boycotts at ports or other international relations, international distribution requires detailed attention. As a 3rd party logistics company, transportation is an inherent part of Stalco’s operations. Starting with coordination of inbound logistics to move our clients’ inventory from point of origin, Stalco works with multiple layers of transportation from air, sea, ground and rail to move our clients’ inventory to our facilities in Toronto. Once goods are at our facilities, they are then picked and packed into consumer shipments which are then transported via ground to the United States. As goods enter the U.S., they are deposited at various transportation companies that ultimately transport the goods to localities within the country, wherein they go to last-mile carrier delivery companies that will transport and deliver the goods directly to consumers.

Transportation also plays a critical role in reverse logistics which is the process used to manage customer returns.   Using a variety of different methods, consumer returns will be transported back from the point of delivery to central return locations wherein they will be processed for return to us. Ultimately once the package has been processed for return to Stalco, it is then transported via truck back to our facilities.

According to a recent article in Logistics Management magazine, the top challenges to the transportation industry are fuel costs, business process improvement, customer service issues, increasing compliance regulations, driver shortage and retention, government regulations, environmental concerns and technology strategy and implementation.

It is vital to communicate with your client and determine the problem areas it is experiencing anywhere within its transportation framework.

For example, A large U.S. Health & Beauty retailer had been in selling into Canada for several years with limited success. They had invested in their US Distribution Center and were very happy with their fulfillment capabilities, but Canadian customers complained at the high cost of shipping and additional taxes and duties being applied at the border. Canadian sales were a fraction of what they should have been, and they were losing ground against their competition in this important market.

They had very aggressive pricing for domestic shipping but didn’t have the volumes to compete for international rates. Stalco approached them using a consolidated shipping solution and it immediately addressed a number of their issues.

Stalco picked up their Canadian orders directly from its U.S. Distribution Center and brought them to our Distribution Center in Toronto daily. Stalco cleared the goods through customs so consumers wouldn’t get hit those surprise charges and then shipped the products domestically with Canada Post. Even with added cost of trucking the goods to Toronto, Stalco’s huge discounts with Canada Post helped the customer slash their Canadian shipping costs by 40%.

Buyers no longer had to worry about duties and taxes and most importantly, the customer didn’t need to make any changes to its fulfillment process. The logistic were seamless and it gave the customer incredible flexibility. They timed the pickups to coincide with their volumes and as shipments to Canada picked up during the holiday season, the average cost per shipment got lower. The customer found an easy and cost-effective way to reach its Canadian clients and grow its business north of the border.

For many small to medium sized businesses, working with an in-country fulfillment partner makes the logistics even simpler because there are no additional customs or duties to worry about and it guarantees the best available in-country delivery rates. A well established in-country partner typically offers both Direct Entry and In-Country Fulfillment, as well as an easy returns process which is an essential element of any ecommerce strategy. Exchanges and easy returns are considered ‘high importance’ to at least 69% of Canadian shoppers and that number will continue to grow if ecommerce sites fail to make the shift to a more streamlined shipping and returns method.

When shipping globally, it is always most efficient to work with a partner in the destination country. Customers will recognize the ease of ordering and will appreciate the transparency when you provide the real cost of the product and shipping. Remember, consumers are increasingly purchasing online, and global commerce is quickly shifting their expectations. Your convenient shipping and delivery processes will be the determining factor between you and other international ecommerce retailers competing for new customers.

Recently, the greatest benefit to companies shipping internationally has been the Duty Drawback Program which allows for the fulfillment of U.S. direct-to-consumer orders from anywhere in the world via Canada and the elimination of duty by recouping duty paid on goods imported that are subsequently shipped to a U.S. consumer. As the trade war becomes more severe and containers are shipped to fulfill consumer demands for holiday shopping, knowledge of this program will become more beneficial for those doing business in China, the US and Canada.

 

About the Author:

Steven Page is President of Stalco, Inc., a Canadian-based logistics and fulfillment company with 25 years of experience in assisting U.S. companies with their Canadian distribution needs. Due to its large shipping volumes and strong carrier relationships, Stalco can guarantee the lowest possible pricing on shipping rates and the fastest delivery times available.  Stalco also ensures same day order processing and the same transit times you would experience from a U.S. facility.

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