News
International Delivery: Documentation and Data
Understandably, companies that have been forward thinking enough to enter into e-commerce already, are now looking to widen their market and expand distribution overseas. This, however, brings with it a number of complications in terms of the delivery-end of fulfilment. The problems exist in two areas: documentation and data. In turn, both documentation and data requirements can be influenced by the country of destination. Certainly there are some simplifying rules to get started (for example the European Union is simple and straightforward), but if you want to ship outside of the EU your best advised to use a carrier shipping system, or a multiple carrier system. We’ve tried to highlight some of these points by using one of our biggest customers as an example. They launched their international shipping last Autumn, with a fully automated system. Of course it’s not only relevant to retail giants, but the type of system required can be used by retailers large and small.
Documentation
First, documentation, documentation! The bad news here is it can appear a bit complicated. The good news is you do not need customs documentation for the EU. For the rest of the world (RoW), once you get used to it, there is little change over time. Hence it becomes quite simple. International shipments to the RoW have additional documentation considerations because of the customs regulations and requirements in each country or trading block. Carriers ship under postal or commercial regulations, requiring different paperwork to be completed. Postal regulations apply to products that are despatched by the local “postie” company. In the UK Royal Mail require a summary document to be produced and this differs when the value of the items within the consignment fall below certain values (e.g. a CN22 or CN 23 may be required). Under commercial regulations (that is, for all of the other carriers) it can be that commercial or pro-forma invoices are required. Sometimes because the domestic carrier (the one picking up the retailers’ goods) will have a different partner that delivers the items in the destination country, there may be a need for additional labeling.
Another factor that must be considered is whether to make shipments Duty Paid (DP) or Duty unpaid (DU). Duty unpaid is the commonest and simplest method of shipment. On the positive side it is relatively easy to administer, on the negative side, the customer is not given a landed price and is left to work out and pay their duty themselves (where applicable). Duty paid is a more complete service, but executed to the letter of requirements can be complicated. Both DP and DU have different data and documentation requirements for data and may be printed on different stationery. Finally, just incase you were getting the hang of it, different countries require different numbers of copies of the information to be produced!
Product data
Second, product data, product data! Customs require information concerning the products that are being shipped: descriptions, product group descriptions, values, weights, fabric content, country of origin of products and harmonization codes. Different products attract different import duties and taxes and at some stage this needs to be calculated. This can be required in various ways whether on the paper or electronic communications and sometimes with specific summaries. Ultimately all of this has to be recorded to support the legal requirements for shippers to be able to report on values and quantities that have been shipped to each destination country. Again, there are some simple rules that help. The purpose of the EU is to remove inter-country tariffs. Therefore product data is not required for EU shipments so for the majority of retailers and the majority of their volume the process need not be that complicated.
Destination
The most important rule here: remember to define the EU properly. There are several exceptions to the common understanding of which countries are in the EU – for example Jersey and Guernsey are often treated as part of the UK, and while the Balearic Islands are in the EU with Spain, the Canary Islands are actually outside and therefore require customs information. And of course exclude Norway and Switzerland.
When shipping items internationally, some carriers will ship items to different airports within the destination country and this requires understanding of how the postcodes are configured for those countries to enable the label to contain the correct information.
Case Study
At the end of 2008 one of UK’s best known department stores introduced their new international delivery service. This was made possible using a third party multi carrier despatching system. In terms of their operations one of the biggest issues was estimating freight costs. As most international shipments, certainly outside Western Europe will be shipped via airfreight, capacity is very dependent upon a balance of weight and volume, leading to charges being calculated as a function of both. Simplistically, if a parcel is large but light, due to the aircraft capacity that it occupies it may well attract a “volumetric weight” several times greater than its actual weight, and the charges would be based on this volumetric weight.
It is therefore critical to capture the exact weight and dimensions, and these are rarely known until the point of packing, when the actual weight of the packaging and inserted flyers can be taken into account, and the volume can be assessed. Also the postal carriers have rigid size restrictions that vary by destination country, so this needs to be taken into account when determining whether a postal carrier can be used for a specific consignment. Therefore at the packing bench they made sure they knew the exact content of each package within a consignment. The export documentation is parcel specific, the exact weight and volume are captured through systems and processes that link directly through to the MetaPack system. Companies using the MetaPack system range from large players such as M&S, John Lewis, Halfords and Dixons to a whole host of smaller online retailers.
All of the necessary product detail and consignment values are passed through to MetaPack from the order details, via a direct interface. For smaller clients, data can be transferred via configurable file import or using an eCommerce platform that links to an international despatching system. For this store, the product information is automatically combined in MetaPack with the volumetric and the weight. The despatch system then has all of the information, including the country of destination to pass to MetaPack for it to make the decision on the eligibility or otherwise of a postal carrier, and consequently the number of copies and type of document necessary to accompany the shipment. The documentation is then printed automatically along with the appropriate carrier label(s), taking the complex decision making and completion of any export documentation completely out of the operator’s hands. A typical system of this type will provide an audit of the carrier selection, the chosen documentation and critically the management of tracking data so that the delivery can be closed off with a suitable tracking status. Finally, the system maintains the transaction data for six years in case it is required for customs inspection. Job done!
Patrick Wall
CEO
MetaPack
May 2009