International Shipping 101: DDP, Returns, Undeliverables & Insurance

Shipping internationally is no easy task and comes with a lot of complexity. At FlavorCloud, we make it simple by taking care of everything for you—wherever you’re shipping. Leveraging FlavorCloud’s Global cross-border carrier network gives you high-quality shipping at the best rates across our algo-optimized routes.

Wherever you’re shipping, there are important pieces of information of which to be aware. This article will run through and provide guidance on some essential aspects of selling globally, covering DDP shipping, handling of returns, undeliverables and insurance.

Delivery Duty Paid (DDP)

The best customer experience in shipping goods is to go DDP.

FlavorCloud’s DDP service allows the end consumer to view guaranteed rates for duties, taxes, and fees that would apply to their shipment before they finalize their order. This reduces the number of rejected parcels compared to if a consumer were to experience the bill on receipt via a Delivery Duty Unpaid (DDU) service.

In addition, DDP shipments that process through FlavorCloud’s custom clearance network receive expedited service, with FlavorCloud as the importer of record. 99% of parcels shipped through FlavorCloud’s Global Network leverage this service providing an optimal customer experience.

IMPORTANT TO NOTE:

  • DDP services are available for both Express and Standard shipping service levels
    • There are a few country exceptions where DDU is the only option.
  • Standard carrier delivery estimates of 6-14 business days apply to both DDP and DDU orders. However, DDU does not go through our expedited clearance network, so can see additional delays of several weeks due to formal clearance—impacting customer experience.
    • Note that the transit estimate does not include customs processing in the country of import.
  • Based on customs review times, Standard DDU orders typically take additional time for clearance (typically 2-3 weeks).
  • To ensure your goods ship DDP, HS codes, and country of origin information must be correct.

Returns

Returns are defined as when the end customer has received the shipment, and they deem that they wish to request an RMA (return merchandise authorization) to send it back to the merchant.

Returns can be processed via the FlavorCloud app, which shows the shipping cost to return the item(s). We recommend that merchants devise a returns policy on a country-by-country basis, taking into account the value of goods and return shipping costs. Merchants can also decide if they wish to absorb return shipping costs or pass it on to the end consumer. FlavorCloud can help with a cost-benefit analysis for countries where it makes sense to offer seamless returns.

Undeliverables

When the carrier cannot deliver parcels to the end customer, it is considered undeliverable.

The parcel may be undeliverable due to the following reasons:

  • Mislabeling or missing labels
  • Accidental re-routing or sorting
  • Incorrect address
  • The customer does not accept the parcel or is unavailable
  • PO box not supported

In the above scenarios, carriers need guidance on how to handle the undelivered item(s). Typically, once a parcel reaches the import (destination) country, standard carriers cannot return and, by default, have abandon policies in place. Express carriers have the same default policy unless there are local rules against destruction or the customer is willing to pay return shipping charges.

Note: in most cases, return shipping costs are much higher than original shipping charges and therefore do not make sense for the merchant in terms of unit economics.

Insurance Decisions

We recommend securing business insurance to cover lost shipments as FlavorCloud maintains less than 1% in lost parcels on average across our Global network.

It is possible to purchase insurance with FlavorCloud by selecting the insurance option within the app. However, this requires merchants to choose insurance for all or none of their shipments, which can be expensive (1%-3% of order value) and does not make sense given the low loss rate.

Express carriers tend to have default insurance up to a maximum of $100, while standard carriers typically do not offer any. All claims’ approvals and amounts are at the carrier’s discretion and can take up to 90 days, and the vast majority are denied. Thus, we recommend purchasing specific business insurance to cover larger average order value (AOV) shipments to mitigate risk for your business.

If you’re ready to tap into the world’s largest carrier network, with the best-negotiated shipping prices and grow your business globally, please get in touch at: contact@flavorcloud.com.

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FlavorCloud Team

Making international shipping easy