Rising Shipping Charges: How we Mitigate Risk and Keep Costs Low | FlavorCloud

Every year there are industry-wide (and worldwide) changes to the cost of shipping.

It’s known as the GRI (general rate of increase) and comes into effect for shipping carriers on January 1, when new charges and surcharges kick in (typically a little later for postal companies).

Many factors drive these changes, which increase costs and present practical issues for merchants and carriers (e.g., changes in customs filing processes, supply chain and capacity issues and pandemic related operational changes).

How Does FlavorCloud’s Volume Discounted Shipping Rates Keep Costs Down?

With FlavorCloud, mitigation is built into our service, keeping costs and risk low for our customers.

Our largest global network of 300+ carriers means we can negotiate high volume discounts, to offer the very best international shipping rates, every time—automatically. Our intelligent AI algorithm also ensures that any changes in carrier or customs requirements are taken care of.

What Drives Increased Shipping Charges?

Annual increases are a ‘state of business’ in the world of shipping. There are industry-specific factors as well as other general issues that affect all businesses:

• Inflation, higher fuel and labor costs
• Changes and increases in cross-border fees and surcharges (impacting advancement, VAT handling fees etc., for carriers)
• Pandemic related surcharges and supply chain capacity issues

COVID and Supply Chain Issues

As we settle into 2022, carriers are still feeling the impact of COVID and the problems it has caused for the global supply chain. They’re stretched to capacity.

There have been macro-economic trends fueling this, such as the shift in buying patterns, with online shopping soaring over the last two years. Global business data platform Statista, for example, predicts worldwide retail ecommerce will reach a massive $5,545 billion by the end of 2022.

Supply and Demand

As the laws of supply and demand dictate, overworked carriers are raising their shipping rates aggressively­—we’re seeing larger increases than we’ve seen in the last 10 to 15 years with up to 10% increases for DDP shipping for some service levels and weight bands—as well as carriers being choosier about shipping less attractive items i.e., goods that are bulky or heavy.

Even Amazon is feeling the pinch, raising the price of its Prime subscription by almost 17% for the first time since 2018!

Advocating for Our Customers

At FlavorCloud, we’re able to advocate for our customers by tapping into our huge global carrier network to negotiate significantly discounted cross-border shipping rates. It means we can help offset COVID and supply chain costs and provide the best customer experience.

Our algo-optimized AI technology consolidates best rates, optimized routes, and automates customs requirements for every country. For example, changes to HS codes and GIR are taken care of automatically—we handle the whole process.

DDP for Best Results, No Surprises

FlavorCloud also automatically ensures that every package is DDP (Delivery Duty Paid) for the best customer experience, with no nasty surprises.

DDU (Delivery Duty Unpaid) leaves customers with an (often unexpected) extra cost at delivery, covering duties and taxes that weren’t factored into the shipping they paid for at checkout.

With FlavorCloud, customers always get the full guaranteed landed cost (inclusive of accurate taxes duties and all related cross-border fees), and the best international shipping rate thanks to our bulk deals with carriers.

Different Countries, Different Rules

Each country has different rules and regulations, and FlavorCloud understands this. We build into our AI all the ever-changing rules, regulations, and information around worldwide shipping, so merchants don’t need to worry about keeping up.

It can range from the different rules countries have on what goods can come into the country to some putting a cap on the amount carriers can charge in fees. Imports into the US and exports out also have very specific rules and protocols.

We have it all covered, automatically, so with FlavorCloud, your packages can fast-track through customs (like your own TSA pre-check), as smoothly as possible.

Summary:

Change is inevitable in every part of life, and shipping rates are no different.

With FlavorCloud as a partner, you can be sure that you are protected as far as possible from cost increases and processing risks.

Our largest global carrier network means we can negotiate and mitigate against increases and offer:

• The best, hugely discounted rates
• Optimized, faster routes (if one carrier hits a problem, we can use another)
• DDP-only options and guaranteed full landed cost for a great customer experience
• Automated customs requirements taken care of for smoothest clearance

 

If you have any questions or need any help with your international shipping, please get in touch at: support@flavorcloud.com