Cross-Border E-Commerce a Top Priority According to Future of Posts Report
Much has changed since the first three months of 2020. In some ways, however, the change is merely an acceleration. In early 2020, we began our Future of Posts survey of 129 respondents from 52 national Posts from all over the world. Through this research, we found that parcels, cross-border e-commerce, and technology innovation were the top three priorities for Posts. We suspect this is even more true today. In this article, we’ll be taking a closer look at the growing importance of cross-border e-commerce.
Pre-pandemic, postal operators were already working to digitally transform. Today, remote work and social distancing are the new norm. As Escher’s Chief Sales Officer, Rodrigo Medgenberg explains:
“Consumers and businesses have flocked to online shopping to meet their needs both locally and internationally. Additionally, international shipping regulations now require extra attention and automation.”
The Future of Posts 2020 report has revealed helpful insights into Posts’ short- and long-term cross-border e-commerce strategies. Timely and efficient cross-border shipping has become critical to success in e-commerce.
Report Findings on Cross-Border E-Commerce
According to the Future of Posts 2020 Report, nearly 1 in 5 postal operators ranked cross-border e-commerce growth as most critical to their success. It fell second only to parcels, which over 1 in 4 Posts prioritized. Of those surveyed, 87% of Posts plan to manage the growth of e-commerce postal traffic in the near future. This includes investing in handling capacity with the help of automation, infrastructure, and staff.
In fact, automation was the most popular strategy for dealing with the projected increase in e-commerce postal volume. Thirty-nine percent of postal operators plan to automate. The strategy was closely followed by reorganization and new strategies that include outsourcing (30%) and increased handling capacity and staff (25%).
Posts already report strength in some areas. Four out of five have a strategy for product classification compliance for cross-border duties and taxes. Other areas of compliance strength include:
- transit times
- returns solutions
- transit time certainty
- compliancy risks
- cost transparency
- documentation difficulties
However, there’s a bit left to be desired when it comes to solutions for cross-border product repair and warranty support. There’s also a need for better denied parties screening. Most Posts surveyed did not have compliance strategies or solutions in place in these areas. Fortunately, improvement is not out of reach.
Overcoming Challenges in Cross-Border E-Commerce
Product repair, warranty support, and denied parties screening were not the only issues. Our survey found that Posts’ top three obstacles to cross-border e-commerce growth were:
- real-time tax and duty estimation solutions
- cost transparency
- transit times
This data backs up something postal operators already know: transparent, accurate landing costs and efficient delivery are critical to customer satisfaction and loyalty.
The hurdles don’t end there, of course. Documentation difficulties, compliance risks, product restriction screening, product classification, and solutions for cross-border product repair were also of comparatively moderate concern. Denied parties screening and risk reduction were also mentioned as an obstacle to Posts’ cross-border e-commerce growth
Easy return solutions were considered less important. Many postal operators have already adopted standard international return solutions. Posts considered informing recipients about the taxes and duties they will incur when purchasing online from abroad a more important e-commerce feature. Even more critical was the need for a solution for the customer to pre-pay custom clearance, duties, and taxes when ordering goods from abroad.
A Need for Cross-Border E-Commerce Solutions
Despite the obvious importance of real-time tax, duty, and landing cost estimation, only 32% of Posts offered a pre-paid tax and duty solution. Additionally, only 37% notified recipients of chargeable costs prior to purchase. Fortunately, solutions provided by customer engagement platforms like Escher help Posts automate product classification, calculate taxes and duties at check out, screen for product restrictions, and flag denied parties, reducing compliance risk and greatly improving the customer experience in the process.
To ensure strong cross-border e-commerce growth, Posts need solutions that meet their specific needs. Choosing the right solution will set postal operators up for international shipping success.