Why Is International Shipping So Expensive?

Are you a Canadian seller? Do high shipping costs stop you from going global? Unfortunately, many of you have the same question, “Why is international shipping so expensive?” Stallion can help you understand why and how to reduce them.

Key Takeaways

• Factors like distance, logistics, and customs can influence shipping costs. It is crucial to recognize these factors to create cost-saving measures.
  
  
• International shipping is expensive due to factors like distance, customs, fuel costs, and security measures. This can be a barrier for businesses trying to sell globally.
  
  
• There are plenty of strategies to reduce shipping costs. These activities include negotiating rates, optimizing packaging, and leveraging technology.
  
  
• Partnering with a reliable shipping partner, like Stallion and Canada Post, allows businesses to deal with international shipping challenges.
  

Why is shipping so expensive?

“Why does shipping cost so much?” is a common question many Canadian sellers ask. Shipping costs can feel astronomical, and there’s a complex web of reasons behind it. These factors make shipping more expensive for everyone, including Canadian online sellers like yourself.

Main Factors Contributing to High Shipping Costs

Shipping expenses have increased in recent years. Sadly, this issue is a pain for businesses and consumers. As mentioned earlier, several factors contribute to these high costs.

Here are the main factors contributing to expensive shipping fees:

Distance and Destination

Distance and destination are the main factors considered when calculating the shipping prices. Here’s how they impact your bottom line:

Generally, the farther your package needs to travel, the more expensive it will be to ship. Why? Carriers spend more fuel, time, and resources to send the packages over longer distances.

Additionally, many carriers like FedEx and UPS divide the world into zones based on distance. Shipping within a zone is usually cheaper than sending something across multiple zones.

Meanwhile, shipping internationally almost always has higher shipping costs than domestic shipping. The reasons for this increase are the following factors:

• Additional customs clearance process
  
  
• Potential import duties or taxes
  
  
• Increased complexity of dealing with different countries’ regulations
  

In addition, most less-developed countries also have less infrastructure. Poorly maintained roads, railways, and waterways can significantly slow down the movement of goods. This inefficiency requires more time and resources to complete deliveries, driving up costs.

Distance and destination often work together to influence cost. For example, you are sending a package from Toronto, Canada, to Sydney, Australia. This process involves a considerable distance spanning thousands of kilometres. The increased distance results in higher fuel consumption and longer carrier transit times.

Additionally, Australia’s geographic location is so far from Canada. This means the package must cross several international borders before arriving at its destination. These extra steps incur extra fees, resulting in elevated shipping costs.

Logistics

Logistics is vital in international shipping costs. It acts like the complex behind-the-scenes network that makes sure your package gets from one place to another. They plan, coordinate, and execute the movement of packages across borders. Here’s how logistics contribute to the international shipping costs:

Domestic shipping within a country follows established procedures. On the other hand, carriers need to deal with different elements, including:

• Customs regulations
  
  
• Tax laws
  
  
• Documentation requirements for every country.
  

These extra steps need more paperwork and specialized knowledge to make you follow the rules, adding to the costs.

Additionally, an international shipment can involve a handoff between many logistics providers, including:

• Trucking companies
  
  
• Freight forwarders
  
  
• Customs brokers
  
  
• Ocean liners
  
  
• Local postal services
  

Each player requires a margin of profit, adding to the overall cost.

Customs and Taxes

Customs and taxes add another layer to shipping costs. When packages cross borders, they get inspected to ensure they are legal. The governments often also charge customs duties, tariffs, and taxes.

These fees vary depending on the type and value of the items, as well as trade agreements between nations. Also, dealing with customs procedures requires paperwork and other resources, adding to expenses. As a result, it adds an unpredictable element to the shipping fees.

If you’re considering avoiding paying these charges, you better think twice. Failure to follow customs regulations can result in penalties and delays.

Fuel Shipping Price

Like filling your car, cargo ships need fuel. Since cargo ships are bigger than your average car, they need more fuel, which means they also need more fuel. Unfortunately, with the rising fuel costs, the shipping fees get steeper.

Shipping companies often pass the expenses to customers to make up for these costs. They can add fuel surcharges or increase freight rates, burdening small eCommerce businesses.

Security and Insurance

Keeping your products safe on their international voyage adds a cost layer. Unfortunately, enhanced security protocols can be an additional expense for shipping companies.

For example, if they want to add container inspections and cargo screening, they must hire people to supervise the procedure. As a result, these shipping providers will increase the shipping costs to cover their expenses.

Meanwhile, while this is optional, insurance is a safety net, but premiums rise with the value of your shipment. It’s a balancing act – security adds cost, but peace of mind for your product and customers is priceless.

Global Shipping Issues

Without us knowing, global shipping issues can directly impact shipping costs. Some of the problems that eCommerce businesses can experience are:

• Port congestion
  
  
• Vessel and shipping container shortage
  
  
• Global supply chain disruptions
  
  
• Natural disasters
  
  
• Labour strikes
  

Such challenges lead to delays, requiring more resources and pushing up costs. Think of a traffic jam – fewer lanes and more vehicles mean longer wait times and potentially higher fares. These issues cause a ripple effect, making it more expensive to get your products overseas.

How Can Small Businesses Reduce International Shipping Rates?

Shipping internationally can feel like a financial hurdle for small businesses, but there are strategies to gallop over those high costs! Here are some ways Canadian sellers can rein in shipping expenses:

Negotiate Rates With Shipping Companies

Negotiating can be challenging, especially for those who don’t know what to do. So, here’s your guide to negotiating better rates:

Before You Start:

1. Know Your Shipping Volume. You need to know how often you will ship and how many they are. Most shipping companies go for the quantity. So it’s easier for you to set better terms for your business.
   
   
2. Research the Market. You can easily compare quotes if you know the average market costs. It helps you set negotiation benchmarks and maximize your expenses.
   
   
3. Identify Your Needs. When discussing the rates, remember to mention your needs. With this, the carriers can provide you with the estimated costs. You can bring up your preferred delivery time and flexibility.
   

Negotiation Tips:

1. Be Professional. Show precise data and needs.
   
   
2. Highlight Your Value. Emphasize potential volume and longevity.
   
   
3. Leverage. Mention existing carriers for competitive rates.
   
   
4. Focus on Win-Win. Seek solutions that can benefit both parties.
   

Advanced Strategies:

1. Multi-Carrier Partnerships. Expand options for better rates.
   
   
2. Consider Freight Forwarders. Outsourcing may lead to cost savings.
   

Utilize Consolidation Services

Aside from negotiating carriers, Canadian sellers have another weapon in their arsenal: consolidation services. Let’s explore how these services can help you gallop over those expensive shipping costs.

Imagine multiple small packages from different Canadian sellers bound for the same international destination. Each package paid for high shipping prices. This is where consolidation comes in. These services act as shipping middlemen. What do they do? Simple. They collect packages from various businesses and combine them into a larger shipment.

Benefits for Canadian Sellers:

• Reduced Costs. Consolidated shipments are generally cheaper than multiple individual packages. Shipping companies often offer significant discounts for bulk shipments. In return, they pass these savings to you.
  
  
• Streamlined Logistics. Consolidation services handle the international shipping paperwork. They also deal with customs clearance for the consolidation shipment. This saves you time and ensures your packages meet all the necessary regulations.
  

Optimize Packaging and Dimensions

Every gram counts, and packaging affects the overseas shipping prices! Thus, always use lightweight packaging that is perfectly sized for your product. Ditch excess void fill and explore custom boxes to reduce wasted space. Remember, shipping companies also calculate the dimensions of the boxes. So, using packaging with the right fit can save you money.

Plus, sturdy packaging protects items from damage during transit. As a result, you can reduce the risk of returns and replacement costs.

Explore Alternative Transportation Modes

International shipping isn’t one-size-fits-all! Instead of relying solely on trucks, consider trains or ships for longer distances. These options offer lower costs per mile. Additionally, they can accommodate larger volumes, reducing the shipments needed.

While it may take longer for the packages to arrive, the savings in transportation costs can outweigh the wait time. The key is matching your product, budget, and delivery speed to find the most cost-effective international shipping route.

Take Advantage Of Technology and Automation

Did you know that technology can help you reduce shipping costs? If not, then it’s time to take advantage of it! Use online shipping tools to compare rates and print shipping labels. Consider investing in automation software to simplify order fulfillment and customs paperwork. These tech solutions save time, reduce errors, and unlock discounted shipping rates, making international sales smoother and more profitable.

Explore Government Incentives and Programs

Canadian sellers should recognize government resources designed to support international trade. Here’s a breakdown of how government programs and incentives can help you with overseas shipping costs:

• International Trade Programs. It is a global shipping program that the Canadian government offers to help businesses with sending products abroad. These programs give out financial aid, market research assistance, and trade missions. You can check out the Canada Trade Commissioner Service for more information.
  
  
• Export Development Canada (EDC). If you are a business wanting to increase your budget for operational expenses, this is something you can look into. This Crown corporation offers various opportunities to help your brand. They can provide financial support for marketing and transportation. Feel free to check their website or contact customer support to know what this program includes.
  

Consider Shipping Internationally With Stallion

If you want to partner with a trusted shipping provider, look no further than Stallion!

Stallion understands the unique needs of Canadian online sellers. Thus, they offer:

• Competitive rates
  
  
• Reliable service
  
  
• Seamless business shipping experience.
  

Don’t get lost in the labyrinth of international regulations and customs procedures. Stallion has the experience and expertise to handle the complexities of global shipping. So they can guarantee your products reach their destinations smoothly and efficiently.

Final Thoughts

International shipping is expensive! There are many reasons, like long distances, fuel costs, and country regulations. Special packaging and insurance add to the cost, too. But don’t worry! By understanding these factors, businesses can find ways to save money on international shipping. This is important because everyone wants to ship things worldwide for less money!

Don’t let international shipping costs prevent you from reaching a wider audience. Partner with Stallion and experience the difference! Visit our website or contact us today to learn more about our international shipping solutions and how we can help your Canadian business reach new heights!