The Houthi attacks on commercial shipping in the Red Sea have forced many vessels to take the longer Cape of Good Hope route between East Asia and Europe. At the same time, low water levels in the Panama Canal have reduced transit capacity.

These disruptions come amid a broader trend of rising shipping costs. International shipping expense has increased over the past 18 months for many types of products, marking a departure from decades of declining inflation-adjusted costs. According to the Drewry World Container Index, a composite index of $5,319 per 40-foot container in late August is 274% more than the average pre-pandemic rate of $1,420 in 2019.

Amid these macro-level disruptions, customer expectations for faster deliveries and real-time tracking are higher than ever. Regulatory hurdles and compliance requirements add complexity to cross-border commerce, while relentless cost pressures push companies to seek greater efficiencies.

In the midst of these complications, bulk shipping and consolidation strategies are emerging as potential tools for businesses looking to simplify their international shipping.

Navigating International Shipping

Consolidation offers a strategic approach to addressing many of the challenges facing international shippers today. Cost reduction remains a primary advantage of bulk shipping. By consolidating multiple shipments, businesses can leverage economies of scale, resulting in lower per-item shipping costs. This is particularly beneficial for smaller merchants who might not have the volume to negotiate favorable rates on their own. 

Customs clearance, a significant pain point in international shipping, can also be streamlined through consolidation. Larger, consolidated shipments may receive priority processing at customs, potentially reducing delays and improving overall delivery times.

Bulk shipping services often include enhanced delivery confirmation and clearance options. As customer expectations evolve, there’s an increasing demand for delivery duties paid (DDP) solutions. These services ensure that all duties and taxes are paid upfront, providing a seamless, transparent experience for the end customer.

Bulk shipping can also simplify compliance with complex international regulations. Evolving shipping rules such as value-added tax (VAT) registration requirements and new e-commerce compliance programs can be challenging for individual merchants to navigate. Consolidation services often come with expertise in these areas, helping to ensure that shipments meet all necessary requirements, and avoid costly delays or penalties.

Another key benefit is the potential for improved inventory management. By taking advantage of a consolidator’s frequent shipments, merchants can maintain lower inventory levels without compromising their ability to fulfill orders quickly, reducing warehousing costs and improving cash flow.

Implementing Bulk Shipping

Selecting the right consolidation partner is crucial. Look for those with established networks and daily line hauls to major destinations. This ensures that your shipments can benefit from economies of scale without experiencing significant delays. The ability to piggyback on a consolidator’s volume allows even smaller merchants to enjoy the benefits of bulk shipping, without having to accumulate large quantities of inventory themselves.

Knowledge of global shipping regulations is another critical factor. The landscape of international shipping is constantly evolving, with new rules and requirements emerging regularly. According to a survey by Avalara, 82% of businesses worldwide say cross-border compliance complexity impacts their decision to sell into new markets. It’s therefore important to find a knowledgeable consolidation partner who can help de-risk your compliance, ensure that your shipments clear customs efficiently, and avoid costly mistakes.

One often overlooked aspect of international shipping is the impact of seemingly minor details. For instance, the use of terms like “antique” or “champagne” in product descriptions can have unexpected consequences, potentially affecting harmonized system (HS) classification codes and, thus, customs clearance. An experienced consolidator can help avoid these pitfalls, making sure your products are correctly classified and described.

Returns management has become increasingly critical in international e-commerce. According to InvespCRO, the average return rate for online purchases is 30%, three times higher than that for brick-and-mortar stores. Consolidators often provide sophisticated returns solutions, including local return addresses in destination countries and streamlined return material authorization (RMA) processes.

Looking ahead, the role of bulk shipping in international logistics is set to grow. With the global e-commerce market projected to reach $7.96 trillion by 2026, according to Shopify, the demand for efficient, cost-effective shipping will only increase. As businesses navigate an increasingly complex global trade environment, those who leverage the strategic advantages of bulk shipping will be better positioned to thrive in the international marketplace.

Helaine Rich is vice president of strategic sales and administration with ePost Global.