Simplifying Global Shipping for SMBs

As the world becomes “flatter” and globalization drives new opportunities for international commerce, how do small and medium-size businesses (SMBs) jump on the bandwagon?

The Internet allows any business to gather orders and process them across borders very easily at low cost. For SMBs in the U.S., currency fluctuations are working in their favor for overseas commerce. Such free-trade drivers as the North American Free Trade Agreement (NAFTA), the Central America Free Trade Agreement (CAFTA) and World Trade Organization (WTO) measures are making it easier for goods to flow around the globe — at least in theory.

The reality is that small business operators need to jump through complex hoops — especially in a post-9/11 world — to actually move their goods across borders, and back again the event of returns. Recognizing the opportunity and the challenge, UPS in early 2008 is debuting several new services to help SMBs join the Fortune 500 when it comes to expanded markets and international commerce.

I had the opportunity to moderate a sponsored podcast discussion on the global trade landscape for SMBs, and to learn more about the latest UPS solutions for expanding trade while reducing complexity and risk. Listen as global trade experts and UPS executives explore how (SMBs) can better market their goods internationally, deal with customs and border rules at increasing scale and with reusable automation, while further leveraging the Web for added efficiency.

UPS is helping to change the face of global shipping by being a market innovator with a solution called “UPS Paperless Invoice.” It uses UPS applications and the Internet to define commercial shipment invoice data for border clearance, eliminating the customer’s chore of manually applying three paper invoice copies to each shipment. UPS will also soon deliver UPS Returns in 98 countries so shippers can use digital technology and UPS solutions to prepare the proper return labels so goods can be easily returned back across borders when necessary.

Join Laurel Delaney, founder and president of GlobeTrade.com, and Stu Marcus and Scott Aubuchon, both directors of new product development at UPS, for this SMB globalization opportunity podcast.

Listen to the discussion (34:09 minutes).

Here are some excerpts:

The World Is Flat

Laurel Delaney: If you’re an American tourist and you’re vacationing in Paris, your dollar buys fewer euros right now. So, you’d probably end up spending (US)$7 for a cup of coffee or even $50 for a taxi ride. A weak dollar can be good for the U.S. economy, though, because it makes American exports cheaper.

Scott Aubuchon: International shipping is at an all-time high. The Internet is making it easier for SMBs to trade internationally. Many of the free-trade agreements have helped, as well. But there’s still a lot of complexity involved in shipping across borders, and that’s something that we at UPS are very interested in helping our customers deal with and overcome.

For anything that’s not a document or a letter moving internationally, a commercial invoice is required to go with that shipment, in order to define what is contained in the shipment. So, for example, if you were shipping a cotton shirt, you’d need to document what type of shirt it is, where it was made, and what the fabric is. That process can be fairly complex and somewhat daunting, especially to folks who don’t do a lot of international shipping.

The U.S. Customs Bureau used to be part of the Treasury Department. It’s now called “U.S. Customs and Border Protection,” and it’s part of the homeland security function. So even though there’s freer trade, the documentation required for trade security purposes is still very important, and may be more important than ever.

UPS Paperless Invoice … enables our customers to provide us with electronic data defining what’s in the international shipment — that would be the commercial invoice data — and provide that seamlessly and electronically, so that we can transmit it and use it for clearance on the other end. … From the customer’s perspective it really is completely paperless. They can take the data regarding the commodities they’re shipping and either apply it within, or connected to, their shipping system.

Then, when they prepare the shipment, they simply designate the commodities that are in the shipment, transmit that information with the shipment upload, and we will use that information at the destination to clear the shipment. The customer doesn’t need to print and apply any paper at all in that process. This helps by saving them time, money and paper.

One of the keys to dealing with duties, taxes and a proper treatment of shipments is, in fact, the documentation. So getting that commercial invoice data correct, and consistently applied to each shipment, will be a big help with that. … Because the data is moving electronically to its destination, it’s not susceptible to being marred or lost in transit, as a piece of paper might. It’s also helped them to get their shipments cleared more seamlessly. We’ve seen that for a couple of our customers — and we expect that the same will be the case for our customers who start using UPS Paperless Invoice in January.

Sending It Back

Dana Gardner: How do we deal with returns? We hear that for some 70 percent of international returns, there is no standard operating procedure. They’re just done on an ad hoc, exception-by-exception basis.

Stu Marcus: The research that we have done with our customers indicates that the most important reason customers want to have an efficient return process is for their own customer service. Exporting goods and shipping items globally is only one part of building your business. Offering customer service when things are wrong or customers need to replace items is really key to building customer loyalty and gaining additional business.

Customers know that, in the past, having items returned internationally was really a time-consuming and burdensome process. You have receivers who need to return items internationally, and they may not be familiar with shipping internationally. The shipper who sent it out really has a knowledge base in doing global commerce. Now, the receiver has these items and no way to efficiently get them back.

With UPS Returns, which we are expanding to 98 countries, UPS is going to be the first carrier to offer this type of solution to shippers. Now shippers can use the same UPS technology with which they export goods to prepare the return label and get it to their receiver to initiate the return process. A shipper can now prepare a label and a commercial invoice and have it e-mailed directly to the receiver. Where in the past you would only be able to fill out a manual label and put in the mail, now the receiver can get it immediately, and then use the label and the invoice to initiate the return process. … This is going to begin in January 2008.

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