- 2 July 2020
- Transport / Logistics Services
With postal rates into the USA set to soar by as much as 150% from this month, retailers, direct-to-consumer brands, marketplaces and marketplace sellers must take action now to protect their Cross Border e-commerce margins. This is because they will struggle to pass on their costs to online shoppers according to SEKO Logistics.
The Universal Postal Union (UPU) and the USA agreed that from July 1 the USA was able to set up its own postal rates. This was to eliminate economic distortions where it was cheaper to receive a parcel from China than it was domestically in the US. With the pandemic, online shopping has boomed along with cross-border e-commerce.
Brian Bourke, SEKO’s Chief Growth Officer says: “Cross Border e-commerce is one of the most resilient sources of income for retailers, etailers and marketplace sellers, and even more so in recent months with closures of bricks-and-mortar outlets to stem the coronavirus outbreak. But, savvy online shoppers know higher postal rates are coming and will vote with their plastic if sellers simply try to pass on these much higher costs.”
The one thing sellers should not do, Bourke says, is ignore the changes in the global postal market. “The retailers, etailers and marketplace sellers we’re working with see the potential to build customer lifetime value. Evidence shows online shoppers will pay more for faster delivery times, shipment visibility and peace of mind as long as it’s from brands they trust. They also know Cross Border e-commerce offers sustainable growth opportunities as consumers look for cheaper prices on their chosen purchases or source products they can’t find in their home markets from overseas. However, sellers that fail to find alternative and more cost-effective ways to ship their goods will see their margins start to dissipate.”