UPS this week said it has incorporated a landed cost calculator to its shipping technology that e-commerce merchants can integrate into their online stores so customers see the import duties, taxes and fees upfront at checkout.
The new tool, UPS Global Checkout, aims to prevent consumers from being surprised by unpaid import fees collected upon delivery, which can sour the shopping experience and potentially cause a loss in brand loyalty. Global Checkout uses AI to assess items in the shopping cart and calculate the correct import duty, shipping and handling fees, and taxes at time of purchase.
Software applications that automatically calculate import fees before consumers complete cross-border orders have been around for about 15 years. Many companies, including Passport Shipping, Avalara and Zonos, provide retailers duty-cost calculators for their websites to provide import fee transparency during the checkout process. FedEx and DHL Express also offer similar capabilities, but UPS (NYSE: UPS) claims it is the only global logistics integrator to offer a guaranteed landed cost tool embedded in its parcel booking platform.
“If the cost isn’t accurate for some reason, we pay the difference,” spokesman Jim Mayer explained by email. “The guarantee protects both the seller and the buyer. For the seller, particularly a small business new to international sales, they don’t have to worry about miscalculating the duties and taxes and the financial risk of being responsible for errors. And for the buyer, there is no unpleasant surprise at delivery when our delivery driver has to collect any unpaid fees.”
Online sellers that use the UPS Worldship system to process packages for pickup and delivery will soon be able to add UPS Global Checkout to the payment section of their storefront with the help of a middleware interface. The tool is available in 43 origin countries for deliveries to more than 200 destinations worldwide.
Tools that calculate the door-to-door shipping cost are built to quickly adjust to changes in policy, tax law and duty rates.
“With UPS Global Checkout, we’re making international shopping around the world as easy as buying in-store,” said Kate Gutmann, president of international, health care and supply chain solutions at UPS, in a news release.
The tool fits with UPS’ larger strategy of providing more value to customers than simply moving packages from one point to another and helping small- and medium-size businesses access international markets, said Derek Lossing, an e-commerce logistics consultant and founder of Cirrus Global Advisors. The ultimate goal is to drive more parcel business.
Integrating into a retailer’s online experience creates a relationship that makes it easier to capture shipping business than if UPS simply competes on price with other carriers.
“UPS may not win a lot of those packages, but if a customer says, ‘Hey, we have a deep strategic partnership with UPS, and now I’m going to implement this technology on my international checkout, and I’m going to open up international markets,’ naturally, the packages are going to flow on UPS,” said Lossing.
UPS has recently introduced other tools that simplify cross-border e-commerce, including UPS Export Assure that helps create export documentation. UPS Paperless Invoice helps customers save time and paper, while increasing accuracy, by eliminating paper forms.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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