By Ron Healy - A strange version of pass-the-parcel takes place in international eCommerce.
The physical parcel moves from player to player. So does the information associated with it - although not always as successfully. Each organisation has its own reference number, its own system, its own data structures and its own particular view of what’s inside the box. Some manage detailed product data. Others manage a description, a value and a shipping label. Somewhere along the way, “Men’s 100% cotton knitted pullover, manufactured in Turkey” becomes “clothing” and eventually “gift”, if enough information is lost and somebody becomes sufficiently (un)creative.
When the music stops partway through (i.e. at the border), somebody is left holding the parcel without knowing what’s in it.
From inherited decisions to cross-border orchestration
The problem for logistics providers is that many important decisions have been made before they ever see the box.
Then the parcel enters the logistics network and those decisions become physical.
If the product description is inadequate, somebody must improve it. If the classification is wrong, the consignment may be delayed or reassessed. If the customer wasn’t told that import charges will be collected at the door, the carrier becomes the bearer of bad news. If information is missing, somebody must find it, while the parcel - and the customer - wait.
In other words, consignment data is becoming part of the consignment.
This raises a more interesting question than how to become better at repairing incomplete information downstream:
Why should the organisations with the greatest practical understanding of cross-border execution wait until after the transaction and then deal with the fallout?
Instead, why not contribute upstream? Moving upstream does not require a shipper or 3PL to become an eCommerce platform. It means connecting to the transaction early enough to improve the data that will determine what eventually happens to the parcel.
Customs authorities are also placing greater expectations on everyone. While customs may not expect the carrier to originate every piece of data for parcels crossing the border, they do expect accurate, timely and complete information – whoever creates it. This is evidenced by a wider global movement towards advance electronic data, product-level scrutiny and greater accountability for increasingly high volumes of low-value consignments.
The EU’s new €3 ‘flat rate (but not quite)’ duty and the suspension of duty-free de minimis by the United States are different responses to different priorities but both increase the significance of the information attached and/or related to individual parcels. The World Customs Organization’s cross-border eCommerce framework reflects the same emphasis on advance data, data quality and cooperation between supply-chain participants.
Fully landed cost as a logistics product
Fully landed cost has traditionally been treated as something the merchant or checkout provider should calculate. That makes superficial sense because the customer needs to see a price before paying and the checkout has the fullest view of the transaction data.
However, the checkout does not necessarily know how the order will be fulfilled, which carrier will be used, where the goods will actually leave from or whether the order will be split. It may not know what information the downstream carrier requires or which delivery-duty arrangements are available.
A logistics provider often does.
This creates an opportunity for shippers, 3PLs, 4PLs, carriers and logistics aggregators to upsell fully landed cost as part of their own merchant proposition. They do not have to develop tax, customs and classification capabilities internally. They can package those capabilities alongside fulfilment, shipping and delivery. Imagine a logistics provider offering:
The key product is remarkably easy for a merchant or customer to understand: Guaranteed delivery - no extra charges.
Customers do not particularly care which organisation calculated the import VAT, selected the customs treatment or paid the duty. They care that the price they paid is the real total and their parcel arrives without a ‘ransom demand’!
For the merchant, this removes one of the most uncomfortable uncertainties in international selling. For logistics providers, it creates a differentiated service beginning at checkout and continuing through to the doorstep.
Making this work requires an independently available and easily verifiable identifier that travels with the parcel from checkout to doorstep. This identifier would be added to a permissioned blockchain, allowing authorised stakeholders to verify the original checkout data. Instead of repeatedly copying selected information from system to system, the original transaction remains connected to the physical consignment. Each downstream stakeholder simply maps their own reference, created throughout the journey, to the independent reference. The merchant generates their order reference, the payment provider generates their payment reference, the warehouse generates their dispatch reference and each carrier generates a shipping reference. Customs will eventually issue their reference.
With an independent reference mapped from each and with a lookup capability available to stakeholders, nobody needs to abandon systems or references they already use. Independent mapping allows the transaction to be revalidated when the physical world takes over. At fulfilment, handover or customs presentation, the actual contents can be automatically compared with the original checkout. If they match, the existing calculation and evidence can be confirmed. If they do not, the customs, duty and tax information can be recalculated. This could even be done before the parcel begins its journey.
Since each reference is associated with the same underlying consignment identity, suitably authorised participants can use their own reference to lookup the parcel’s status any time. A QR code on the parcel validates the data record from a scanner, or an API call can do it automatically. Ultimately, every authorised stakeholder can view the original data associated with any parcel they will be involved with delivering - all the way from checkout to doorstep.
Rehabilitating DAP for eCommerce
The same connection creates another opportunity for consignments sold under DAP shipping. DAP has a bad rap, mostly because it’s been the source of many painful emails, calls and text messages where consumers are told they must pay tax and duties (and a handling fee on top) to receive the product they thought they had already paid for. Or equally painful for merchants as consumers refused delivery and they lost not only the sale but the shipping and the reverse logistics.
With ePAL’s recent DAP-to-DDP innovation, a merchant, shipper, 3PL or other participant can use its own mapped reference - or simply scan a QR code - to trigger a request to the customer before collection or while the parcel is travelling towards the border. The outstanding landed cost is calculated and the customer given the opportunity to pay before the consignment reaches customs.
Where timing, jurisdiction and carrier processes allow it, the consignment can then be converted from DAP to DDP treatment before reaching the border.
Where the customer declines, this can be captured, minimising doorstep refusals for “surprise charges”.
Today, that payment request often begins when the parcel is already stopped at the border. Moving it earlier allows the problem to be resolved while the parcel is still moving… or even before it even leaves the warehouse.
The new control point in cross-border eCommerce
There is a backstage layer within international logistics that most people never see. A parcel enters the network through one stakeholder while transport, clearance and final delivery are performed by others. The same digital identity and orchestration capability becomes more valuable each time the parcel passes between providers.
Aggregators and orchestration platforms already allow shippers, carriers and other providers to sell, buy and coordinate capacity between themselves. These platforms already coordinate parcel transport. The opportunity is to coordinate the data and decisions travelling with it.
If a parcel has a persistent digital identity, handing it off it to another carrier doesn’t mean rebuilding the data. The new carrier simply retrieves the original data associated with the transaction, maps its own reference to the same identity and add its subsequent events to the chain.
The aggregator therefore becomes more than a marketplace for transport capacity. It becomes a control point connecting capacity, consignment data, compliance status and commercial decisions.
There are obvious operational benefits. Better data should mean fewer customs holds, fewer information requests, less manual rekeying and fewer parcels waiting for somebody to decide who should pay. Revalidation can identify discrepancies before customs does. Earlier collection of duties and taxes can reduce refusals and returns.
The commercial benefit may be larger.
A logistics relationship traditionally begins after the sale. The merchant wins the customer and decides how the transaction will work. The logistics provider executes what it receives. Moving upstream changes that relationship. The provider becomes part of how the merchant sells, not simply how it ships.
Conclusion
Connecting checkout to doorstep allows post-checkout providers to influence the transaction before it becomes a physical problem. Fully landed cost becomes an offer to merchants. “Guaranteed delivery - no extra charges” becomes a product rather than an aspiration. Traceability, revalidation and intervention make that product more credible and the resulting merchant relationship more valuable and much harder to replace.
Pass-the-parcel will continue. The opportunity is to make sure that when the parcel passes from one participant to another, its identity, information and history travel with it.
Instead of inheriting somebody else’s decisions and repairing them downstream, logistics providers take advantage of ePAL Global’s orchestration layer to help make better decisions upstream – right from the checkout.
ABOUT OUR AUTHOR:
Ron Healy is Co-founder and Head of Product at ePAL Global, a cross-border e-commerce technology company focused on simplifying tax, customs, duties and compliance for international merchants. An experienced product and innovation leader, Ron has worked across startups, large enterprises, the public sector and academia, specializing in turning complex regulatory and operational challenges into practical digital solutions. At ePAL Global, he leads product strategy and innovation, with a particular focus on making cross-border e-commerce simpler, more transparent and cost-effective for merchants.
By continuing to use the site, you agree to the use of cookies. more information
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.
