As a business owner, have you ever sat down and wondered how much international shipping costs, and why those prices may vary across providers?
The truth is that these rates can vary based on a multitude of factors. Understanding how to calculate international shipping rates is thus crucial for any business engaged in global commerce, particularly if you find your shipping costs beginning to eat into your budget.
Whether you’re a small or medium-sized business looking to stretch a lean budget even further or a multinational corporation seeking to optimise your operational spending, getting the most value from your international shipping costs could play a significant role in your business’s overall success.
Gaining an accurate cost assessment thus ensures you can plan your logistics efficiently while offering competitive pricing to your buyers – enhancing customer satisfaction.
As a trusted logistics partner around the world, DHL Express offers businesses in Hong Kong comprehensive solutions to make international shipping as cost-effective and straightforward as possible. Read on to find out more about the key considerations when estimating international shipment costs.
Key factors in determining international shipping costs
1. Weight and dimensions
Parcel weight and dimensions play a fundamental role in determining shipping costs. Carriers often use both actual weight per kg and/or volumetric (dimensional) weight to calculate the charge, opting for whichever is greater.
Dimensional weight accounts for the density of a parcel by measuring the space it will take up during shipping and transport in relation to its actual weight. This makes it a crucial metric for large, lightweight items that may not have as high an actual weight but will take up more space in the transport vehicle or aircraft during shipping.
The formula for volumetric weight is {Length (cm) x Width (cm) x Height (cm)}/5000.
For instance, the volumetric weight of an object in a 5m x 5m x 5m box would be (500 x 500 x 500)/5000 = 25000.
Knowing this formula helps shippers better understand how package size impacts shipping costs, encouraging efficient packing and preparation practices to minimise shipping expenses. Having the right packaging could help reduce your shipment’s volumetric weight and thus avoid unnecessary shipping costs.
2. Exceptional activity and fuel surcharges
Shipping costs may also include additional fees such as exceptional activity and fuel surcharges, such as:
- Full Dangerous Goods surcharge: levied when shipping Dangerous Goods regulated in accordance with the IATA Dangerous Goods Regulations.
- Dry Ice UN1845 surcharge: levied when Dry Ice UN1845 is necessary for shipment, such as for diagnostic specimens.
- Remote Area Delivery surcharge: levied when shipping to a remote area that may have infrastructural or physical barriers to service completion.
- Elevated Risk surcharge: levied when shipping to areas with continuous state of war, civil unrest, or continuous threats from terrorism that puts DHL Express couriers at risk.
- Overweight/Oversize Piece surcharge: levied when an item is Overweight (exceeding 70 kg) or Oversized (exceeding 120 cm).
These surcharges are designed to cover extraordinary circumstances that affect shipping costs, ranging from fuel price volatility to complex delivery routes to security threats. DHL Express transparently includes these changes within its export and import services, ensuring businesses can easily plan for all potential expenses associated with international shipping.
3. Destination
The destination of a shipment plays a crucial role in cost calculation. International shipping rates can vary greatly depending on the target country's regulations, duties, tariffs, and customs fees.
Understanding these costs is vital, as they can significantly affect the final price of shipping or even product pricing. When shipping to countries with high duty or tariff rates, for instance, businesses need to decide if they will absorb those higher costs directly into product or shipping fees or pass the costs onto the customer.
Each option has its pros and cons, and businesses need to balance managing their bottom line with keeping customers satisfied and happy. As such, businesses are encouraged to utilize the MyGTS tool by DHL Express Global Trade Services to research destination-specific requirements to avoid unexpected charges, ensure compliance with local import rules, and maintain competitive pricing.
4. Optional services
Adding on optional services such as shipment insurance and special handling can enhance the international shipping experience but also add to the cost. While these services provide added security, convenience, or confidentiality for both businesses and consumers, they come with additional charges that can affect product pricing.
Businesses should assess their specific needs and customer expectations to determine which services provide the best value for both buyers and sellers, ensuring that their prices remain competitive overall.
Shipping options available in Hong Kong
International logistics and last-mile delivery providers such as DHL Express offer businesses in Hong Kong a variety of international shipping services to meet individual business needs. These include:
- DHL Express Worldwide): Offers an end of business day delivery service around the world.
- Time-definite shipping (e.g. DHL Express 9:00 / 10:30 / 12:00): Ideal for more urgent shipments with requirements of delivery before 9:00/ 10:30/ 12:00 on the next possible business day with a money-back guarantee.
- Optional services: Options for On Demand Delivery and other delivery solutions offer even greater flexibility in delivery, while maintaining predictable pricing to help businesses maintain their overheads.
Selecting the right shipping option involves balancing urgency with cost considerations.
Tips to reduce international shipping costs
1. Work with a dependable shipping partner
Partnering with a reliable provider like DHL Express can lead to significant savings. Benefits include access to discounted shipping rates, negotiated pricing, and a partnership that supports business growth and global expansion.
2. Use an integrated e-commerce platform
Integrating your e-commerce business with platforms like Shopify can streamline operations and access better international shipping rates.
3. Ensure proper packaging
Effective packaging reduces costs by minimising dimensional weight. Having a postage scale on hand to accurately weigh shipments can help you assess which delivery method works best for your business while preventing overcharges based on size versus actual weight.
