UPS has taken advantage of the confusion and uncertainty surrounding tariffs and other charges to introduce a landed cost calculator for online orders, which merchants can integrate into their check-out.
The integrator backs the new offering with a guarantee of accuracy.
It says its Global Checkout service gives accurate, up-to-date pricing by adjusting for policy changes, tax laws, duties, and tariffs “almost in real-time”, thereby eliminating “unpleasant surprises” for consumers, in the shape of additional charges.
The service covers shipping from 43 origin countries to more than 200 destinations worldwide.
“With UPS Global Checkout, we’re making international shopping around the world as easy as buying in-store,” said Kate Gutmann, EVP and president of international, healthcare and supply chain solutions at UPS.
“Online shoppers can now enjoy full transparency and peace of mind with no surprises, knowing what they pay at checkout is the total cost for a cross-border purchase. This, combined with our total UPS premium delivery experience, benefits our customers – the retailers – by helping to drive additional sales. Given trade shifts around the world, expanding growth opportunities in new markets can now be seamless.”
UPS pointed to a survey of 2,000 online shoppers in the US and the UK by commerce experience platform Nosto, which found that 41% of consumers were deterred from purchases on an international e-commerce site if the amount of duties and taxes was not “crystal clear” at check-out.
And it’s likely this number would have increased lately, in light of the flurry of tariff announcements, suspensions, and changes, which left merchants as well as consumers in doubt about final all-in costs of online purchases.
John Haber, chief strategy officer of Transportation Insight, noted that the offering entered the market in a very timely fashion – “although I’m not sure that was the entire plan, but it’s a very hot topic right now”, he commented. “It’s incredibly important when sellers are faced with tariffs that are not only very costly but also seem to change depending on what day it is and new rules instantaneously come into effect.”
Moreover, UPS appears to have stolen a march on FedEx and other rivals, he added.
Landed cost calculators are not new, of course, noted Cathy Morrow Roberson, founder and head analyst of Logistics Trends & Insights, adding that UPS acquired i-parcel in 2014, a platform which included fully-landed total prices. That year saw FedEx buy Bongo International, another platform offering online sellers a gamut of features, including duty and tax calculation, currency conversion, and international payment options.
None of these came with a guarantee, though, she noted, adding that this factor makes Global Checkout “a big deal for cross-border e-commerce”.
UPS has signalled that it would cover the difference in the event of an inaccuracy, to give peace of mind to seller and shopper.
The new offering clearly targets small and mid-sized sellers, who – unlike large shippers – lack the means and technology to employ sophisticated landed cost calculators.
“This is targeted to the SMB market,” Ms Roberson commented.
Mr Haber noted that not all large shippers had this functionality. He said: “A lot of large shippers are handcuffed on the technology side, but in general this is more targeted to the SMB market.”
While the initial drive aims to get merchants to integrate the service into their check-out through an API, UPS is aiming to tie them deeper into its portfolio. The integrator has signalled that it will release Global Checkout in its WorldShip shipping software by the end of this month.
“UPS wants to get its technology embedded with customers one hundred percent,” said Mr Haber, noting that the announcement of Global Checkout follows recent introductions of other tools to create export documentation and to generate and manage paperless invoices .
“It gives them data, and it creates stickiness,” he added.
