International shipping costs differ from country to country and carrier to carrier. Shipping costs also depend on the agreement between the buyers and the sellers, as to when, what you are shipping and what and where responsibilities for packages transition from seller to buyer in terms of:
- Type of transportation
- Insurance requirements
- Risk transfer
- Customs clearance
- Destination delivery
Agreements, termed Incoterms, include Cost, Insurance, and Freight (CIF) in which sellers assume responsibility for cost, insurance, and freight, while the risk of damage is transferred to buyers after products are onboarded. Popular countries that businesses want to ship to from the USA use CIF, including most of Europe, parts of Asia, Canada, and Mexico. Shipping to Australia involves using the Free on Board (FOB) method in which the seller delivers shipments to the ship and clears them for export. From that point, the buyer assumes all costs and risks.
For an overview of the cost to ship to different countries, you need to know the calculation method, which is usually CIF or FOB. With the CIF method, the Value-Added Tax (VAT), also called Goods and Services Tax (GST), is applied to the total of your shipment, plus shipping costs. With the FOB method, the VAT or GST is applied to the price of the goods shipped. Then, de minimis duty and tax, which refer to the threshold at which tax is added to the cost of your shipment are calculated. For example, if a country’s de minimis tax is $20, packages valued at or below $20 will be cleared for customs without paying duty and taxes. Additionally, each country maintains its own set of rules and tax regulations that come with fees and fines for select categories of products. Sellers that do not want to be surprised at the fees and fines for products in various countries should research the rules and regulations for that country before committing to shipping to that country. The cost of shipping internationally can also be affected by your carrier’s international rates. In short, international shipping costs are determined by variables that are specific to each country you want to ship to and will also differ from carrier to carrier.
You do not have to navigate the world of international shipping on your own. Phase V Fulfillment’s team of fulfillment experts is knowledgeable in all the ins and outs of international fulfillment and will handle all the details for your business. Contact us to discuss your international fulfillment needs.