Cross-Border and the Middle Mile: How Supply Chain Technology Helps
Much has been said and written about optimizing the last mile, and with good reason, given it comprises the majority of delivery costs and directly impacts customer satisfaction. But a strong last-mile operation is made possible by a strong first- and middle-mile one. And in today’s e-commerce dominated world, cross-border shipping is itself a middle mile.
From a big-picture standpoint, consolidation in the origin country is how cross-border shippers minimize costs. Combining cargo allows shippers to leverage volume and scale, reducing freight spend and paperwork by sending goods across borders as a single conveyance. Once the goods reach their destination, they are deconsolidated for last-mile delivery. In effect, this means cross-border optimization can be handled the same way as with any middle-mile delivery in-country–with the help of supply chain technology.
Smarter shipping through data
While supply chain technology is often used chiefly for route optimization where moving goods is concerned, cross-border shipping demands predictive insights and capacity optimization just as much. Using analysis of historical data and knowledge of cargo flow and picking times, brands can gain a clearer picture of when they will reach critical shipping volumes, which helps with getting good rates from 3PLs and service providers.
Data captured from across the middle mile is also integral to capacity utilization and allocation on the other side of the border. Customer addresses and delivery dates and times; volumetric weight; cargo arrival and departure schedules; which warehouse goods are going to for the last mile, who is picking up which order on arrival–making all this data, and more, available on a single centralized system is the first step. Aside from enabling ease of tracking, this opens the door for machine learning to connect the dots for load allocation to delivery vehicles, ensuring their capacity is maximized.
Speedier compliance through digitalization
The regulatory environment is the other significant piece of the cross-border optimization puzzle. Much of customs clearance is still performed manually, taking weeks to complete and negatively impacting lead times. On the other hand, research has shown that digitalizing trade-related paperwork in the Asia Pacific region alone could cut export times by up to 44% and export costs by up to 31%.
According to recent studies, a mere 26% of companies have data interfaces established to facilitate communication with customs service providers. Over 60% still rely on outmoded channels such as email and phone for customs procedures. Taking this forward with increased digitalization and adoption of data exchange would not only reduce the effort required to clear customs in a timely manner, but eliminate the possibility of costly human error in the process. The end goal is to ensure all documentation is done by the time the goods arrive on the other side of the border.
Surveys have shown that 51% consider navigating customs compliance as the greatest challenge to global e-commerce, with cross-border tracking not far behind at 46%. As technology can accelerate the middle mile in any domestic network delivery, it can accelerate cross-border shipping by expediting customs clearance, while also helping to drive down costs and ensure customer satisfaction through greater control over goods movement on both sides of the border.