Shipping and Importing Overseas: Top 3 Problems and How to Solve Them

September 21, 2022

Top 3 Problems-trade related Incomlend

Shipping and receiving products across the world can be a headache.

Global importing and exporting can be incredibly rewarding for both retailers and distributors, but there are several obstacles to overcome. Before your products even leave your warehouse, you can get lost in a minefield of paperwork that includes logistics, taxes, customs, and other challenges.

In this article, we’ll cover three of the top problems when it comes to shipping and importing overseas — and how to fix them.

Keep reading to learn more.

1. Managing Logistics and Shipping Issues

A huge challenge for global importers is dealing with logistics shipping issues. It can often feel like certain problems are completely out of control. This is why it’s important to have a sturdy infrastructure set up so that shipping can be managed from several locations around the globe.

Although they always existed, shipping problems were shoved into the spotlight during the COVID-19 pandemic in 2020. This had a detrimental effect on trade around the world. Many countries closed their borders, which stopped the movement of goods between nations.

Not only did trade slow down, but existing orders and contracts were put on hold with no end. This led to severe shortages around the world for months at a time.

When there are disruptions in the global supply chain, it can cause a chain reaction of importing problems, including:

Solution:

On a global level, several things need to happen to prevent a supply chain disruption in the future. For one, transportation logjams need to be cleared up. These logjams are a result of many issues, like:

Dramatic rises in container freight rates have further complicated the situation.

Another critical issue that has led to shipping problems is recent labor shortages. This has also caused more delays, cost increases, and logistical challenges.

Both the public and private sectors need to invest in upgraded digital infrastructure that allows workers to work more efficiently. This can help them work remotely, perform tasks easier, and deal with pandemics and demographic shifts.

On a micro level, businesses can take advantage of different trade finance tools like supply chain financing. This allows importers to buy goods from overseas suppliers on credit and invoices that can be paid up to 120 days later, making the process faster and smoother for both parties.

2. Poor Communication

Communication is essential for all businesses, but dealing with other firms from around the world can be complicated — making it vital to the success of international shippers and importers.

Without it, it can lead to losses in profits and disgruntled customers.

Communication issues can stem from various issues, including:

To successfully move products around the world at a profit, these issues need to be taken seriously.

Solution:

The first step to having strong communication is to make sure that your business is fully aligned with all of your international partners. If even a single link in the chain isn’t on the same page, it can lead to products arriving late to the market.

Make sure to regularly communicate with everyone from procurement to suppliers to other logistical partners.

When it comes to transmitting sensitive information, make sure that your in-house and international software has high data security. This means it should have a 256-bit TLS data encryption. Other important security tools include:

Lastly, allowing your communication to be as transparent as possible will streamline your business’s communication. Allow your frontline employees to have access to data so that no bottlenecks are created.

This will eventually have a positive effect on your entire supply chain, leading to higher profits.

3. Delayed Payments By Buyers

Another export issue comes from buyers that don’t respect invoice maturity terms and delay payments. As the supply chain crisis continues to grow after the pandemic, many suppliers are being forced into longer payment terms from buyers.

This happens because both sides of the transaction are desperate to protect their money. The pandemic had a huge effect on cash flow all around the world.

Buyers start to use delayed payments as a strategy to get more leverage on suppliers. Although some places in the world are adding new regulatory requirements to combat this, it’s a problem that’s happening all over the world.

In the worst-case scenarios, some won’t pay suppliers at all. This could be a result of defective goods or any other part of the order not meeting the requirements of the buyer.

Solution:

A great solution to this problem is the use of invoice factoring. With invoice factoring, sellers can ship their goods and issue an invoice through a third party.

This allows the exporter to receive funds that the buyer owes ahead of schedule. They can get up to 90% of the invoice, even before it has been paid. The receiver, on the other hand, has up to 120 days to pay the full invoice.

By using a trusted third party to facilitate the trade, both sides are protected. Exporters can grow their businesses quickly by freeing up working capital and receiving money that they are owed quickly. In this way, money can be re-invested to pay the suppliers, employees, to finance the next production cycle or something else.

Get in Front of Any Problems Shipping and Importing Overseas
Those are among the top problems when it comes to shipping and importing overseas. By creating a strong foundation for your business and preparing ahead, you can get in front of these issues before they hurt you down the line.

If you deal with international shipping and are ready to take advantage of trade finance tools that can free up your working capital and ensure continuity in your supply chain, make sure to reach out to us today!