Episode 4: Shipping Insights with James Peacock of inXpress

On our podcast today we play host to James Peacock, president of the Arizona branch of inXpress, the international shipping guru that has saved both Grant and myself tons of money shipping overseas. What makes his website great is the fact that it requires no extra fees. You only pay when you ship, and the discounts you receive from inXpress can be combined with your existing discounts from USPS and UPS.

James offers up some insightful tidbits of business information that can help you conquer the biggest challenge of e-commerce: Shipping! “People use our account as a barometer to see what kind of deals you’ll be getting,” James says as he explains the price of goods both domestically and abroad. “Every small to mid-size company are all receiving a discount…the problem is that, because international is the smallest amount of their shipping volume, the discount equals the volume. So if you have low volume, you have low discounts. We’re saving people over 40% [internationally] on top of their discounts from USPS.”

Beyond telling you how to save money, James also shares his opinion on:

  • The cost benefits of air shipping over sea shipping and vice-versa
  • The pros and cons of purchasing from overseas vendors, including China, Canada, and Europe
  • The meaning of “all-in pricing” when it comes to security, fees, and taxes involved with importing and exporting abroad
  • How you can save money on your logistics by shopping for smart shippers

To learn more about James and his work with inXpress, tune in today and visit his website at www.intlshippingrates.com. You can also reach him directly by phone at 480-405-6390 or online at james.peacock@inxpress.com.

Don’t forget to leave us a review on iTunes and sign up for our newsletter at www.ecomcrew.com if you haven’t already. Enjoy the show!

Full Podcast Audio Transcription

Intro:    Welcome to the Ecom Crew podcast with your hosts, Mike Jackness and Grant Yuan.  Here you will learn the lessons, tips, and tricks that these ecommerce pros have learned over their years running and growing their very own seven-figure ecommerce businesses.  Each week, we dig into the ins and out of ecommerce, the truth about affiliate marketing, how to build your own brand and sell on Amazon, and how we’ve stumbled and then quickly rose to success.  The world of ecommerce is changing rapidly, and here you’ll find the trusted resources you need to take your business to the next level.  All right, enough of the fluff.  Let’s get over to your hosts, Mike Jackness and Grant Yuan.

Mike:   All right, I’m proud to bring on James Peacock with inXpress.  Just a quick overview of how you can get ahold of James: you can reach out to him at intlshippingrates.com or you can give him a call at 480-405-6390 or james.peacock.inxpress.com.  James is the president of the Arizona franchise out there and we’ve been working with him now for a little while.  He’s helped us tremendously in saving on some international shipping rates.  They’re an international consolidator, which we’ve been talking a lot about on the podcast so we thought it would be a great fit to bring him on today.  And with that, I want to introduce James and let him tell you a little bit about his company.

James:  Great, Mike, thanks.

Mike:   Yeah.

James:  My name is James Peacock.  I’m the president of inXpress in Arizona, and inXpress essentially is a global sales partner for DHL Express.  And what we do is we use the group purchase power, you know, that focused on small to mid-size companies to reduce their international shipping costs.  So, you know, keeping it very simple, how this thing works is out system ties to DHL.  We request an account on behalf of the company and what DHL does, they create an account in that company’s names.  It belongs to them.  So when they create that account, they create it under our umbrella, which gives them access to our discounts.  And that’s key for them because that group’s now the fifth largest DHL customer and  the discounts they receive are better than the post office part of the mail

But, you know, we’ve been partnered with DHL for several years now.  We do this for DHL in the States and in about 14 other countries.  And I guess our main headquarters is in the UK.  Our target market is really the SMB market and that’s our main focus.

Mike:   Gotcha.  And you guys also do LTL, which is less-than-truckload stuff domestically as well.  Is that correct?

James:  We do, yeah.  We actually have applied that same concept to the group purchase power to leverage, you know, deeper discounts with all nationwide carriers, [inaudible 02:48], you name it.  And I believe we go roughly about, as a group, $46 to $50 million in LTL handling.  So the discount that the small businesses receive is pretty substantial.

Mike:   Yeah, and we do a lot of LTL ourselves, bringing, you know, inventory and stock.  Obviously when we own Treadmill.com, which a lot of the listeners know that we owned at one time, we were doing a lot of shipping to customers and, you know, LTL’s kind of the forgotten piece of the puzzle that a lot of ecommerce stores don’t think about because they just use whatever shipping company, you know, their vendor uses to ship stuff to them.  And what I’ve found is that by using a consolidator, we can typically save anywhere from, you know, 25% to 50% on our inbound shipping rates using a consolidator.  I mean not every manufacturer does a lot of LTL and gets great rates, so it’s certainly a way for people to save money domestically, just getting their product into the door for ecommerce.

But the piece that we were going to kind of focus on today is the international piece and I’ll kind of bring in Grant here because he’s been doing a lot of international business now with CuttingBoard.com and that’s actually how he got involved with inXpress.  The savings have been pretty substantial shipping into Canada and Europe.  You maybe want to kind of hit on that a little bit real quick, Grant?

Grant:  Yeah.  So with CuttingBoard.com we have a few pretty popular items that just are high in demand and we get a fair amount of people from Canada, from Norway, Europe, Australia, South Africa, even Russia.  And one of the biggest issues that we have is that with our normal shipping carriers like UPS and FedEx, one, the rates are generally prohibitive, and two, there’s very, very high brokerage fees using those and anybody knows that you’ve probably been burned two or three times by using UPS or FedEx by the time you stop using them for international.

Unless you’re shipping like a letter or just a very small parcel, it’s really not worth it and that’s why a lot of people end up going USPS.  But there’s also a lot of kind of inherent issues with USPS while they don’t actually have full control of the parcel all the way to the last mile.  It gets handed off to the post of the other country.  So I mean you’re sometimes relying on the other country to really finish and do the last mile and, you know, you’ve got hit or miss really depending on who you go for.

So I came across James and inXpress while just randomly Googling around looking for, you know, an international consolidator.  And it’s helped us out because we’ve got an ability to really have almost a very known rate for how much it’s going to cost to go from international from here in Seattle to different provinces in Canada, to Australia, to Japan, and it’s all within a good ballpark so I’m able to do shipping rules and shipping logic and BigCommerce because I can say, “Hey, you know, if you’ve got this shipment, I can charge you X amount for this country or that region and I know I’m not going to be losing my shirt on shipping.”  And I know with Shopify, I think inXpress even has a plugin for that.  Is that right, James?

James:  Yeah.  We do.

Mike:   Yeah, so if you’re on Shopify, you know, that’s even better.  So yeah, maybe you can tell us how that works on Shopify, James.  Is it a real-time plugin or whatnot?

James:  Yeah, it is.  So in the app store – well, actually, we’re now integrated with about 10 different shopping carts and, you know, some of the main ones.  But, you know, you can see those at inXpress Apps.  And then, of course, inXpress is spelled without the “E” in “express.”  But yeah, so the Shopify plugin works really smooth.  You go into the app store and just download it.  All that app does is it presents your discounted DHL rates at checkout to the overseas consumer.  The merchants say that they see about 30% higher conversion for the overseas consumer just because they’re able to offer this DHL discounted rate.  And we’re not suggesting, you know, that you remove any of the post office there because, you know, you have different types of buyers, as you know, in ecommerce and you want to be able to accommodate all kinds of buyers that are either price-sensitive or they want to make sure that they get the product.

So the apps that we created were designed specifically not to replace any ecommerce business but just to kind of add some depth and breadth to their company and obviously, you know, offering DHL which is, you know, the largest international carrier on the planet.  You know, and their transit days are just, you know, unheard of.  You have one day to transit.  You’ve got two days to Europe, two days to Australia and Japan.  Middle East is around three days and stuff like that.  So Africa’s at four.  So when you have those overseas consumers coming in in these platforms of Shopify, Magento, or ecommerce [inaudible 08:04], you know, that transit day and the DHL pricing really helps the, you know, ecommerce person convert a lot more of those overseas consumers.

Mike:   And is the shipping time that you guys quote guaranteed or are they kind of arranged?

James:  They’re not.  Yeah, no they’re not guaranteed.  How DHL operates is – you know, because FedEx – there’s no real international guarantee because you’re dealing with customs but assuming that there’s no problem at customs, for instance, folks that ship out to Europe or Australia on a Friday, when they came in Monday, assuming there was no issues with customs, those packages would’ve already been delivered when we came in to track it to the consumer.  But yeah, no customs is interesting because every country has its own kind of idiosyncrasies and the good news – and this is kind of the advantage with DHL – is that whenever you ship with DHL, it never leaves their network.

So if, you know, it’s picked up here in the States and it was going to Zimbabwe, there is a DHL employee on a DHL system that is communicating with the folks, you know, the DHL employees here in the States.  They’re sending, you know, the manifest over prior to planning and taking off.  So [inaudible 09:28] service.  They start the clearing process before the wheels are even off the ground.  So with the other competitors or even the post office, they hand it off to a third party vendor so there’s a breakdown in communication there.

Mike:   Gotcha.  And before we get too far along, I brought up the inXpress Apps page here just to run down the different carts here so people that are listening to the podcast have the benefit of knowing which product you guys tightly integrate with.  So we have Shopify, Magento, Zen Cart, WooCommerce, LS commerce, OpenCart, PrestaShop, and it looks like coming soon, we have X-Cart, 3dCart, and Beluga on here.  Does that sound about right to you?

James:  Yeah, X-Cart and Beluga are right around the corner.  We’re actually testing those now and we have a couple people that are actually using them.  So yeah, those are really soon.

Mike:   Cool, and any plans on BigCommerce?

James:  You know, it’s interesting.  We’ve reached out to BigCommerce of a few different occasions and the way that their API is built, they don’t give access to that part of their API.  And so yeah, we’re still stuck in limbo on BigCommerce.  We’ve been after them for about two years.

Mike:   Yeah, unfortunately we hear this exact thing a lot.  I’m not sure what BigCommerce is thinking sometimes when they make some of these API calls like inaccessible but it comes up in a lot of conversation unfortunately and as someone who’s on BigCommerce, I advocate for them to make some changes here as soon as possible.  But you can’t reinvent the wheel I guess.

So you were talking about some of the conversion upside with the rates displayed within the cart.  Do you have any examples of savings off the top of your head maybe over UPS or FedEx where you guys compare international shipments?

James:  Yeah, absolutely.  You know, I mean the order of magnitude is so deep and I mean the difference is so dramatic.  When looking at UPS or FedEx, every small to mid-size company, they’re all receiving a discount.  And they probably have a good discount for the amount of shipping that they do internationally.  The problem is that because international is the smallest amount of their shipping volume, your discounts equal the volume so if you have lower volume, you have lower discounts.  And so, typically, the average that we’re saving people is about 40% off of their already discounted rates with FedEx and UPS.  And in a lot of cases, you know, it’s been 50%.  You know, here’s kind of a good gauge.  If you think about, you know, the post office Priority Mail and what those rates are, and then you take a look at that rate and then look at a FedEx or UPS rate for a similar country and weight, that’s a really good comparison because the discounts that they get from us would be deeper than Priority Mail.  So I mean it’s substantial.  And the biggest problem we had originally was convincing people that it wasn’t some type of a scam.

Mike:   Right?  Yeah, I could definitely see that because I mean if you’re talking about 50% less – plus, I think, even more importantly, you know, it’s kind of something that I, again, think people don’t think about or take for granted is the fee that the customer’s going to pay when it ends up on the other end.  You know, without having a brokerage fee – which, you know, we were just shipping some stuff up to Canada.  We talked about this even before we recorded the podcast.  I mean we shipped up like a $70 box of products that was over four pounds so we couldn’t use First Class and, you know, the customer got like a $50 customs brokerage fee, all-inclusive fee, and they were like, “We’re not paying it.  We’re going to send it back.”  And then, of course, we pay return shipping to get it back to us so it’s, you know, another fee that we’re eating and the customer’s mad if we, you know, deduct that off of their refund and it’s just, you know, bad news all around.

So can you maybe talk just – you know, Grant mentioned it earlier.  I think you brought it up as well.  But just talk specifically again about, you know, the details of how the customer on the customer is not paying that brokerage fee.

James:  Yeah, no good question.  Yeah, for the Canada consumers, if you’re shipping ground with UPS or FedEx Ground to Canada, the shipper doesn’t realize that there is an additional cost to clear those goods at customs in Canada.  And those fees, you know, they can range from $35 to we’ve ever heard up to $80 to $90 for the brokerage fee and depending on what the item is, you know, that varies drastically.  So when you’re using DHL, the brokerage fee, because it’s a DHL employee on the other side dealing with it, it’s baked into the cost and there is no brokerage fee to the consumer.  Now there is always going to be a duties and tax.

I mean you’re not going to get away from that.  I mean it’s just like how we’re paying taxes here in the US. You know, every country is going to take a duty or tax, and sometimes they don’t.  You know free trade to Australia.  If it’s under $1,000, it’s going to fly right through.  But for the consumer, that’s fairly educated or that has ever bought something from the US, they realize that that’s going to be the case.  When they get the sticker shock is when they’re hit with that additional, like you’re saying, $50 charge that’s a brokerage fee just to clear the item on top of whatever the duties and tax was.

Grant:  So and just to help out our visitors a little bit, for people that aren’t very versed on international shipping, can you explain what the actual fee is that people are paying for when you refer to a brokerage fee?  And then also if you can kind of break down what exactly is a typical duties and customs fee to pay for somebody.  Let’s say you’re a customer in Canada?

James:  Yeah, no that’s a great question.  Yeah, everyone wants to kind of know, “Okay, what’s the averages?”  So basically the duties and the tax: a duty is a percentage of the value of the item.  So let’s say that you say the item is $100 and you put that on the [inaudible 15:42] when you send it out.  So the customs broker, which is – you know, so you have two.  You have a customs broker and a customs agent. And you can think of it as if DHL’s the customs broker; the Canadian government is the agent.  So it’s like a judge and the attorney.  So the judge is basically Canada, the agent, and then the attorney is going to be DHL, the broker.  So, you know, they have their own language.

So how they get charged – so duty is going to be a percentage of the value of the item, and every item has a different percentage to it.  So let’s say if you were to ship something into the United States – we manufacture a lot of ball bearings – and this is actually true – if China wanted to ship a bunch of ball bearings to us, the US government imposes a very high duties and tax, like a 50%.  So what it does, maybe China can make it cheaper than we can, however, the government wants to protect that industry within the US.

They assess a higher duty and tax to it so that it’s no longer economically feasible for them to bring in those goods.  And every country has their own little ecosystem that they’re trying to protect so it varies.  Every single item, whether it be a pencil or, you know, a VCR is going to have a different percentage and it’s going to be different for every single country.  But typically, I mean I’ll give you an example.  I mean Australia’s really easy: $1,000.  [Inaudible 17:12] Europe seems to be up to 20%, 13% to 20%.  And then Canada’s really all over the board.  You have the [inaudible 17:22] agreement and, you know, it can be 8% of the value and even higher depending on what the item is.

So that’s the duty, and then the tax on it is a percentage of – and I don’t know how much detail I should go in here but how you figure the tax is that you take the shipping cost plus the duty and any insurance and then you divide that by the tax percentage and that gives you your tax total.  So every item is going to have a different duty and a tax, and how they identify those is by what’s called a Schedule B number or a harmonized tariff code and all that is is just a universal number for any particular item.

Grant:  Yeah, I’m familiar with the harmonization code because I just did some importing and downloading that giant PDF and like scrolling through the thousands of code in there trying to figure out where my Cutting Boards lie and everything, that was an experience in kind of playing around with bureaucracy of the ultimate level.  But for people that are, you know, like shipping one time or, you know, a few packages out, do you think it’s really important that they knew the exact harmonization code, let’s say if a package is under $100?  Or can they just get by just using, let’s say DHL or, you know, USPS and just kind of testing their luck or do you not recommend that?

James:  Yeah, so I can’t speak to the post office but what I can tell you about DHL is that if you don’t have a harmonized code or a Schedule B number, as long as you have a good description of the item that you’re shipping, DHL will fill that in for you.

Grant:  That’s very neat.

James:  Yeah.  Yeah.  You know, there’s also with the US – since it’s online, you can actually go look them up but, you know, for someone that’s not doing it very often, my suggestion is just make sure that the description is detailed enough so that DHL can find it for you.

Grant:  Okay.  And also, for people that are shipping international, what’s the paper requirements involved?  I know a lot of people get pretty scared and they go, “Oh, you know, I’ve heard you have to fill in all these forms,” and now you’ve talked about Schedule B and harmonization codes, but in reality I mean what is actually involved in the international shipping, like what papers do you actually show?

James:  Yeah, that’s a great question.  Everyone at inXpress is a certified international specialist and frankly, you know, DHL is the one who trains us.  So I guess the major items that you need always – so the two things – it’s obviously going to be the shipping label.  And the second thing that you’re always going to need with international shipping is going to be a commercial invoice.  The only time you do not need a commercial invoice is if you’re shipping documents.  Now if it goes into, you know, a letter envelope and you have, you know, a piece of paper in there but you also included a CD, then that is no longer just a document.  Now that particular shipment needs a commercial invoice.  And on the commercial invoice – and depending on how you create your labels, almost all shipping software out there will help you generate the commercial invoice and the only thing that you need to be aware of on the commercial invoice is some very basic facts.

You’re going to put the description of the item that you’re shipping, the country of origin (where it was manufactured), and then you put the number of units.  So if you’re shipping ten pencils, you put 10 and then you’re going to list the unit price.  You know, what is the unit price per pencil?  And then you put a total.  So that’s really all that you need.  You know, there’s a couple other things as far as if you’re shipping samples where, you know, you want to make sure you say, “This is not for resale.  This is a sample.”  But shipping label and commercial invoice and the commercial invoice just need some basic stuff which is, you know, again, just a description of the goods, country that it was manufactured, how many units that you’re shipping in that particular shipment and then the cost per unit.  And that’s it.

Grant:  Yeah.  When I first started doing international shipping, I often would do my commercial invoices by hand and I just found out that was just such a brutal thing and I finally realized that ShipStation and a lot of the other shipping providers really did just do, like you said, they print the commercial invoice and I mean I use like a zebra printer and it just prints out four different copies and so I just use the clear shipping pocket on the outside of the box and I just put, you know, all my shipping labels and then my invoices in there and then it’s all done.  So for me, it’s turned into something that I used to have to go and kind of grueling like do everything by hand but now I just don’t even really think about it too much.  I would say the only thing that really holds up my day is the fact that BigCommerce and DHL don’t integrate very well together.

James:  Yeah.

Grant:  You’re working on that, right, James?

James:  We are.  We are.  We are.  You know, and that was a really good point regarding, you know, where to put the commercial invoice and how many to print off.  You know, for the commercial invoice, you need two copies with DHL.  One of the copies, you’re going to – and both those copies need to have an original signature on it so you sign both, you fold one in half, you put it, you know, in the plastic sleeve underneath the [air window? 22:50] for the label.  And the other one, when the DHL driver comes to pick up, you just give him a copy of it as well.

Grant:  Great.  Yeah.  Very neat.

Mike:   And James, do you guys integrate with ShipStation?

James:  We do actually.  We’re a fully integrated partner with ShipStation and recently with [inaudible 23:07] as well.  So those two shipping softwares, we’re fully integrated with both of those.

Mike:   Excellent, so I mean even though you can’t get the real-time shipping rates with BigCommerce, at least if you’re using ShipStation, when the order pulls into that, then the process is pretty streamlined from there.

James:  Absolutely.  Yeah, absolutely.

Mike:   Excellent. Cool.  All right, so we’ve been kind of talking about outbound shipping here for the first few minutes, shipping a package to a customer.  Maybe we can shift gears a little bit and talk about inbound shipping.  We talked about inbound shipping with LTL but, you know, Grant and I have been talking, or at least alluding to on this podcast to this point, that we’ve been working on some of our own white label products and sourcing stuff from China.  Can you talk a little bit, James, about the process of importing from a Chinese manufacturer, say in Shenzhen or something like that?

James:  You bet.  Yeah, you bet.  You know, and China is a tough one because – okay, so from an importing standpoint, which DHL specifically, you would get two accounts numbers.  You’d get an export account and you’ve get an import account and, you know, through inXpress, you would also get a discount from the end of the country as well.  And China is a very heavily travelled lane.  Now with that said, importing in from China whether you’re going to go by air or sea, depending on the manufacturer that you’re dealing with or the vendor that you’re dealing with over in China, what some folks do is that they open an account with us and they use it as a barometer to see if they’re going to get a good deal, you know, with the Chinese vendor.  And the reason why I say that is because China is a major exporter and again, as I said earlier, you get discounts based on volume.

So because China’s doing so much exporting, you, at times, can get a better discount from the Chinese vendor or manufacturer than what you could actually get through us on the import side.  And the discount is a very heavy discount out of China but, you know, it’s always good to do both, get the price of your goods without the shipping and then with the shipping and then price that out with one of the domestic carriers.  And if you’re bringing in via ocean or air cargo or just the small parcel pieces, it’s definitely beneficial just to kind of check those quotes to make sure that you’re getting the best deal.

Grant:  And I’ll add in a little bit to that too just because I’ve been doing a lot of importing from China recently, especially on getting samples and whatnot and I’ve got production on the way in a number of different locations.  But one of the really good things about having an import account is essentially that it really establishes you as somebody that knows what they’re doing or at least has some kind of idea of how things kind of run over there.

And the main ways that China ships to the US is that they’ve got DHL, you’ve got FedEx, ePacket, EMS, and UPS.  So in the order of, generally, the most affordable to most expensive in my experience, even with what James has said, depending on your supplier shipping it or you importing it, DHL normally is the cheapest and then EMS tends to come in after that.  EMS can take a while.  ePacket is kind of like their version of First Class, and if you ever buy stuff on eBay or Amazon at super cheap rates, ePacket is actually cheaper to go from China to the US than it is domestic within the US, which should blow your mind out there.  And then there’s FedEx and UPS, which, like I said, you know, they’re always available but they generally don’t have quite the volume to China as the other carriers do in my – and I think I can be correct saying that, right, James?  UPS and FedEx are probably not the biggest movers in China?

James:  Definitely not.  No, DHL is the number one courier there.

Grant:  Okay.

Mike:   I mean it’s almost to the point, Grant, where – because we’ve been using UPS for importing samples and there’s a couple manufacturers that don’t even have UPS pickup and they don’t even want to deal with it.

James:  Wow.

Mike:   So that just shows you like how small they are over there.

James:  Yeah, as far as shipping samples, I mean that’s – you know, having an import account, like Grant was saying, is a key point because a lot of times what the Chinese manufacturer says, “Hey, we’ll ship you the sample for free.  You just pay for the shipping cost.”  And most of our customers, that’s how they actually, you know, bring in their samples because they’re smaller in size and, you know, it’s [inaudible 27:51].

Mike:   No, I definitely agree.  I mean I actually have gotten to the point, you know, now where I insist on not paying for a sample and doing just what you were saying there, James.  I mean at first we didn’t really know any better and the manufacturer would say, “Oh, you know, it’s $20, $50, $100, whatever for a sample plus the shipping,” and we just paid it and now that we’ve kind of got seasoned with this, I mean you can actually push back and just say like, “I’m not paying for sample.  I mean period.”  And I haven’t had one person balk and say, you know, “If you don’t pay for it, we’re not sending it,” because they know that the potential for, you know, a mid-five-figure order is looming in the distance and you’re not going to be willing to pay, you know, exorbitant shipping from China to the US if you’re not interested in actually buying the product.

Grant:  Okay, so now that we’ve talked a little bit about import and in terms of kind of small parcel, let’s talk about a little bit on a larger import like air cargo.  So just for everyone listening out there, there’s really two ways of getting things in to America.  Again, I’m just going to use China because I mean that’s just really what it comes down to.  With Canada, I mean you’re just going to go LTL unless you really, absolutely have to have it now, and then you’ll take it by air.  But assuming that you’re getting stuff from China, you know, oceanic and then air is really your two options.  And ocean will take anywhere from 30 to 70 days depending on, you know, the route it’s taking or the lane, and as long as the dock workers aren’t, you know, trying to kill your day.  And with oceanic, you can either get the full container or you can get LCL, which is essentially LTL, less-than-cargo load.  And then for air transport, again, you’re going to be going with all the same options that we mentioned before.  And so DHL does do freight.  UPS, FedEx, they do freight.  So maybe handing it off to you, James, can you kind of go over what air cargo is like in terms of working with inXpress?

James:  Yeah.  On the air freight side, you know, there’s a couple things that you have to kind of think about when you think about air freight because when you run air freight, every airline, no matter who you use, is going to have a minimum charge.  And that minimum charge is going to be between $250 and $350 as a minimum.  So that’s their base, so they start from there.  And what you have to tack on is you have to think about what it’s going to cost to add the pickup and then the transport, which is the minimum, you know, and then you’re paying a customs broker like we talked about there in Canada.  That is also an additional charge that’s on top of that and then there’s some security issues as it comes into the country and then once it lands, then you have to factor in kind of what the cost is for them to take it from the airport to now your door.

Air cargo is a great solution when you’re talking about anything over 200 to 250 pounds, you know, and operating with, you know, DHL and at times – DHL may not always be the best fit.  You know, we have contracts with other carriers that are better with the air cargo than with DHL, but the difference is if you think about it this way: so because the discounts you get through us are so deep, the threshold of that $250 minimum really goes to about 150 pounds.

So anything that’s under 150 pounds if more of a small parcel type shipment, whether it be multiple boxes or whatever the case is.  But anything under 150 pounds is typically going to be very cost-effective to ship it via DHL.  If you’re talking over that, about the 200-pound range is when you start to realize, “Okay, I should probably start to look at some air cargo or some air freight options,” because at that point, you know, DHL, you’re going to get – you know, if it comes from China, you’re going to get it in one day.  I mean their transit there is pretty sick.  But on the air cargo, if you don’t need it, you know, that quick, there are cheaper options and other carrier options that you can use and that we kind of have under our umbrella that we use coming out of Canada or going to Canada, or to China.

Grant:  Now if you could help out our listeners a little bit, give us some examples of – I know it’s always hard to estimate a rate exactly depending on, you know, the lane and the time, but let’s just say as a whole, I’m taking an order in from, let’s just say southern China and let’s say from Hong Kong or whatnot and then I’m taking it into Los Angeles or New York.  So let’s say I’ve got one pallet that weighs 500 pounds and let’s say it’s your standard pallet, you know, 48 x 40.  Let’s say it’s like 40 high or whatnot.  How much would that cost?

James:  Typically, with China, and this is what we’ve seen as kind of an average, China seems to have a price per pound that’s around $5.50.  So anywhere from $5.00 to $5.50 per pound is typically where China seems to come in with the manufacturer.  And so if you’re saying, you know, 500 pounds, you’re looking at, you know, between, you know, $2500.  And when I say $5.00, that’s all-in, meaning that includes the surcharge and that includes, you know, security and all those functions so it’s a baked-in number and that’s really when you get in there, cargo, how you have to start thinking because what kind of a report is that price per pound?  And China, like I said, is around $5.00 to $5.50 if you’re using China.  Now, you know, we have rates that are, you know, about $1.00 and sometimes even better than that depending on the time of the year, better than that number.  You know, and it really again depends on that manufacturer but as a rule of thumb, what I’ve seen in experience is around that $5.00 to $5.50 per pound.

Grant:  And is that anywhere in the US or is that west coast or east coast?

James:  Pretty much anywhere in the US.  I mean yeah, because when you look at the transportation – I mean if you think about 500 if it lands in New York City or in California, you know, 500 pounds on an LTL shipment from the port to your door, any given location, isn’t going to be a whole lot of money.  I mean it may be $200, $300 to get it from the port to your door if you’re in like central America or something.  But yeah, I mean that’s what we see as an average is about, you know, no matter where it’s going.

Grant:  Yeah, I’ve always found that to be really interesting because for the most part, you know, people generally don’t want to go LTL because you hear like what you’re saying $5.50 per pound and if I’m bringing over – I mean, for me, I’ve got very heavy stuff so I’ve got, you know, like 1,000 pallet of cutting boards so it’s like $5,000 so it’s almost inaccessible to me, but for somebody like Mike, who might be bringing in, you know, ice wraps of knee sleeves and they might be an actual 500 pounds or probably even less probably.  What, Mike?  Like 300 pounds for a pallet you’d say?

Mike:   Well, I mean we’ll stock the pallet pretty darn high so we can usually get more than that on the pallet-

Grant:  Okay.

Mike:   But I mean the weight per item is significantly less.

Grant:  Right.  So let’s say you’re just paying $5.00 a pound.  It actually becomes like pretty reasonable for somebody like you, and then one of the things that most people don’t realize, too, when you’re importing: with air cargo, a lot of, you know, the customs and everything generally are included in the quote, like you were saying, James, $5.50 all in, but with oceanic, a lot of people won’t see that quote from some shipper in Ali Baba or somewhere else that goes, “Hey, you know, we’ll do, you know, $150, $200 per cubic meter,” which is kind of like, you know, one small pallet.  So you’re thinking, “Wow.  You know, I can only get that for $200 to the port, you know.  That’s a great savings.”  And then you realize, “Oh, well, that’s just a boat transport.  There’s still the LTL fee from the manufacturer to the port and then customs clearance in China, then you’ve got customs clearance in the US, then you’ve got your ISF filings and then you’ve got your duties and then you’ve also got, you know, paying somebody to do everything and then you’re got LTL from the port to your door.

So when you add everything back in, like LCL transport from door to door, you’re looking at, you know, $1,000 sometimes if you’ve got, you know, all that paperwork you’ve got to do and get everything over.  So a lot of the times, the paperwork is actually far, far more expensive and then the other LTL is much more expensive than the boat shipping because boat shipping is the most cheapest transport on earth, period, per pound.

Mike:   Can you maybe hit on that real quick, James, you know, as far as the cost on the boat shipping?

James:  Yeah, that’s probably – I mean it’s going to be our weakest suit only because when you’re looking at coming in via ocean, you know, you’ve got some major players out there and you’ve got DHL’s version, which is Danza, and ocean shipping is so very competitive that it’s really hard to – if you’re just doing LCL, less-than-container load, it’s really hard to really pay like twice as much as you would with somebody else because it’s so price-driven that when you’re looking at a company to do your LCL, you’re looking at a company that, one, you trust, two, that maybe a known quantity, and then possibly somebody that’s already doing some of your other items, you know, as far as if they’re doing your LTL or some of your other international stuff.  Because typically, you know, you can find a company that can do multiple aspects of your international.  I know we certainly do.

But like I said, ocean is so very competitive that it’s really – you know, picking a company that you know is kind of going back to what Grant said because they can tell you one thing and leave out a whole bunch of costs but if it’s a known entity to you, chances are they’re not going to want to jeopardize the other parts of the business and not fill you in on the additional costs that are associated with the ocean.

Mike:   Yeah, that makes a lot of sense.  So we’re kind of running out of time here today.  You know, we were kind of talking about doing like 45 minutes.  One of the things you’d mentions kind of in our pre-interview was your guys’ service, and I know that you’re, you know, really keen on talking about service and wanted to kind of end the call on just how you guys differentiate yourselves in the industry based on your service, which, you know, people might take for granted until they need help.

James:  Right.

Mike:   You know, and I’ve certainly been there and I can say with other consolidators I’ve used, you know, they can use their weight and power to kind of help with, you know, getting issues resolved and stuff but I wanted to kind of give you a change to talk in your own words about how you guys differentiate yourselves from the marketplace.

James:  Yeah, for the small business, I mean, you know, small business companies, you know, FedEx, UPS, and even DHL for that matter, no one’s really servicing the SMB market.  No one’s really kind of giving the concierge service, so to speak.  I mean like the larger corporations that are doing, you know, a million dollars in shipping, you know, they have a dedicated account manager and that person’s out there and they’re kind of wining and dining and they’re visiting them, you know, once a week and seeing how things are going.  And when they have issues, then obviously, they have that guy that’s going to go to battle for them.  That’s really who we are for the small businesses.  I mean, you know, we’re their concierge service for the international, and international as it relates to either DHL or air freight or ocean or LTL into Canada and even the domestic LTL piece.

You know, the way that we separate ourselves is just really providing that unparalleled service that really no one really focuses on and it’s a shame because the US economy is made up of about 80% small businesses and, you know, they’re the driving force.  So service is a big deal and for any small business that needs to, you know, make a phone call and they want to get a person as opposed to pressing, you know, 10 different options, it’s a really good offering for small business because, you know, it’s what we do and it’s the reason why DHL chose us to do it in the States and also in about the 14 other countries that we’re doing it is that we’re really good at it.

Grant:  And James, if you could just quickly go over kind of your pricing model.  What does it cost for someone to use inXpress?

James:  Nothing.  Yeah, no that’s the great thing.  It operates just like FedEx or a UPS account.  I mean you only pay when you ship.  And the good news about that is that you’re getting a discount – you know, for a small business, they’re getting a discount that they could never achieve on their own that there’s no cost to.  There’s no annual fee, there’s no membership fee, it’s nothing weird.  But what we’ve also done is that because of the ancillary other costs like pickups, you know, we went back to DHL and we negotiated out all the pickup fees so whether you pick up once a year or once a day, we’ll never receive a pickup fee.  So you’re not only getting a discounted break, but you’re also not getting the pickup charge.  There’s some of those aspects for small businesses that it becomes a no-brainer.

Mike:   Excellent.  Well, James, I really can’t thank you enough for your time today and coming on the show, and just to kind of recap for everybody if they want to get ahold of you, direct phone number is 480-405-6390 and we have email, which is james.peacock@inxpress.com and don’t forget to leave off the “E” on “express” there, and your website which –

James:  Yeah, that’s right.  It’s intlshippingrate so it’s the abbreviated version for “international,” so intlshippingrates.com.

Mike:   Got it.  I was like lost in a sea of – if anybody’s like me when they have their Google Chrome open, there’s like 70 tabs and I lost which tab that was in.  So definitely appreciate that and we’ll put all this information in the show notes as well, but if you guys do any, you know, importing, if you do any LTL, if you do any shipping internationally, definitely someone to talk to and look at getting your rates down and giving your customers a better experience all around.  So thank you for, like I said, coming on the show and also thank you for the great service you’ve been providing us because we’ve been using you guys as full disclosure.  So have a great rest of the week and thank you so much, everybody.

James:  Good.  Thanks, guys.

Grant:  All right.  Thank you, everyone.

Outro:  If you have any questions or comments, we’d love to hear from you.  Head over to EcomCrew.com and sign up for the Ecom Crew newsletter to get regular updates on what’s working in ecommerce today, and get the latest from our blog.  If you haven’t already, we’d really appreciate an honest review in iTunes.  These reviews help us make sure we’re delivering exactly the content you need to be successful.  And make sure you subscribe to the show for more tips to move you up in the business ladder and into success.  We’ll see you next week.

Grant Chen

Grant currently owns and operates two ecommerce businesses selling kitchen products and clothing. He is also a partner in a restaurant franchise with two locations and has over a decade of experience as an entrepreneur and web developer. He lives in the beautiful city of Seattle, Washington, and when he's not at his laptop with a coffee, will be found skiing or hiking in the mountains .
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