Optimised logistics for e-commerce retailers and shoppers: How it works!

How you can optimise your logistics process

Many retailers see logistics as a necessary evil, especially in cross-border e-commerce. After all, anyone who wants to benefit from the attractive Swiss market is automatically confronted with the customs border.

When exporting to Switzerland, it is therefore essential to invest in good and reliable logistics - if you cut corners here, you are saving in the wrong place. We'll show you how easy it is to optimise your logistics.

In this blog, we tell you why Switzerland is a very interesting e-commerce market.

Online shoppers are demanding when it comes to convenience. Swiss customers are no different. An optimised logistics set-up is a clear added value for your Swiss shoppers. And it saves a lot of money - for you and your customers.

In cross-border e-commerce, a shipment consists of various steps.

We take a shipment journey as an example to show you in a practical and comprehensible way. Each stage of the journey is a separate, clear chapter.

If you are only interested in individual sections of the journey, simply click on the relevant section in the table of contents on the left.

We will now show you what is important for logistics in cross-border e-commerce.

We have divided the whole thing up so that you can use this logistics value chain to look for suitable suppliers. Because each component is an individual cost element in your cross-border e-commerce logistics.

Did you know that sustainable e-commerce also works? Find out more in our blog.

On our shipment journey, we explain the most important things briefly and concisely so as not to tax your patience - and your time - unnecessarily.

When we go into logistical details in the individual sections, we have linked them to our specialised blog articles. This gives you the opportunity to read in-depth about anything that interests you.

Ready? Then let's pack our bags and get started!

Don't like reading? We've summarised everything you need to know about exporting to Switzerland. You can find everything about the opportunities, logistics, customs regulations and returns handling when exporting to Switzerland in this white paper.

Fulfilment - the start of every shipment's journey

Fulfilment is our introductory chapter. Before we bombard you with prose on this topic, we will concentrate on showing you how the geographical location of the fulfilment service provider you choose affects the rest of the logistics chain.

Let's make a brief comparison between national e-commerce and cross-border e-commerce:

In national e-commerce, the choice of your fulfilment location has a much smaller impact on the logistics chain than is the case in cross-border e-commerce. Why?

The right location for your cross-border e-commerce fulfilment centre

A small example: Let's assume you only want to sell your products within Germany.

There are hundreds of fulfilment centres in Germany. There are also hundreds of logistics centres from various providers for last-mile delivery.

This means that no matter which logistics centre you choose, the goods can be delivered to your carrier's logistics centre on the same day.

Of course, it is an advantage if you choose a fulfilment centre that is as close as possible to the logistics centre. Time is money: you can quickly save half an hour or more on the cut-off time for a next day delivery.

However, if you operate cross-border e-commerce, let's say e-commerce in Switzerland, things look a little different. We continue to assume that your fulfilment centre is located somewhere in Germany right next to a selected provider for the last mile.

Now there are four additional factors that lead to a longer delivery time or an earlier cut-off time if the products are to be delivered to another country, for example Switzerland.

Before we come to these points, we would like to briefly explain two technical terms:

• Cut-off time: Time by which the webshop orders can be received so that the products can still be handed over to the deliverer in time to realise the fastest delivery date.
• Latest arrival time (LAT): Time by which the consignments must be delivered to the carrier so that they can still be processed for delivery the next day. For many national delivery companies, the LAT is 6 p.m. so that priority shipments can be delivered nationwide the next day.

4 factors that affect your delivery time:

• Distance: this plays the biggest role, even though most logistics networks in a country like Germany are very efficiently developed. However, if a parcel that is handed over to the shipping service provider in Munich is in Hamburg the next day, this does not mean that this parcel can also be delivered in Switzerland by the same delivery company. The effect that distance has on the time factor is usually underestimated. A journey of 200 kilometres requires almost three hours more transport time.
• Network transfer: It may well be that your provider does not have its own network in the destination country for the last mile and therefore hands over your orders to a service partner. The global postal system is structured like this, for example - no postal service in the world has its own delivery infrastructure in another country, but all postal organisations in the world work together and parcels are delivered by the respective domestic postal service. However, the transfer to another network takes time. This means that delivery takes longer or the cut-off time is earlier.
• Customs clearance: This is the biggest hurdle in international e-commerce and harbours the greatest risk of your customers having to wait a long time for their ordered goods. This is because the further away you are from customs in the destination country, the less control you have over the respective import processes. For example, the waiting time at customs in Germany can be several hours and vary greatly depending on capacity utilisation. However, much shorter waiting times are the rule when importing goods at smaller border crossings.
• Legal restrictions: They quickly throw a spanner in the works for e-commerce retailers when it comes to delivery times. One example: If you want to export goods from Germany, the goods are blocked for 24 hours after customs declaration. This law alone is responsible for extending the delivery time from Germany by a whole day! You can find the relevant law in the S-GE glossary.
  
  
  
  

Joana from iHerb tells you why it is important to adhere to the quality of delivery and order modalities.

So what do these four points mean in concrete terms? All of these factors have a direct real impact on the delivery time. With a normal set-up from Germany to Switzerland, it cannot be done in less than 48 hours.

Would you like to find out how you can adapt and optimise your set-up? Then take a look at our optimiser for exporting to Switzerland.

Pre-collection - Here you can optimise your logistics costs

To help you understand our explanations, we will briefly outline the three most important points of a pre-collection:

• Fulfilment: This is where your goods are stored and from where they start their journey.
• Cross-docking point: This is where your export shipments are reloaded if necessary. This location could be a haulage company, for example. Goods are collected from the customer by a vehicle and then reloaded onto a larger vehicle. This vehicle then drives larger volumes (consolidated shipments from several customers together) to their destination - for example, to the airport. There they are finally reloaded onto an aircraft.
• Destination point: This is where your goods are fed into the logistics network of your delivery service provider.

Here, too, there are of course important points that have a significant influence on the costs of the pre-carriage:

1. Distance: The geographical distance between fulfilment and the destination country is a decisive factor. The greater the distance that the logistics provider has to cover, the more it costs in terms of labour, energy and wear and tear on the means of transport. Consequently, the costs per parcel increase (for the same volume). The choice of fulfilment in cross-border e-commerce should therefore not be underestimated.
2. Volume: Your unit transport costs are heavily dependent on the volume that you ship (note: the volume here refers to the number of e-commerce shipments). The fixed costs per transport (driver, vehicle depreciation or simply energy costs and wear and tear) are the same, regardless of whether you want to send one Euro pallet or six. This is why the unit transport costs increase massively with lower volumes. Conversely, the costs per consignment fall when the volume increases.
3. Payload vs. direct transport: If you transport your goods by individual transport, a means of transport is used exclusively for your e-commerce shipments. To summarise, direct transport has these advantages and disadvantages: Direct transport is a fast transport option because there are no detours or reloading processes to consider. If the volume is so large that the means of transport can be fully utilised, direct transport is the most cost-effective option. If the volume is rather low, direct transport is expensive per consignment because the entire costs for a journey have to be allocated to your few consignments.

In the case of a payload, different customers share the transport capacity for the pre-carriage to Switzerland. This reduces the unit costs per transported consignment. There are two variants of payload transport:

• The groupage transport comes to your fulfilment (point A), collects your consignments and brings them to point C.
• You transport your consignments to point B with a smaller vehicle or by courier. From there, the goods are taken to point C by a freight forwarder.
  
  
  

The right choice of delivery for your online business

Depending on the geographical distance and desired delivery time, you can choose between air transport or land transport. Transport by air is significantly more expensive than overland transport. For exports to Switzerland from Germany or Austria, land transport is of course the best option.

Delivery service: With most last mile delivery companies, you can choose between priority services and so-called economy services:

• Priority service: your goods will be delivered the next day as soon as they arrive in the destination country.
• Economy service: Your customers usually have to wait one day longer for delivery.

The procedure is where it gets interesting! There are two options available to you here:

Option 1: a postal/courier collection. This means that you feed your goods directly into the delivery service provider's system in your country of origin. They take care of customs clearance for you. Advantage:

• No major additional expense. Particularly interesting for smaller e-commerce retailers who do not yet import large volumes into Switzerland. This allows them to minimise the initial outlay (e.g. IT).

Option 2: a commercial pre-collection. This means that you first transport your goods to the destination country by lorry or plane with a freight forwarder. You or your forwarding agent will take care of export customs clearance and import customs clearance in Switzerland. Advantages:

• For larger volumes, the unit costs are significantly lower than with option 1.
• Faster transport.
• Swiss shoppers benefit from a better service thanks to commercial customs clearance. They do not have to pay customs duties, VAT and customs clearance fees at the door. This factor has a major impact on your KPIs (specifically on the conversion rate, the referral rate and the repeat purchase rate).

Customs clearance - crucial for logistics in e-commerce

This is probably the most important point of the shipment journey. From a customer experience perspective and therefore also for your KPIs! Most foreign providers do not realise this in every detail.

You can find out how MaKeWeBo was able to mitigate import restrictions with the right customs clearance solution in another article.

European retailers in particular, who primarily sell within the EU. Because there are no customs barriers here. Want to know everything about Switzerland's customs regulations? Then you've come to the right place with our article, Switzerland's e-commerce customs regulations.

Source: IPC Shopper Survey 2023 - Country Report Switzerland

Take a quick look at this IPC study. It shows that most Swiss customers had to pay the costs - be it on dispatch, receipt or even afterwards. These two variants can be found in practice:

• The Swiss customer receives an SMS with the payment request and a link. They use this to pay customs duties, VAT and customs clearance fees.
• Or the Swiss customer pays VAT and customs clearance fees at the front door upon receipt of the consignment. This procedure is called Cash on Delivery (COD).

Neither customs clearance procedure will make your customers happy.

They have a direct impact on your referral rate and customer satisfaction.

For the Swiss market, these two procedures are still the order of the day - unfortunately! It's no wonder that the Swiss are increasingly complaining that they have had bad experiences with customs and everything associated with it in an international comparison.

Source: IPC Shopper Survey 2023 - Country Report Switzerland

We will now show you two customs clearance options: postal and commercial customs clearance.

Postal customs clearance in online retail

The name says it all: with postal customs clearance, your e-commerce shipment is cleared through Swiss Post. This option is used if you also carry out the pre-collection by post, i.e. post the consignments to Deutsche Post or Austrian Post.

Here is a summary of the process:

• You must affix a so-called CN22 to your consignments. All information that is relevant for customs clearance is stored here.
• All consignments are cleared through Swiss Post.
• For consignments with an import turnover tax of over CHF 5, the Swiss recipient will be charged a customs clearance fee of CHF 11.50 plus 3% of the value of the goods.
• Your Swiss customer must pay the customs clearance fee to the postman at the front door upon receipt of the consignment.
• If the recipient is not at home, the consignment will not be delivered. They will receive a collection notification.

Postal customs clearance is the worst option for sending parcels to Switzerland because it creates a negative customer experience.

You can find everything you need to know about VAT and its regulations as well as different solutions for delivery processing in our article on fiscal representation.

The premium option in cross-border e-commerce - commercial customs clearance

With this option, your goods are imported into Switzerland by a customs clearance service provider, usually a freight forwarder. This always involves commercial pre-collection.
Commercial customs clearance is very customer-friendly. As a shop operator, you can offer your Swiss customers a unique premium cross-border e-commerce experience.
Commercial customs clearance allows you to bypass the customer-unfriendly customs clearance and delivery processes of postal customs clearance.
As a retailer, you handle customs duties, customs clearance fees and import sales tax, and your customers don't have to struggle with the annoying payment of fees at the front door. You can have your customers pay these costs in advance at check-out and the matter is settled.

Commercial customs clearance is divided into two variants:

• Individual customs clearance: Here, each individual consignment is cleared separately. The customs clearance costs per consignment are relatively high compared to collective customs clearance for larger volumes. However, individual customs clearance can be interesting for a large number of customs tariff numbers.
• Collective customs clearance: All consignments in a delivery are cleared collectively. This option is cheaper than individual customs clearance per consignment. However, no customs duty savings can be made with this type of customs clearance.

Customs clearance is therefore one of the key components for a successful export to Switzerland. These articles are quite interesting:

• Blog DDP vs DAP
• Customs regulations in Switzerland

Delivery over the last mile - tips that pay off

It is worth taking a closer look at this step. That's why we dedicate various sub-chapters to it. Aha effects are guaranteed!

Save costs: with a clever format and the right channel

This part of logistics can quickly add up. Conversely, it can also be a good way to save money. In the e-commerce sector, the proportion of logistics unit costs is said to be over 50%. In fact, the actual costs vary significantly depending on the variant.
Format: The heavier and/or bulkier your consignments are, the more expensive delivery is.
Which shipping channels can you use to send the order?

• Letter channel: This is the cheapest. Did you know, for example, that around 80% of international shipments can be sent via the letter channel? For international shipments, you benefit from the maximum format length+width+height <= 90 cm and <= 2 kg. To give you a better idea: You can easily send two pairs of trainers.
• Parcel channel: This allows you to send goods from 0 to 30 kg with maximum dimensions of 100x60x60 cm.
• Courier channel: As a rule, similarly large formats are available to you here as in the parcel channel. You also benefit from a better service and faster delivery.

Provider: Compare the prices and conditions of the various providers.

Delivery speed: Faster delivery usually costs more. A distinction is usually made between Priority and Economy Service.

Additional services: Insurance and Saturday delivery are examples of high-quality shipments. With a clever set-up, retailers send all letter-channel-compatible consignments (as already mentioned, everything that weighs up to 2 kg and fits into a box with maximum dimensions of height + width + length <= 90 cm) via the much cheaper letter channel.
Only items that are larger and heavier are sent via the parcel channel. Retailers in particular, who have a large proportion of small consignments, benefit from the letter channel.

Example: Experience shows that 80-90% of all orders in the fashion sector fit into the letter channel. More information on Mailbox Plus. With Mailbox Plus you can save up to 60 per cent on costs.

Delivery time: what sets you apart from the competition

Here, too, a study summarises what Swiss shoppers expect in terms of delivery speed and country:

• If a Swiss person orders from a neighbouring country, a delivery time of 2 to 5 days is expected.
• If the order comes from a more distant country within the EU, 4 to 7 days is standard.
• Products purchased outside of continental Europe will be delivered within 10 to 15 days.

But what happens if you - in a positive sense, of course! - around these standards? No question: you increase referrals and the number of new customers. You can also promote your top logistics in your ads and on your site and tune your conversion rate. Text suggestion: "We deliver next day!" ;)

Close Border Fulfilment can help you here. We can help you to set up a setup where you can deliver from the EU at favourable prices with a cut-off time of 2 pm the next day throughout Switzerland!

Tracking: be sure to offer it!

You should definitely use a tracked logistics product for the Swiss market. The figures speak for themselves: 94% of Swiss shoppers sometimes or always track their cross-border shipments.

Tracking activity can be divided into two peaks depending on the shipment stage:

1. Your Swiss customers want to know that the goods they have ordered are actually on their way to them.
2. Swiss customers track shortly before the expected arrival of the parcel to enquire about the exact delivery date. Incidentally, it makes sense to announce the exact arrival of the delivery for shipments that are not sent DDP (i.e. including taxes and customs duties). After all, the buyer must be at home to pay taxes, customs duties and fees.

Source: IPC Shopper Survey 2023 - Country Report Switzerland

Additional options: important on the last mile

You can offer your customers different delivery locations:

Source: IPC Shopper Survey 2023 - Country Report Switzerland

The first delivery rate is generally very high and the theft rate is exceptionally low. This is why Swiss customers prefer home delivery. The low demand for signature products is also unusual.
As in most countries, there are countless additional options and service levels in Switzerland:

Source: IPC Shopper Survey 2023 - Country Report Switzerland

It is noticeable here that points that are indirectly related to customs clearance are of great importance to Swiss customers. It is important for them to know whether and to what extent customs duties and taxes are incurred and to have a simple return process.

Returns management in cross-border e-commerce

The first mile is the starting point of your shipment's return journey. In this case, "return journey" is a nicer word for returns - and no retailer likes returns.

In cross-border e-commerce, returns are even less popular than in domestic e-commerce. Of course, the costs are much higher and the administrative effort can quickly skyrocket if the returns setup is wrong. In addition, returns can lead to the loss of customs duties paid on import if they are poorly organised in fiscal and administrative terms.

You can find out how you can reduce your returns rate in our blog post.
Below we show you the two options that are possible for international returns.

International returns - the customer-unfriendly solution

With international returns, your Swiss customers post the parcel to their chosen service provider. The service provider ensures that the consignments are sent directly back to your warehouse in the country of origin. Your Swiss customer has to take care of this:

• Repacking
• Franking the return
• Customs declaration via CN22 labelling (see illustration). These details must not be missing on the CN22: Contents of goods, value of goods, weight
• Organise collection or drop-off at a drop-off point of your service provider

Once the international return has been dispatched, it must be stored again in the country of origin. Alternatively, you could not have the return sent back to the country of origin, but directly to a specialised service provider who will reprocess it.

Let's stay with the fashion example for a moment: this service provider would then iron the clothing again. This solution is particularly suitable for retailers with large volumes. They usually prefer a national returns solution because the logistics costs are much lower.

By the way, you can find all the information for fashion retailers who want to export to Switzerland here.

The first mile in Switzerland - part of a customer-friendly returns solution

What does "first mile" actually mean?

The first mile is the route of your return from the pick-up point (e.g. at your customer's home) or from the drop-off point of the return (e.g. the post office) to a national returns address. This can be your warehouse or a returns centre of a service provider.

It therefore makes no difference to your Swiss customers whether they are sending returns from a Swiss online shop or an international one - both are equally convenient for them.

In terms of costs and customer convenience, however, it makes a big difference for you.

Your Swiss customer has to take care of that:

• Repacking
• Franking the return (approx. one third of an international return)
• Organise collection or drop-off at one of your service provider's drop-off points

Let's assume that the Swiss shopper does not find out about the returns solution offered by the shop or is unaware of the consequences.

They buy the goods but want to return them after receiving them.

They are now forced to go to a disproportionate amount of effort.

Their customer journey is therefore likely to be quite poor - will this customer buy something from this shop again or recommend it? Probably not.

We recommend our blog on this topic: Optimised processes for your returns

Returns management - fast, flexible and local

Returns are as much a part of online retail as the Amen in church. For example: In Switzerland, you can expect a returns rate of up to 60% in the fashion sector, depending on the category.

As we explained earlier, there are two basic options:

• You can have returns from Swiss shoppers sent directly back to Germany or Austria. Your returns management is therefore in the country of origin.
• You have returns from Swiss shoppers sent directly to a Swiss returns centre.

It's obvious that the second option is the better option from the customer's perspective. And it has a direct impact on your KPIs!

You can find out more about KPIs and how they can be increased in our blog. If you want to know how fixed logistics affects your online shop, we recommend this blog.

Exclusive returns management in the country of origin? Not an optimal solution

This variant is actually no different from returns management for national e-commerce returns:

• The returns are registered.
• Content check (which items were returned, what condition are they in?).
• The goods are stored or destroyed.
• After 4 to 5 days, the refund for the returned items is triggered.

Advantage:

• There is only one returns centre.

Disadvantages:

• The logistics costs per returns shipment are massively higher.
• Convenience for your Swiss customers is not optimal (they have to fill out the customs clearance form).
• Swiss customs duties cannot be reclaimed.
• The refund is only triggered after 4 to 5 days.

Swiss returns centre - the more optimal returns solution

We would like to introduce you to this option in more detail. A brief overview of the advantages and disadvantages:

Advantages:

• The logistics costs per return are moderate because only national posting costs are incurred.
• Super convenience for your Swiss customers: no need to fill in the CN22 customs clearance form.
• The national returns address is perfect for increasing your conversion rate. Because this is far from standard.
• The refund is triggered after just one day.

Disadvantage:

• Administrative effort for two returns handling processes: once in the Swiss returns centre and a second time in the German or Austrian returns centre.

Check-in, content check and case management

Think of this process as an inventory of the returned goods. These questions need to be answered:

• When were the goods checked in at the returns centre?
• Which of the originally dispatched items were checked in?
• What condition are these items in? Most retailers specify criteria here that should be checked by the service provider. For example, damage.
• What special information did the shoppers provide? Here, most retailers pass on information provided by shoppers. For example, whether a certain item of clothing should be ordered in a different size.

Individual clarifications are part of case management. For example, if an employee feels that there is a case of fraud, a photo is taken and the case is investigated in more detail by the retailer.

This is simply about providing information and forwarding daily reports to the retailers as automatically as possible. So that you know the current status of the case and can quickly transfer the money back to the Swiss shopper.

Consolidation reduces costs for return transport

For retailers with very large volumes, it can make sense to return shipments from the Swiss returns centre on a daily basis. Rule of thumb: several 100 returns per day. If there are fewer, it makes sense to consolidate the goods for cost reasons. Consolidation limits can be defined for a specific time (e.g. returns every fortnight) or for a quantity (e.g. after eight Euro pallets). Good consolidation massively reduces return transport costs.

Return shipment of your goods

For very small quantities, it is worth returning the goods in one outer carton. In most cases, however, several Euro pallets are returned.

Consolidation helps to optimise the utilisation of the transport vehicle.

A good and efficient solution for this is the freight forwarder who also brings your consignments to Switzerland.

Export customs clearance

Export customs clearance ensures that your returns leave Switzerland again in compliance with the law. For export customs clearance and the creation of the transit document (T2), you need a customs agent who will take care of the handling for you for a fee.

The entire returns management process is extremely data-heavy and your service provider must have modern and dynamic IT tools. This is the only way to ensure that they can adapt data collection and reporting to your needs.

In general, data is very important in logistics. Read our blog to find out how you can reduce your e-commerce costs with structured data.

Swiss Post has developed the Dynamic Return Platform (DRP) for this purpose. We use it to configure individual customer set-ups, collect all the required data and communicate it in a simple format.

End of the journey - or conclusion

No two journeys are the same: It depends on your product portfolio, returns management, set-up and your individual requirements and needs.

The journey will therefore vary in length and complexity. In other words: a short city trip or an organisationally complex trip around the world in individual stages. Each individual stage of the journey has an impact on the customer experience. This is especially true for Switzerland as a destination!

It makes sense to work with a cross-border specialist for Switzerland in order to always focus on the data. Do you want to deliver to Switzerland, but still lack the facts? Our Switzerland E-Commerce Report provides you with the information you need.

Swiss Post is the right address for this. We are the Swiss cross-border e-commerce professionals and our services and IT products have been developed precisely for these needs.

Become a careful journey planner. This is the only way to tune your e-commerce KPIs.

You've seen it: The differences between possible set-ups in terms of costs and customer experience are huge!