UPS Wants to Eliminate Surprise Import Fees for Consumers

As concerns over new tariffs and other potential duties hang over consumers’ heads, UPS wants to be transparent to shoppers on what they will pay if they buy a product from an overseas website.

The logistics giant is launching UPS Global Checkout, a feature for e-commerce retailers that gives online shoppers an upfront view of the amount they will pay in duties, customs fees and taxes at checkout. In particular, the package courier seeks to eliminate a problem consumers often have upon receiving an international purchase—getting an additional bill for unpaid import costs.

Available in 43 origin countries and delivering to more than 200 destinations worldwide, the service covers major markets in North America, Europe and Asia.

The service adjusts to policy changes, international tax laws, duties and tariffs in real time, UPS says, effectively allowing shoppers to view the guaranteed total landed cost before completing the purchase. According to the company, the feature leverages artificial intelligence to assess items in the shopping cart and calculate the correct duties and taxes.

“Online shoppers can now enjoy full transparency and peace of mind with no surprises, knowing what they pay at checkout is the total cost for a cross-border purchase,” said Kate Gutmann, executive vice president and president of international, healthcare and supply chain solutions at UPS, in a statement. “This, combined with our total UPS premium delivery experience, benefits our customers—the retailers—by helping to drive additional sales. Given trade shifts around the world, expanding growth opportunities in new markets can now be seamless.”

According to a survey from e-commerce personalization platform Nosto, 41 percent of 2,000 U.S. and U.K. shoppers, were deterred from buying from an international e-commerce site if the amount of duties and taxes was not clear at checkout.

Consumer confidence on the whole is slipping as the tariffs come into play and shoppers lament their own personal finances.

The latest data from The Conference Board on consumer confidence, released Tuesday, slipped for the fourth straight month in March. The Consumer Confidence Index sank 7.2 points to 92.9.

“Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low,” said Stephanie Guichard, senior economist of global indicators at The Conference Board, in a statement. “Consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”

Despite any current feelings from consumers, UPS has had the feature in the works before  

“The timing’s great, but it’s been something our customers have been asking of us for a while,” Kiel Harkness, vice president of strategy for UPS’ European and Americas markets, told Bloomberg.

Retailers can implement the service via an API integration. UPS will also be releasing Global Checkout in its WorldShip shipping software for small businesses by the end of April. That program is designed so companies can process many packages from multiple desktops.

Alongside the Global Checkout rollout, UPS offers other tools to simplify cross-border e-commerce in an era where it may not be so simple. UPS Export Assure, introduced last year, generates accurate product descriptions for sellers, which can help improve export documentation and ultimately decrease delays at customs.

And UPS Paperless Invoice allows customers to submit trade and customs documentation electronically, ideally resulting in less manual processing and fewer customs holds.

All three solutions are built to help reduce errors and customs clearance delays, which could become even more of a concern if the duty-free de minimis trade exemption for low-value shipments into the U.S. were to get axed.

The Global Checkout launch announcement came a day after UPS’ stock fell 5 percent throughout the day, the largest dip among all the firms in the S&P 500.

A likely catalyst was Bank of America research analyst Ken Hoexter lowering his forecast for the parcel delivery company’s earnings for the first quarter.

In a research note Tuesday, Hoexter wrote he now forecasts UPS earnings per share for the quarter ending March 31 to come in at $1.31, down 15 percent from his previous forecast.

Beyond earnings, Hoexter noted that the tariff uncertainty and winter weather are contributing to softer demand. He anticipates an 8 percent decline in domestic parcel volume for the quarter, a bigger decline than the 5.7 percent reduction he earlier forecasted.

UPS reports its first quarter earnings on April 29.