The geography and demographics of Europe makes parcel shipping
across the region more complicated than in the US. In this QAD
Precision Report, Jack Moloney explains the differences.
Sending a parcel from Austin in Texas to Akron, Ohio is not a big
deal. Well, other than the fact that there is nearly 1,400 miles
between them — which takes a bit of time to traverse.
There’s roughly the same distance between Budapest in Hungary and
Bilbao in Spain. Distance is the least of your worries in this
scenario. Sending a package between the two is far more complicated
since you need to cross a number of borders. Your parcel could go a
number of routes, but the most direct one will take it across
Slovenia, over the top of Italy and around the south of France.
Sending parcels across borders can be a complex challenge.
Traditional distribution channels — and customs clearance operations —
were both built around large consignments of freight. E-commerce has
made smaller, more frequent shipment of parcels a reality for many
industries. B2B shippers have had their distribution models upended —
or at least supplemented — by parcel shipping.
There are 50 sovereign states in Europe. As a result, transporting
your goods across Europe is somewhat more complicated than moving
goods across the United States. It also means that a European
transportation execution system needs different capabilities to a US
solution. Geography and demographics demand it.
More than half — 27 — of the countries in Europe are members of the
European Union (EU). Taken together, the EU member countries form an
area that is less than half the size of the US, but with a population
that is more than percent larger. Across this area, there are also 24
The EU has brought a level of economic, trade and political
standardization to member countries. Despite that, many differences
remain. Shippers delivering across the EU must deal with diverse
freight rating methods, regulations, infrastructure and carrier
networks. This drives a level of complexity in transportation and
trade that is not seen within the US domestic marketplace.
No Uniformity, No Universal Freight Rating
European carriers can use an assortment of rate calculation methods
when it comes to freight rating. There is no uniform Postal Code
system across Europe. As a result, rate-zone definitions differ by
carrier, service (i.e., international vs. domestic) and country. These
rate zones may be based on a combination of factors such as country
postal codes, cities, regions, countries and so forth. This is vastly
different from the US. In the US, carriers use one system — the zip
code — to define similarly structured rate zones.
Furthermore, although an estimated 75 percent of European freight
goes by road, there are no common European-wide tariff structures.
Therefore, freight rating is done on a per-carrier basis. This is
typically based on zones, weight, volume and distance. However, unique
criteria such as load metres (one metre of loading space of a truck’s
length) and number of packs may also be factored. All these
parameters, along with the use of different currencies, make it
complex to calculate and cross-compare rates for different regions.
So Many Countries, So Many Regulations
When you ship across Europe, you are likely to face additional
documentation and reporting requirements due to individual country
regulations. Just like in the US, “international shipping” adds
complexity in terms of documentation and customs requirements.
However, goods (in free circulation) transported within the EU can
move with a minimum of documentation. In such a case, a Delivery Note
or Packing List is generally sufficient.
However, any shipment leaving the EU must be electronically reported
to customs. Many member states use their own unique e-customs system
and reporting infrastructure versus the US’s single Automated Export
System (AES). In addition, shipments need paperwork to travel. This
can vary by country of export, country of import, as well as the
countries that the goods may pass through on their way to their final destination.
Diverse Carriers, Diverse Ways of Operating
The European carrier market is fragmented. There is still an
abundance of country and regional-specific carriers, despite recent
mergers over the past several years. Some of the larger carrier
organizations have grown by acquisition. As a result, you may deal
with a single entity from a contract negotiation basis but work with
different carriers from an operations perspective. This is
particularly prevalent when shipping from multiple countries — a
carrier’s domestic country network may continue to operate in the same
manner as they did prior to acquisition.
The challenge from an operational perspective is that your
transportation management solution needs to adhere to multiple formats
for labeling, documentation and tracking number generation, and
integrate with multiple systems for electronic exchange – all for a
Languages, Currencies and More: Internationalization for Localization
Finally, and by no means unique to transportation execution, is
Internationalization (known as I18N), defined by the World Wide Web
Consortium (W3C) as follows:
“Internationalization is the design and development of a product,
application or document content that enables [sic] easy localization
for target audiences that vary in culture, region or language.”
Localization in terms of the user interface as well as outputted
documentation and external integrations needs to be supported. That
means multiple languages; different number, date, and time formats;
and multiple currencies and units of measure. You need to be able to
share this information among multiple parties. However, each party
expects you to present this information in their preferred format and language.
Taming the Beast
In summary, a European transportation management system must have the
flexibility to handle a diverse landscape. It must be able to work
with many more unique carrier-, country- and user-specific
requirements than that of a US-based solution.
This complexity includes a broad range of connectivity to carriers
and customs, differing rate structures and international shipping and
usage requirements. Couple that with changing regulations and ongoing
carrier merger and acquisition activity at any given time and you can
see how shipment execution is a different beast to tame across the pond.
Along with this complexity, the solution should also give you
tangible benefits. These ideally would include real-time visibility
into your shipments and global package tracking. European shippers,
like their US counterparts, also need to contain transportation costs
and optimize operations.
Since the QAD Precision product suite grew from a European base, our
Execution solution was built with this complexity in mind, and
supports multi-country, multi-currency and multi-regulation usage.
About Jack Moloney
Jack Moloney is Transportation Execution/Carrier Manager for QAD
Precision, a division of QAD Inc., and has over 20 years experience in
the Supply Chain Management industry. Jack joined QAD Precision in
1998 as a software engineer and subsequently led the design and
development of the company’s parcel carrier integrations. He has also
worked on the design/development of the QAD Precision solution’s
Routing Guide, Freight Management, and SOA integration. Jack has a
BSc. in Computer Applications from Dublin City University.
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