Global trade continues to thrive, with cross-border shipping emerging as an indispensable driver for businesses aiming to tap into new and profitable markets. By enabling access to diverse customer bases and facilitating the movement of goods across regions, cross-border shipping allows companies to capitalize on market diversification and meet growing consumer demands for international products.
According to Capital One, U.S. e-commerce organizations and retailers’ revenue represents 28.3% of global retail, underscoring their significant role in the global economy. This growth trajectory, with a projected compound annual growth rate of 3.19%, highlights the increasing importance of cross-border shipping as retailers look to expand their reach and sustain this momentum. In order for retailers and e-commerce organizations to meet or exceed those forecasts, they have to continue finding new customers around the globe.
As consumer expectations for swift, seamless delivery continue to rise and companies seek to establish footholds in untapped regions, the intricacies of cross-border logistics are becoming even more critical. For example, a report by Coresight Research found that delivery cost was the most important factor for online shoppers, followed by delivery time, which puts immense pressure on businesses to optimize international shipping networks and streamline customs processes. As companies target untapped regions and address these logistical demands, several trends are shaping cross-border shipping in 2025.
Emerging Markets: Opportunities and Complexities
Regions like the Middle East and Latin America are experiencing rapid economic development and increased e-commerce activity, making them attractive targets for global retailers. In 2023, the U.S. exported more than $24.8 billion of goods and services to the United Arab Emirates, marking a 19% increase over 2022. Meanwhile, markets in regions like the Gulf and LATAM are primed for growth as global brands expand their reach. However, compliance, cost efficiency and tax collection present new challenges for companies looking to thrive in these regions.
For instance, recent changes in Mexico’s tariff rules aim to limit the flow of goods from China, creating new challenges for U.S.-based retailers shipping to Mexican customers if any components originated in China. Despite these barriers, the potential for growth remains strong. E-commerce sales in Latin America are projected to grow by 20% annually, highlighting the region’s potential.
Despite these challenges, the opportunities are significant. Success requires careful planning, including staying ahead of regulatory changes and ensuring efficient operations to meet growing demand in these regions.
Localized Inventory Makes Fulfillment Faster
Consumer demand for faster delivery has fueled a growing trend toward localized inventory solutions. By positioning goods closer to end markets, companies can reduce delivery times, lower shipping costs and improve overall service levels. In the U.S., this practice has gained significant traction as many retailers seek to establish regional fulfillment hubs to serve local customers more efficiently. This trend will expand into other markets as retailers seek to offer the same level of service to their customers overseas.
By positioning goods within these emerging markets, businesses can cater to local consumer demands more effectively, reduce delivery times, and enhance customer satisfaction. This approach also helps retailers navigate complex customs procedures and tariffs by pre-staging inventory closer to the end customer, thereby simplifying cross-border logistics. While the investment in warehousing and localized operations can be substantial, the long-term benefits of improved market access and stronger consumer relationships make this strategy increasingly attractive for companies looking to establish a robust international presence
Localizing inventory in key markets also allows retailers to significantly reduce the costs associated with handling returns. According to Appriss Retail, total returns for the retail industry amounted to $685 billion in merchandise in 2024, a staggering figure that underscores the importance of efficient return management. For companies that can implement these solutions, localized inventory becomes a competitive advantage and critical tool for addressing one of the retail industry’s most persistent challenges.
Europe’s Sustainability Standards Will Affect More Retailers
Sustainability has become a key focus for the shipping industry, driven by increasing consumer awareness and regulatory pressures. Europe, in particular, has set a high standard for sustainable shipping practices, with regulations like the German Packaging Act, VerpackG, mandating the use of eco-friendly materials. Organizations expanding into these markets must adhere to stringent rules, such as the use of recyclable polybags and reduced packaging waste, to remain competitive.
E-commerce organizations and retailers should be creative with how they ship their products, focusing on methods that balance regulatory compliance with cost savings and sustainability. For example, optimizing packaging to fit the size of the product not only reduces material waste but also cuts shipping costs and aligns with consumer preferences for eco-friendly practices. Shipping a small battery, home accessories, custom jewelry, souvenirs or cosmetics in a large cardboard box is wasteful and costly - in fact, according to Sadlers, the cost of boxes could rise as much as 17% in the next year.
Businesses are increasingly adopting lightweight and recyclable materials like Jiffy mailers and polybags to meet European standards and reduce their carbon footprints. These efforts also cater to the growing consumer demand for sustainable products. Deloitte reports that consumers’ most valued sustainable practice is producing sustainable packaging and products.
Adapting Strategies for Success in 2025 and Beyond
Success in 2025 and beyond hinges on more than operational excellence. Retailers and e-commerce organizations need strategies that align with the expectations of global consumers and regulators. Understanding regional preferences, adhering to local regulations and building trust within these communities are essential for sustained growth.
Adaptability is the most valuable asset in cross-border shipping, driven by the global expansion of e-commerce. Businesses that embrace these trends will not only set industry standards for excellence but also secure long-term prosperity as they extend their reach into new markets.
