Need to know
- Freight-forwarding services let you buy items from the US that aren't available in Australia
- You won't know how much you'll pay in freight until your package hits their warehouse – and it may be more than you thought
- A service that repacks and removes excess packaging, or consolidates items into one package, could save you money
Any Aussie who regularly shops online will know the frustration of picking out purchases on an American website, only to discover at the checkout that the company doesn't ship to Australia.
Freight-forwarding services look like the answer to this problem, but are they everything they're cracked up to be?
We look at how it works, what the costs are and compare popular freight-forwarding companies such as ShopMate, Shipito, US to Oz and more.
What are freight forwarding services?
Freight forwarding services let consumers shop from US stores that don't ship to Australia.
Consumers order their product to be delivered to the freight forwarder's US address – often a warehouse in a state with no, or low sales tax – which receives their purchases and forwards them to Australia for a fee.
These services exist in a number of countries, but this article focuses on US to Australia freight forwarding services.
How do they work?
Freight forwarding services receive your packages from US retailers, store them in their warehouse and provide other optional services like repacking and consolidating.
They then post your package to your Australian address using their own postal service, the US Postal Service or a courier service (DHL, UPS, FedEx etc). The freight forwarding service charges you the postage fees along with a range of their own fees depending on the services provided.
- Sign up for an account with your chosen freight forwarding service.
- You will be provided with a US address which you use as your delivery address when shopping from US retailers.
- If the store doesn't accept your Australian credit card, many freight forwarders also offer a shopper service which can make the payment for you, for an additional fee.
- You will be notified when the package(s) arrive at the US warehouse. If you're receiving multiple packages you can usually have them consolidated into a single package to reduce the cost of postage. You can also have a single item repacked to reduce bulky packaging.
- Most services will require you to declare the value of your item so they can add a 10% GST charge to your order which is paid to the Australian Tax Office on your behalf. If the freight forwarding service doesn't collect GST, you must pay it to the postal carrier upon receipt of your item.
- When your package is ready, the freight forwarder will notify you of the total cost.
- Log in to your account and pay your outstanding total. Some services may also require you to provide an invoice as evidence of the declared value of your item.
- The package is sent to your Australian address.
What are the costs?
Freight-forwarding was a particularly great deal for Aussies back when we could bag overseas bargains at a favourable exchange rate, and it's still useful for buying items that aren't available here at all.
But it's not a perfect system. Generally the freight-forwarding company can only give you a definitive quote on the freight costs for your product once they take delivery of it.
They need to weigh or measure it (usually both) to determine the cost, so you won't know exactly how much you'll pay until your package hits their warehouse. And sometimes it can be more than you bargained for.
It's not a perfect system … you won't know exactly how much you'll pay until your package hits their warehouse
You may need to contact the retailer directly to ask for the package's weight and size – amazon.com can be useful for this. Freight forwarder US to OZ recommends getting three weight estimates to find the average.
But shipping isn't the only cost to take into account – here's a list of some of the common costs and fees you may encounter with a freight forwarding service.
Note: These prices are based on the base/free membership level. Lower rates or free services are often available for paid members.
Repacking and consolidating
Repacking is when your item is removed from its original packaging and repacked into a smaller box/bag to reduce cubic weight. Consolidation is when multiple items are removed from their original packaging and repacked together in one box.
Most services will only repack or consolidate packages if it's likely to achieve a significant reduction in shipping costs (for example, an item of clothing in a plastic satchel is unlikely to benefit from repacking). Your freight forwarding service may also advise you that your package is not eligible for repacking or consolidation if it contains fragile or oversized items.
All of the freight forwarding companies we looked at provided both a repacking and consolidation service, although some only offered the services to paid members. Some companies repack or consolidate for free, while others charge a flat fee or a percentage of the savings in shipping costs.
ShopMate will repack a parcel to reduce its cubic weight if there's a saving of more than two kilograms. This service used to cost $5.50, but is now complimentary for eligible packages. They won't repack items that are oversized, fragile, flammable or leather, or packed in special cushioned packaging, gift packaging or within a satchel/plastic packaging bag.
Most services will only repack or consolidate packages if it's likely to achieve a significant reduction in shipping costs
Some of the other freight-forwarding services we looked at had similar restrictions on repacking fragile or oversized items but most had no problems repacking leather items, gift-wrapped packages or items within a satchel/plastic packaging bag.
While some services have blanket rules about how much packaging they remove, Shipito leaves the decision up to the consumer, allowing them to choose to keep the outside box, the inner packaging or just the item itself.
What if the store won't accept an Australian credit card?
Not only do some US retail websites refuse to post to non-US addresses, some will refuse payment from non-US credit cards too.
For a fee, some freight-forwarding services can make a purchase on your behalf. This service goes by a variety of names, such as Assisted Purchase (Shipito) and BuyForMe (ComGateway and HopShopGo), among others. US to Oz can bid on US eBay or buy US iTunes gift cards for you.
Some companies, like ComGateway, let you search for products and brands via their site, so you know you're already shopping with participating retailers.
What if something goes wrong?
If you're not happy with the service provided by a freight forwarding company, the first step is to contact the provider directly to try to seek a remedy and resolve the issue. You can use the ACCC's complaint letter tool to draft a letter or email to the company. If this is unsuccessful, the next step will depend on whether the company is based in Australia or overseas.
Companies based in the US are required to comply with US consumer protection laws as well as Australian Consumer Law. You can contact the US consumer protection agency, the Federal Trade Commission, to see if they can help resolve the dispute. While these companies are bound by Australian Consumer Law, it can be more difficult to enforce your consumer rights with overseas companies. However you can also try contacting your local state and territory consumer protection agency to ask for assistance resolving the dispute.
ShopMate is based in Australia, meaning it should be easier to seek a remedy through your local state and territory consumer protection agency.
You can also try asking your bank for a chargeback (a reversal of the charge on your credit card) or if you've used a third-party payment service like PayPal you can try lodging a dispute to get a refund.
How has COVID-19 impacted US freight forwarding?
While freight forwarding services are still up and running during the COVID-19 pandemic, customers should expect delays and, in some cases, extra fees.
Delays are caused by a number of factors:
- Delays from US stores sending packages out
- Freight forwarders taking extra safety precautions, with some introducing 24–72-hour quarantine periods for packages they receive to their warehouse
- Shipping delays from some US postal carriers
- Australia Post implementing precautionary measures on all inbound parcels.
ComGateway is also charging customers a 7% "crisis delivery surcharge", while other providers note that customers will need to pay return shipping fees for packages that are undeliverable due to a COVID-19 related issue.
Australia Post launched its own freight-forwarding service, ShopMate, in November 2014. While we were pleased to see Australia Post getting in on the freight-forwarding game, in 2015 a number of CHOICE readers told us they weren't happy with ShopMate's service – so we decided to take a closer look.
Customer service criticism
The Postal Industry Ombudsman's office received 83 complaints about ShopMate in 2014–15 (out of a total 5600 complaints about Australia Post and private postal operators). Many of the complaints were during the peak Christmas period, not long after ShopMate launched, and most were in relation to delays and call centre wait times. Other gripes were about shipping charges, package dimension calculations and size limits.
Complaints about ShopMate have decreased significantly … however it's reputation doesn't seem to have improved
While most freight-forwarding services use couriers like FedEx, UPS or DHL, ShopMate operates through the US and Australian postal services, so it's not all that surprising that there were some complaints about slow service and missing packages. Couriers generally offer faster and more secure delivery than traditional mail.
Since its launch, complaints about ShopMate have decreased significantly – down to 10 complaints in 2019–20.
However, ShopMate's reputation doesn't seem to have improved, with many customers still taking to online review sites to criticise the service.
In its infancy, one common complaint about ShopMate was its lack of a consolidation service. Some customers were hit with unexpectedly high shipping bills when US retailers sent their items in separate packages.
When CHOICE reader Louise from South Australia ordered 2.9kg of clothing from US retailer Banana Republic in 2015, she calculated the freight forwarding to cost $52.65 based on ShopMate's charges of $22.95 per parcel, plus an additional $4.95 per 500g – but her actual bill came to over $120.
"It turns out that the retailer sent my order in four separate packages even though it was ordered and paid in one transaction. As a result, each package attracted the $22.95 charge and each package was charged a minimum of 500g. One package contained one pair of socks, valued at $US4. In the end I paid the extortionate postage for most of my items. The socks missed out. I won't be using ShopMate again."
ShopMate now offers a consolidation service for a fee
ShopMate has remedied this by offering a consolidation service for a fee. But the catch is they'll only consolidate packages from the same retailer – so you can't combine shoes from one retailer with a book from another, for instance. For parcels from different retailers, ShopMate offers a bundling discount. You pay the full fee for the first package, then receive an $8.25 discount per subsequent packages.
All of the other freight-forwarding companies we looked at for this article can consolidate packages from different retailers either for free or for a fee, which is likely to reduce the overall shipping bill.
Cubic weight vs actual weight
When calculating shipping charges, ShopMate measures the cubic weight (also known as volumetric or dimensional weight) and the actual weight of your parcel, and charges for whichever measurement is greater. This is standard practice for most postal and courier services.
To measure a parcel's weight in cubic centimetres, ShopMate uses the formula height x length x width ÷ 6000.
For example, a pair of lightweight running shoes might weigh only half a kilo – but if they come in a standard shoe box measuring 35 x 25 x 12cm, their cubic weight will be 1.75kg. Odd-shaped packages can cause even bigger price shocks.
There are dozens of companies all over the world offering similar services to ShopMate. We looked at some of the main players shipping from the US to Australia.
Note: Prices and details correct as at August 2020. All dollar amounts are in US dollars unless otherwise specified.