Data That Delivers

Data That Delivers

Post & Parcel spoke to Martyn Noble, CEO of Hurricane Commerce, a global specialist in cross-border data solutions, about the opportunities available to progressive posts and carriers and some of his own company’s growth plans.

Tell me about the Hurricane story so far?

Hurricane is seven years old this year. The company was specifically created to enable customers to meet the challenges and opportunities that were emerging due to the predicted exponential growth in online shopping and, in particular, cross-border.

Our initial focus was on the provision of a landed cost engine, offering in-cart duty and tax calculation, but our technology and data content quickly evolved. We now cover the four critical pillars of cross-border e-commerce – product classification, duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

The majority of Hurricane’s founders are senior decision-makers within the postal and carrier sector, including DHL, TNT, bpost, PostNL and the International Post Corporation, so we naturally found ourselves gaining traction with some household names including Royal Mail, Australia Post and SEKO.

Since 2016 we have established ourselves as a trusted provider of cross-border data solutions to the postal and carrier sector with our portfolio of customers now also including the likes of Emirates Post, An Post, EVRI, Hong Kong Post, New Zealand Post and Asendia USA.

As with all tech companies, from inception to firm revenue traction your delivery to market evolves over time. In that sense, Hurricane is now firmly anchored in the cross-border data solutions proposition but retaining the early vision of the best depth and breadth in data content, delivered at lightning speed to our clients to improve their flow through ‘bottleneck’ points in import and export processes. This allows for the reduction in the unit cost of their operation and improved efficiency and effectiveness.

What is the current status of cross-border e-commerce?

While the unprecedented level of growth we witnessed during the Covid pandemic has inevitably cooled, the outlook for cross-border e-commerce remains buoyant.

According to a recent report by Vantage Market Research, the global cross-border B2C e-commerce market is projected to reach $3,042.2 Billion by 2028, up from $793.7 Billion in 2021 at a CAGR of 25.1% over the forecast period 2022-2028.

This is backed up by the most current Pitney Bowes Parcel Shipping Index which showed that 159 billion parcels were shipped in 2021, a number forecast to hit 256 billion by 2027.

For postal operators and carriers that have the right strategies in place, the opportunities for growth and profitability are considerable.

What are the key considerations to ensure a successful cross-border strategy?

There are three crucial considerations. Number one is asset utilisation and how you maximise the productivity of your physical assets, whether that’s buildings, line haul vehicles, local collection or delivery vehicles or PUDO networks.

Number two, and now just as important, is having valid and verifiable data throughout the end-to-end supply chain and, particularly, at the customs entry point. A lot of data is poor and, just like the physical parcels themselves, can be handled in the wrong way and cause service failures.

Having the complete, accurate and compliant data means parcels move without friction through customs and on to the end consumer. The wrong data can mean holding charges, the need for manual rectification and, ultimately, delays in the goods reaching the end consumer. With such large volumes involved in global e-commerce, scalability and unit cost efficiency are only possible  by harnessing applied technologies.

The third area of consideration concerns the fiscal flow and the benefits for online retailers and marketplaces able to offer their customers DDP (Delivered Duty Paid). Such a provision offers cost transparency, a proven reduction in cart abandonment and the removal of the doorstep shock for consumers as well as returned goods and inefficiencies in the overall supply chain.

Can you give me an example of how Hurricane’s APIs have made a difference to the flow of parcels?

Yes, a very good example is Hurricane’s partnership with Pro Carrier, the e-commerce logistics expert, and customs software specialist AEB International.

The collaboration between the three companies combines the best in shipping and delivery, data and technology, and customs management processes. It was  developed in response to the heightened restrictions and checks introduced at borders for UK distributors shipping into the EU and those sending products into the UK.

The transformational impact of the partnership has seen the number of Pro Carrier parcels held at customs being reduced from 30% in peak 2021 to less than 1% in peak 2022.

This has enabled Pro Carrier to provide clients with an unmatched assurance of their product arriving on time.

Another example would be the difference our product classification technology has made to a leading postal operator which has been able to improve data accuracy on cross-border shipments from 29% to well over 90%.

This has been a game-changer in terms of our customer meeting the requirements of customs authorities as well as enhancing operational efficiency and customer experience.

A further example involved a potential customer comparing Hurricane’s automated commodity coding capability against its own manual broker service. The broker took 10 working days with a hit rate of 74.3% compared to Hurricane’s two minutes and hit rate of 92%. Following this demonstration of capability, we secured one of our largest customers to date.

What impact is regulatory change having on cross-border e-commerce?

We have seen more regulatory change in the last couple of years than in the previous 20 years.

This has included the fallout from Brexit, the introduction of the EU’s Import One-Stop Shop (IOSS) and the increasing enforcement of the US STOP Act.

Then, in March this year, we saw the implementation of the second release of Import Control System 2 (ICS2). The anecdotal evidence is that the authorities are no longer just baring their teeth but are now starting to bite with shipments being held due to the lack of the correct data sets.

The heightened geo-political tensions of the last year or so, primarily associated with the Ukraine conflict, has further complicated the world of cross-border trade. In the early stages of the Ukraine conflict, our teams were working round the clock to ensure that our data sets covering prohibited and restricted items and denied parties were being updated in real-time.

What role does data play in enabling the sector to meet its sustainability goals?

We spend a lot of time talking to customers about the need for complete and accurate product descriptions, HS6 codes, 10-digit import and export codes and duty and tax calculations. But from a social conscience perspective, it is going to become ever more important to ensure that all data associated with a product is certified and lodged from the origin of that product right the way through its useful life and to its eventual disposal. The circular economy is a huge growth area as more and more consumers and governmental agencies will require data around a particular product and where it is on its particular life cycle.

We already see this with the requirements for ethical trading around the globe, product certification and the repeat inspection of production facilities. All of this relates back to the need for data attached to a particular product.

Technologies like Blockchain will increasingly have an important role to play in helping to improve the transparency of data across the supply chain and a product’s individual life cycle.

Hurricane is constantly expanding its data banks and capability to be able to support in these and other emerging areas such as the movement of illicit and fraudulent goods.

We are also passionate about playing our part in the wider supply chain eco-system, working with other like-minded organisations to provide a more complete set of solutions to enable customers to take full advantage of the enormous opportunities for growth in cross-border e-commerce.

What are Hurricane’s plans for the next 12 months?

We are busy extending several key customer relationships in the postal and carrier sector and onboarding new customers.

In the last few weeks, this has included onboarding Asendia USA which is using Hurricane to ensure cross-border parcels have the correct HS code and can move smoothly through customs.

A further success in the North America market has been the expansion of the services we provide to ePost Global. They started by using our classification tool, but are now preparing to begin offering its e-commerce customers our duty and tax calculator for goods shipped through commercial networks into Canada before rolling out this functionality for worldwide destinations later in 2023.

Our teams are also focussed on growing market share for our solutions in other sectors including retailers, brands, marketplaces, customs brokers, carrier management systems and financial services.

On the research front we are delighted to have been positioned to support a new 3-year research and innovation project PARSEC, funded by the EU’s Horizon program, to provide state-of-the-art compliance and regulatory data.

Hurricane’s technology platform will support the project goals of enhancing detection of illicit goods through postal and courier flows and therefore supporting the logistics industry in ensuring compliance and conformity to regulations.

Do you have any new product innovation?

We are hugely excited to be rolling out a new API which offers all of our functionality around classification, duty and tax calculation and compliance screening, in a single call.

The feedback we have had so far from our pilot customers is that we have created something that is genuinely ground-breaking in our space.

The beauty of this latest Hurricane innovation is that it was developed by our best-in-class tech team through conversations we had had with some of our most trusted customers and partners – a truly collaborative approach.

About Martyn Noble

Martyn is CEO, Chairman and Co-Founder of Hurricane Commerce.

He was one of the six founders of Hurricane in 2016, established to provide its customers with a suite of AI-driven, real-time cross-border data solutions. Hurricane is private equity-backed and employs over 50 people located in the UK, Europe, Asia Pacific and United States.

Prior to setting up Hurricane, Martyn gained vast leadership experience in the corporate and venture capital sector. He has a proven track record of taking businesses from start-up to exit.

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