International wire transfers lack a standard method for sending remittance information so payments can be efficiently reconciled and posted once received. Perhaps the largest of these costs stems from missing remittance information. Vendor enablement costs refer to the labor required to collect vendors’ banking and routing information and then keep that information up-to-date and secure. These costs include both vendor enablement costs and error resolution costs. Plus, when sending money via SWIFT, intermediary financial institutions may also charge fees, making your on-paper cost to wire funds even higher.Īs if that weren’t enough, the hidden administrative costs of international wires are also quite high. Considering that the recipient often must also pay a fee, there’s no way to mistake international wires for a low-cost method. Unlike checks, the high costs of international wire transfers are immediately apparent since the average fee for an outgoing international wire is $43. Meanwhile, your freight can’t be released, which means you may miss out on time-sensitive business opportunities. If your courier is late or your payment is delayed for other reasons, shippers risk exceeding their free days at port and incurring demurrage fees of $100-150/day or more. The potential for delays is a high hidden cost of any payment method. Of course, that figure is assuming that all goes well and your check arrives on time. Drewry estimates that it takes between 2-15 minutes to process one invoice and cut a check for small- to medium-sized shippers.Īll that time adds up, which is why it ends up costing around $51/transaction to pay international freight invoices by check (this figure includes courier costs and labor fees). These costs stem from the labor required to print checks, stuff and address envelopes, and deliver checks to couriers, along with the courier fees themselves. That’s bad news for the global freight industry since checks have some of the steepest administrative costs of any payment method. $51/Transaction, Plus Potential for DelaysĪccording to Drewry’s white paper, 28% of global container trade payments are made by check.
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