Shipping to Chile: An Introduction to a New Market

Submitted by Blog Editor on Mon, 09/24/2018 - 00:00
Shipping to Chile

 

Many companies are considering shipping to Chile, a country that has been an economic star since the 1980s. In today’s post-recession era, the Spanish-speaking nation dominates the west coast of South America and has a broad influence on the economic affairs of the region.

Let’s get to know Chile’s culture and economy and explore some insights into shipping to Chile from the U.S. to ensure that your packages get there on time and on budget.

 

Spotlight on Chile

Chile is perhaps most well-known for its towering mountains, the Andes, which dominate the geography of much of the country; it’s also home to other unique locations like Easter Island. In spite of the rugged terrain and the country’s narrowness (it averages 109 miles east-to-west), Chile has a growing population and a diverse landscape supporting many industries.

 

Much of Chile’s landscape is dominated by the imposing Andes mountain range.
Much of Chile’s landscape is dominated by the imposing Andes mountain range. - Image source

 

Since the 1950s, Chile’s population has tripled to over 18 million people and growing, making it the 62nd most populous country on the planet. Thanks to its mountainous terrain, Chile has densely populated metropolitan areas—in particular, the capital city of Santiago—filled with people from a variety of backgrounds.

Chile’s geography makes it a country rich in many valuable resources, including copper and gold, grapes (and, of course, wine), and fish harvested from its immense coastlines. These resources, along with effective governance, have helped Chile become a political and economic stalwart in the region even during times of turmoil for its neighbors.

Throughout recent history, Chile has been one of the highest-rated democracies in the Western hemisphere, supporting free trade and a global market economy. Such stability has led to transparent governance, low corruption, and a fertile space for business.

It’s also worth noting that Chile has a special history with shipping and communication. Back in the days of the Inca Empire, specially trained runners traversed the treacherous mountain roads in relay style to carry messages and packages over the 18,600 miles of paved roads that connected the Empire. Luckily, modern economics and logistics have made shipping and communications in the country much simpler, leading to a strong economy into which foreign companies may confidently invest their time and resources.

 

Chile’s Economy

Chile’s economy has remained resilient through the last four decades, posting growth consistently even as copper prices fell (one of the main drivers of Chile’s GDP). According to the World Bank, 2018-2020 promises better growth “as private-sector prospects improve and copper prices rise.”

On the global stage, Chile is a strong trading partner for many countries, including China, the U.S., Brazil, and Japan. With free trade agreements between Chile and many of these countries, it has grown to be the 41st largest exporter and 45th largest importer in the world. That means a lot of companies worldwide are already shipping to Chile.

 

Tourism in Chile accounted for 3.3% of the GDP, and is expected to rise in the future.
Tourism in Chile accounted for 3.3% of the GDP, and is expected to rise in the future. - Image source

 

Chile has had a free trade agreement with the U.S. since 2004, and in 2015, Chile declared that all U.S.-origin goods could enter Chile without paying tariffs. While the agreement offers an excellent advantage for cargo imports, it does not apply to e-commerce shipments without accompanying certificate of origin--with the exception of books, which can be processed tax free. The free trade agreement has increased U.S. exports to the country by a whopping 545%, according to export.gov.

Thanks to the strong economy, Chile has one of the highest GDP per capita rates in Latin America, second only to Uruguay. This has led to a dramatic decrease in the portion of the population living in poverty (down from 26% to 7.9% from 2000-2015) and given rise to a larger middle class.

 

Doing Business in Chile

Thanks to its strong democratic values and trade relations, Chile is the most competitive market in Latin America—ranked 33rd overall by the 2017 Global Competitiveness Report.

Still, according to export.gov, Chile’s smaller market size leaves “interesting niche markets and solid opportunities for U.S. exports.” Per the U.S. government’s advice, it’s wise for foreign exporters to find a capable local partner or establish a direct presence in the country to gain entry to the market before shipping to Chile.

The opportunities for exporters will continue to expand as Chilean consumers’ appetite for e-commerce continues to expand. Chile is the fastest-growing e-commerce market in Latin America, with $3.7B in sales in 2017 and 35% growth expected this year. The fast growth of international e-commerce has caught the eye of Chilean lawmakers, though, and the country is considering a new tax on transactions at multinational digital commerce companies with local operations—i.e., Amazon, Spotify, and Uber.

Chile has one of the highest penetration rates of smartphone and internet use (over 72% of the population has access), making the country among the most well-connected in Latin America. But, one element holding back consumer e-commerce is the availability of international credit cards for online purchase, as 71% of Chileans rely on local cards and cash.

While Chile is very open to foreign business, there are some other challenges to be aware of when striking out to do business in the country:

 

Top Industries for Exporters

Whether your company is looking to sell to Chilean consumers through e-commerce platforms or directly to businesses in the region, there are many niche opportunities available. With the right planning and execution, exporters may find an eager market for their products.

According to export.gov, exporters from a wide range of industries may find openings in Chile’s markets, from healthcare, to high-value food products, to agricultural equipment, to automotive parts, among others.

As the standard of living has increased for Chileans, so have their appetites for consumer goods and high-quality foods. Demand for imported foods, for example, has grown 85% over the last few years. Other top imports that are shipping to Chile include vehicles, electronics, and apparel.

 

Shipping to Chile

In the past, shipping to Chile took a long time. Shipments could take up to 60 days, but that time frame has been reduced across the board (SkyPostal’s average shipment window to Chile is 3-5 days). The improved shipping times are largely in response to increased e-commerce demands from consumers.

Like many Latin American countries, Chile’s post and parcel services shine in urban areas while struggling in rural areas. The national post system, Correos de Chile, is affordable but slow and more unreliable than post in more developed countries. Still, Chile has the highest-ranked logistics in Latin America, according to the World Bank.

 

Santiago, Chile’s capital, is a modern city, featuring Latin America’s tallest building.
Santiago, Chile’s capital, is a modern city, featuring Latin America’s tallest building. - Image source

 

Last Mile Delivery

For the best parcel delivery, it’s advisable to tap a reliable courier service. Last mile delays, lost packages, and other headaches are not uncommon with the Chilean national postal service. Modern conveniences like package tracking are also more difficult or non-existent among many of the local couriers in the country.

To provide the best experience for your customers and reduce costs associated with shipping to Chile, choose a logistics provider that can provide integrated tracking, help manage duty payments, and provide returns processing—especially considering that return rates for e-commerce goods can be as high as 30% globally.

 

Navigating Customs

With the exception of agriculture and pet food products, the customs process for shipping to Chile is relatively painless. Here’s what you need to know to get through it.

 

Essential Paperwork

In order to import goods into Chile, businesses must provide:

  • Commercial invoices

  • Certificates of origin

  • Bills of lading

  • Freight insurance

  • Packing lists

  • Special permission and documents for regulated items

  • The consignee’s RUT (Rol Unico Tributario) number, essentially a Tax ID number

  • And, for certain items like food, labels must be written in Spanish

 

Customs Quirks

Chile’s outstanding trade reputation and increasing modernization leaves few quirks for companies to navigate during the customs process.

Many of the things to be aware of depend on what you’re shipping to Chile. For example, “luxury goods” ranging from alcohol to tobacco to new cars are subject to a wide range of taxes, which range from 15% to over 50%.

The de minimis value to avoid taxes and duties on postal shipments sent to Chile is $30. For shipments that exceed $1,000, formal entry is required and these shipments are subject to more taxes and regulations than cheaper products. Finally, imports over $3,500 require special licensing from the Chilean government.

Even when there are no duties thanks to free trade agreements, imported goods are still subject to value added taxes (VAT) of 19%.

 

Resources for Shipping to Chile

Chile’s stellar economic profile, commitment to democracy, and growing middle class make it an ideal place for your business to consider as a new market.

If you’re unfamiliar with the country, export.gov’s Country Commercial Guide will give you a great introduction to help you prepare for shipping to Chile.

Local resources will be a big boon for doing business in the country. Thanks to the country’s protective business culture, shipping to Chile will require your company to develop relationships in the country to succeed. It’s also wise to provide touches like local customer service that will make you competitive against Chilean companies.

With decades of experience shipping to Chile and the rest of Latin America, SkyPostal can provide your business with:

  • The largest private delivery network in Latin America

  • Fully trackable packages

  • Integrated data and tracking management

  • Customs clearance and duty collection

  • Plus much more

 

Contact us today to see why SkyPostal has been trusted for years by some of the world’s largest retailers to make shipping to Chile a reality.