Cross-border logistics: a crowded feast

Last year shipping started to jam, this year even the railways have started to jam. Later, some e-commerce customers were afraid of railways." On September 23, at the 16th China (Shenzhen) International Logistics and Supply Chain Expo held in Shenzhen, a cross-border logistics company said to reporters.

Since the outbreak, cross-border logistics has become hot due to the rapid growth of cross-border e-commerce demand. In this year's fair, nearly 2,000 enterprises attended. The reporter observed that cross-border logistics enterprises accounted for a large part of them.

Cross-border logistics: a crowded feast

And just about every cross-border logistics company here lists their businesses as FBA (FulfillmentbyAmazon) on their brochures. For example, "American AND Canadian FBA", "European FBA" or "Japanese FBA", etc. FBA means that sellers send their inventory of products sold on Amazon directly to amazon's warehouse in the local market. After customers place orders, Amazon provides follow-up terminal delivery services. In other words, the cross-border logistics company in China is responsible for the logistics and transportation before entering the warehouse of Amazon's platform abroad.

Some time ago, it was reported that Amazon closed a large number of stores due to violations by sellers. Yang Bingxuan, head of the exhibition at Guangdong Lianyu Logistics, told reporters that some customers were indeed affected by the store closures, but their freight business was quickly replaced by new stores.

Due to the epidemic and the rapid increase in cross-border transport demand, there have been frequent reports of congestion at overseas ports. Cargo ships line up outside the port and containers pile up inside. At the exhibition, some of the cross-border logistics enterprises at the scene of the exhibition staff said to reporters that the company "has channels, can find the cabinet, time guarantee." However, there are also interviewed enterprises told reporters, now want to freight to the overseas generally not easy.

Congested and expensive shipping

According to Yang Bingxuan, Lianyu Logistics mainly deals with FBA in the United States and Japan, and delivers goods from domestic warehouses to amazon's overseas platform warehouses, including customs clearance, shipping, customs clearance and transportation. The company has warehouses in south, east and north China. This year, Lianyu logistics began to do Mexican routes, but so far there are few, mostly goods destined for the United States.

Yang Bingxuan told reporters that since the epidemic, the entire industry freight rates are maintaining a rising trend. Shipping rates are now 8 to 10 times higher than they were before the pandemic. A Matson cabinet used to cost about $3,000, now it's $40,000. (Matson Lines, a trans-Pacific container liner service, is the fastest ship from China to the United States.) On the one hand, due to the impact of the epidemic in the United States, many containers cannot be shipped back, so there is a shortage of space, which is part of the reason for the price increase. Another reason is related to freight forwarding companies, freight forwarding companies are layer by layer of reselling, after the middle through several layers, the cost rose.

Reporters also observed that in addition to logistics companies, there are a large number of freight forwarding companies. "Positions to the U.S. are very tight right now. However, it is also divided into different channels. If customers choose high-priced channels, they can guarantee 11-16 working days to arrive." Yang bingxuan said.

Yang bingxuan believes that shipping costs now account for a large part of amazon store owners' costs. For sellers, logistics costs that might have been 20 per cent before are now 30-40 per cent. Therefore, the price is one of the most critical factors when the seller chooses the logistics company. But sellers will also pursue timeliness, which depends on how the seller balances the cost.

In addition, the long transportation chain also increases the cost and time of transportation. Shipping routes to Amazon warehouses in the United States include the first and second routes. "The first journey is from China to the overseas wharf, and the second journey is from the wharf to the company's overseas warehouse, and then to the destination. It can be understood that the first leg is from China to the U.S. and the second leg is from the U.S. mainland." Yang Bingxuan introduction.

Reporter observed, a part of logistics can be responsible for the whole process of transportation, and some only responsible for the first or two. According to a logistics company salesman, the United States part of the logistics cost is relatively high, and even more expensive than part of the cost of shipping, part of the reason is that foreign logistics is not developed at home. In addition, before entering Amazon's platform warehouse, one needs to enter the overseas warehouse of the logistics company. Due to the cost and foreign warehouse construction restrictions, not all logistics companies can build their own overseas warehouses in foreign countries. "From the point of view of the moment, the increase in shipping prices will continue for a while, and will not be resolved in the short term." Yang Bingxuan said.

Matson's cargo ships have been piling up at American ports recently. There were even freight forwarding companies that released information that Matson would stop operating ningbo port, which matson officials later denied, saying that this was due to normal route adjustment and temporary cancellation.

It is reported that the Matson channel of Sino-US shipping is divided into east, China and West. Before the epidemic, the corresponding prices were 7, 8 and 9 yuan per kilogram. Now it has risen to 25, 26, 27, and even 28, 29, 30.

Matson owns its own port, which is one reason why matson is faster than other ships. However, Shenzhen Huitian International Logistics Limited company sales Zhang Liang told reporters that The United States in Los Angeles port has been basically paralyzed. Unloading ships and loading containers in Los Angeles is now very slow. It used to take two or three days after arriving at the port to take the containers to the warehouse, but now it takes at least 10 to 15 days. So instead of unloading the cargo in Los Angeles via Matson, Mr. Zhang's company unloaded the cargo at a port in Long Beach, next to Los Angeles.

Back to land?

The only way to get to America is by congested sea or expensive air, while central Europe offers overland options. Faced with crowded European ports, e-commerce customers in Europe are now more likely to opt for rail and airlines, logistics companies said. The airline is actually trucking, but logistics companies say it has "the timeliness and stability of air transport".

A clerk of some Central Europe logistics company tells a reporter, card navigation is a bit more expensive than a train now, but the prescription of the railway is not so good, card navigation to Germany is basically 25 days or so, but the railway can be limited by the time of the hair class. The floods in Germany the last couple of months flooded the railways a lot. Now apart from air freight, the fastest is Calgary airlines. The company has its own truck team at home, but when it travels abroad, it changes trucks.

The salesman introduced, their company will start from Shenzhen to Xinjiang, in the border after the car into the foreign country, on the way through Basakstan, Belarus, Poland, finally to Germany. There are three commonly used border crossings: Alashankou, Horgos, Baktu. Alashan pass is blocked all the year round. At present, the best pass is Baktu Pass. It takes only 2-3 days to go out, while Ala Pass takes at least a week.

Zhao Meng is in charge of the Shenzhen station of Ouhua International Logistics Technology co., which also does china-Europe transportation, with an emphasis on the China-Europe freight trains. More than 90% of DLA Piper's goods are also from cross-border e-commerce sellers. "Dla Piper started operations in 2018, when there were fewer teams, maybe six people in the initial team. In 2019, we started to set up offices in East China, including Jiangsu, Shanghai, Ningbo and Yiwu. This year, we also started to set up offices in Xiamen. In south China, we also set up offices in Guangzhou, Shenzhen and Zhongshan. Now it has grown to close to 300." Zhao Meng told reporters.

Each station of DLA Piper can be loaded with containers, and then the container is shipped to Chongqing and Chengdu, where customs clearance is made and freight trains are opened for Europe. "We have tested it in all the originating stations around the country, like one or two cabinets to test the aging. If this place works, then figure out in which quarter. We will focus on starting when the time limit is guaranteed. In the end, we found that Chongqing and Chengdu are the most stable, and the customs declaration is also the simplest. Alashan pass and Horgos are the two ports we often go to. Like Manzhouli, Erlianhot these operations before, because of immature cut. During the testing process, we cut the lines when we find them unstable." Zhao said au.

Zhao meng told reporters, "The China-Europe freight train used to run every day, but during the epidemic, it runs at least three or four times a week, so you need to book space on the platform through the platform company in advance. Railway is faster than sea but slower than air. Now the price is about the same as sea freight, lower than air freight 2, 3 times, even 3, 4 times. More importantly, the ports were blocked during the epidemic, so the cabinets were blocked at the docks. One of the best channels for customers is rail, which cuts across the continent."

The problem with land transport, however, compared with sea transport, is that it passes through different countries, and if one part of the route goes wrong in any one country, the whole route goes wrong. Zhao meng told reporters: "Unfortunately, some time ago, the section of the railway line from Brest to Poland broke down and was under repair for about 10 or 20 days. But in the maintenance, the train still kept running there, resulting in congestion. This section of Brest is a main road used by the China-Europe freight train."

Zhao said the congestion could last until mid-October. It will be relieved after the middle of October, by which time it will be able to resume normal aging, that is, it will arrive in Europe within 40 days.

In addition, the reporter also learned from several China-Europe logistics companies that the Belarus part of the china-Europe route has also been delayed due to the inspection of goods. In this regard, zhao Meng revealed that Belarus there found some goods low declaration. This is mainly because some companies in order to avoid tax, resulting in extended inspection time. "That's because some logistics companies are not professional in doing materials. We often contact with e-commerce logistics, some of the things they do are familiar to us. When you look at it, we know how much you should declare and how much it can fit in a box. If we find any discrepancies in their declaration, we will correct them in a timely manner. Of course, there are times when you can't see, but it's very rare." Zhao said au.

When it comes to the risk of logistics delay, Zhao Meng believes that the seller's declaration of the number of products, the accuracy of the product name must be high. If there are no problems, customs declaration and clearance are very simple. However, if there is a low declaration, or inconsistent product name, will cause delays.

Zhao Meng introduced, because of the congestion of the railway, card airline has now become the first choice of customers. However, as the truck needs to be changed at the border, foreign cars need to be booked in advance. "The truck company we choose to cooperate with has good foreign resources and strength, and they help us transport to the customs clearance port. After customs clearance in Hungary, he helped us deliver the largest transit warehouse in Germany and then distribute."

After September, zhao's company will start to deal with year-end holiday shipments, such as Halloween, Christmas and Black Friday. Some e-commerce products are sold just in time for that season. If the goods are sent by sea or railway, they are usually delivered two months in advance. For example, for Christmas on December 25th, the goods should be delivered at least before December 10th.

Superficial prosperity?

Although cross-border logistics is very hot at present, but part of the logistics enterprise exhibitors told reporters that this prosperity is "superficial", in fact, can make money is not much.

For example, Xiao Weipeng, sales manager of Shenzhen Yuehai South China Logistics Co., LTD., told reporters that the competition among cross-border logistics companies is fierce and they are all grabbing the market. Unlike domestic logistics, which is almost monopolized by several companies, cross-border logistics has a large number of small and medium-sized enterprises participating in the competition. In addition, whether an enterprise has the ability to build its own overseas warehouses is also the key to the profitability of cross-border logistics companies.

"I talk to dozens of clients a day, but sometimes none of them actually sign a contract. With logistics so expensive, e-commerce customers are constantly looking for cheaper ways." Xiao Weipeng said.

According to many companies, the current surge in freight rates is behind the accumulation of goods on the road. Logistics companies do not benefit much from this because congestion also imposes high costs on them. Zhao meng told reporters that shipping now makes no money on the one hand because of inspection and delays, and may require the payment of customs duties. In terms of railways and airlines, many companies are now even shutting down operations because their trains can't get out.

A dedicated Japanese line company clerk told reporters, now because of fierce competition in Europe and the United States line, some logistics companies began to do Japanese transport. However, although there is little competition from Japanese lines, there is little growth in goods demand for Japanese e-commerce. Its shipments to Japan dropped significantly after the Olympics.

"Unlike online, which is thriving in China, offline has always been important in Japan, where e-commerce is not as hot as it is in China." The salesman said.

Other cross-border logistics companies are turning their attention to the Middle East. A Middle East FBA enterprise exhibition staff told reporters that their company is mainly facing Qatar, Saudi Arabia, Dubai and other Middle East countries. "These countries have oil and money, they don't have much other industry, they are lazy." The salesman said with a smile.

Leave a Comment

Shopping Cart