Why cross-border logistics problems

August’s foreign trade data gave the world a glimpse of the resilience and resilience of the Chinese economy. Behind this bright report card, it is the result of the joint action of internal and external factors. China has taken effective measures to combat THE COVID-19 outbreak, taking the lead in resuming work and production, and has a strong industrial and supply chain. When the overseas market demand gradually picked up, the market supply gap, for the first “slow down” to Chinese enterprises, it is a good opportunity.

Since this year, the central and local governments issued a series of measures to the foreign trade, from the value-added tax and consumption tax exemption policy on a trial basis, to improve the pay agency cross-border single transactions of foreign exchange to pay limits, simplifying procedures of small micro cross-border electricity goods trade balance, encourage the establishment of various cloud exhibition, etc., these powerful measures to alleviate the foreign trade enterprises have difficulty in capital, qualification, help them faster “h.” resurrection.

However, from the perspective of practice, the current measures to stabilize foreign trade mainly focus on domestic, and foreign trade enterprises have many links and long chains, the challenge outside the country is more severe. In the interview, foreign trade enterprises reported to the reporter that the most intense problem is cross-border logistics, international freight soaring, insurance premium increases, transportation time is not guaranteed, they feel that this is the most “neck” link. In particular, the rise of cross-border e-commerce has brought two new problems. First, micro, small and medium-sized enterprises are the main players of cross-border e-commerce. It is normal for cross-border e-commerce to have weak risk resistance and tight capital chain, and it is difficult to obtain fresh water irrigation from financial institutions. Second, compared with traditional TOB foreign trade orders, the number of packages in cross-border e-commerce is more scattered and needs to be delivered to individual consumers, resulting in higher logistics costs and more complex links.

Why cross-border logistics problems

In China, due to the rapid development of e-commerce, logistics networks and express delivery companies developed around e-commerce platforms have well solved the terminal delivery problem of consumers, and Chinese consumers have been accustomed to “free delivery”. But overseas, logistics is far less smooth than at home.

According to international logistics experts, at present, overseas individual consumers in the destination of logistics distribution is still mainly postal. The postal systems of various countries are not customized for cross-border logistics. The massive increase in the number of parcels has led to the soaring costs of postal systems in various countries. They have raised their prices for many times, increasing by more than 150% in four years. This is the root cause of rising cross-border logistics prices. The reduction of transport capacity and breakdown of the system brought about by the epidemic have further increased the uncertainty of transport. The direct reaction is the soaring freight costs, which have even doubled several times in some areas.

Some experts predict that as more countries resume work and production, the substitution effect of China’s exports to other countries and its export market share may return to normal. At that time, the competition will be cost, logistics, quality, service and other hard indicators. Helping foreign trade enterprises to reduce logistics costs and get through logistics barriers has become a top priority.

Why cross-border logistics problems

At present, most small and medium-sized foreign trade merchants rely on the international logistics backbone network led by Cainiao to deliver goods, and the support for merchants mainly comes from the platform. For example, AliExpress and Cainiao jointly provide merchants with support such as 90-day free overseas warehouse rent and logistics subsidy. Based on transaction volume and single volume data, the platforms can provide commission refund and freight subsidy to reduce merchants’ burden. But warehousing still accounts for 20-40 per cent of a merchant’s costs. Obviously, only relying on platform support, drop in the ocean, difficult to last.

In fact, the state has repeatedly proposed to precisely help enterprises and ensure the stability and smooth flow of the international logistics supply chain. How to precisely and specifically subsidize foreign trade merchants according to orders and logistics data, and send the subsidies to the accounts of enterprises that are really engaged in foreign trade and in urgent need of help may be the most urgent problem at present.

At the same time, when international sea and air routes are greatly impacted, China-Europe freight train has become an important carrier for enterprises to undertake air and sea freight transfer. The continuous increase in the number of China-Europe freight trains during the epidemic has become a key to reducing costs and improving timeliness for foreign trade enterprises. Strengthening customs clearance guarantee and increasing the frequency and location of China-Europe freight trains will help diversify the international industrial chain and supply chain and keep the international logistics supply chain smooth.

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