The first half of 2022 cross-border logistics can not see the peak season, how to deal with?

After rising for two years, foreign trade dividends of export e-commerce enterprises promoted by the epidemic peaked and are now entering a trough. Just like the stock market, when there is a bull market, there must be a bear market.

At present, the cross-border logistics industry is moving towards a bear market from the bull market of the past two years. So in the bear market stage, different types, different size of the enterprise how to deal with?

1. In the first half of 2022, there is a high probability that the peak season will not come

According to the experience of previous years, March to April is the hot season of FBA Marine cargo preparation. Because a large number of Amazon sellers will choose to prepare their goods by sea two months in advance to the FBA warehouse abroad in order to participate in the Amazon Membership Day promotion around the end of June every year.

But now May is coming, the industry has not seen the FBA shipping frenzy, we are more faced with finding goods, out of stock and other problems. This also reflects from the side, this year amazon sellers for membership day sales are not very good expectations, most of the adoption of cautious stocking strategy.

In addition, many old stores will be closed due to the wave of amazon store closure in 2021. The newly established stores do not have good sales performance, and the order growth is slow, which is another reason why there is not a large number of FBA stock at present.

In addition to FBA, special line bags, overseas warehouses and other enterprises are also in a state of shortage, some overseas warehouse enterprises even began to take the method of head delivery or free warehouse rent to try to revive overseas idle storage resources.

The 2022 peak season is likely to start in September, the traditional peak season for foreign trade. Therefore, before September, all enterprises in the industry will face the off-season, and enterprises need to make some strategic adjustments according to the market.

2. Reduce business, strategic and project losses

Around the Spring Festival of 2022, some enterprises signed contracts with shipping companies and airlines to obtain some cabinets and shipping space resources, but the prices they signed were basically based on the market expectations of shipping companies and airlines over the past two years.

For example, the cost of signing contracts with airlines for European routes is about 30-40 yuan/kg, and the cost of signing contracts for American routes is at least 50-60 yuan/kg. When signing contracts with shipping companies, the average container of ships on the European and American routes reaches 7000-8000 DOLLARS, and the container of clippers generally reaches tens of thousands of dollars.

However, these upstream contract prices for the first quarter of this year or even the first half of the freight forwarding enterprises are out of stock, is the need to lose money to complete the contract quantity of goods task.

Therefore, the enterprise should reduce the business, strategic and project losses as far as possible, rationally evaluate the contract price and cargo volume terms with the upstream transport terminal enterprises, and avoid the expansion of periodic losses.

3, large enterprises “slim down”, small enterprises appropriate “lie flat”

In the past two years, thanks to the “epidemic dividend”, many small enterprises in the industry have become “large enterprises”, opening many branches, expanding the size of the team, increasing overseas infrastructure, mergers and acquisitions of downstream enterprises, etc., so the monthly fixed costs are relatively high at present.

At present, large enterprises should take the initiative to reduce costs and increase efficiency, promote organizational reform, optimize talent structure and pay more attention to results orientation. A large number of employees does not mean high efficiency and output. Large enterprises should properly “slim down” and carry out optimization and reform within the organization.

At present, there are also many small enterprises in the cross-border logistics market, which can be divided into two situations:

The first is companies that profit from reselling transport resources during the pandemic.

In the first half of 2022, there are fewer opportunities for companies to profit from the scalping of capacity resources. If the enterprise personnel is not much, you can choose the appropriate “lie flat”, the strategy should be less toss, save strength, perhaps to the second half of the peak season, resources and capacity will be used again.

The second is to do direct customer business, not too many resources of the enterprise. There is not much capital to “lie flat”. Industry volume, the “remaining” is king, try to maintain the company’s reasonable cash flow, endure to the latter half of the year or September, looking forward to the stage turning point of the market.

4, the industry ushered in the golden window period of integration and merger

Whether the industry is in a low season or a high season, someone will make money. In the past two years, many companies in the industry have made good profits. Now just in the industry phased dividend ebb, the valuation of many enterprises should gradually return to a more reasonable level.

The high profits and revenues during the epidemic have led many enterprises to expect too much of themselves and mistakenly equate “earning effect” with “earning power”. Quick money earned by asymmetric information resources during the epidemic does not mean that an enterprise has the ability to make money in the long run. These are two completely different concepts.

Therefore, after the epidemic in the first half of 2022, the economic and industrial market reversal, many enterprises have gradually become sober and have a clearer understanding of their team’s core capabilities and the company’s core resources.

In this context, in the next 1-2 years, the window period for industry integration and merger will gradually come, and enterprise integration and merger events will continue to increase.

During the epidemic period, enterprises that have made a lot of profits can gradually improve the business links that they are not good at before but want to do by means of integration and merger.

Large enterprises racing enclosure, small enterprises vertical deep cultivation

Based on the arrival of the industry integration and merger window period, some large enterprises with strength and capital will start to circle the land, in the core node of the industry through integration and merger of the way to block the core resources.

Small enterprises vertical deep subdivision of professional fields, will maintain a moderate scale, prudent management in the first place. Long-term development is expected when the customer group has no problems, the team size is moderate, the people efficiency is relatively high, and the cash flow is healthy.

6. Maintain long-term optimism about the development trend of the industry

The first half of 2022 cross-border logistics can not see the peak season, how to deal with?

Although the dividends of cross-border e-commerce and logistics brought by the epidemic are gradually fading in China, cross-border e-commerce and logistics are still developing in other countries and regions.

Due to the huge differences in network, payment, logistics and other infrastructure in many foreign countries, as well as the continuous emergence of new platforms, dividends of cross-border e-commerce and cross-border logistics will continue to emerge in different forms in different countries, regions and platforms in the next few years.

Cross-border logistics has a long chain and a wide market. Changes in the international situation, political and economic patterns, industrial policies and other factors will bring periodic and regional dividends to the industry.

Therefore, we do not need to be too pessimistic about the future development of the industry. The dividends of cross-border e-commerce and logistics industry will remain a long-term trend in the next 5-10 years. In the short term, what companies need to do is to consider how to develop soundly.

In the long run, enterprises need to practice the internal strength of team professional capacity construction, carry out long-term strategic investment layout of resources, and lay a solid foundation for long-term development in the future.

Focus on production in busy time and training in idle time. The core management of the enterprise should have a clearer understanding of team development. When we choose to carry out long-term strategic layout around the industry development opportunities in the next 5-10 years, we will not feel pessimistic and depressed because of the ebb tide of periodic dividends in the industry in the short term.

Take a broad view of the future, keep optimistic about the industry for a long time, can rationally face the current temporary gains and losses!

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