What is cross-border logistics? Cross-border logistics review

Main modes of cross-border e-commerce logistics

The first common type is international parcels and international express.

According to incomplete statistics, 70% of the parcels of China's cross-border e-commerce export business are delivered through the postal system, of which China Post accounts for about 50%. Although the postal network basically covers the world, the transportation time is long and the package loss rate is high.

The second is international express delivery.

It is mainly handled by the four giants UPS, Fedex, DHL, and TNT. International express delivery is fast and provides a good customer experience, but it is expensive. For example, if you use UPS to send a package from China to the United States, it can arrive within 48 hours.

The third type is overseas warehouse.

Sellers first store the goods in overseas warehouses, and then sort, pack and deliver the goods on a large scale according to the order situation. Although this solves the problems of high costs and long delivery cycles in the era of small packages, it also has problems such as easy overstocking and high operation and maintenance costs.

The fourth type is cross-border dedicated logistics.

Generally, the goods are transported abroad by chartering an air cargo cabin, and then delivered within the destination country by a cooperative company. This method reduces costs through economies of scale, but the scope of collection in China is relatively limited, and the coverage area needs to be expanded.

The fifth type is the internationalization service of domestic express delivery.

Both STO and SF Express have made early arrangements in cross-border logistics. However, since they are not focused on cross-border business, the overseas markets they cover are relatively limited.

Features

First, competition is concentrated in the southeastern coastal areas, while there is less competition in the central and western regions.

Due to the developed economy in the southeastern coastal areas such as the Bohai Sea Rim, the Yangtze River Delta, and the Pearl River Delta, there is a strong demand for cross-border transportation, and the relatively complete infrastructure such as sea and air transportation in the region, so the competition for cargo sources and transportation resources is the most intense. In the central and western regions, due to the relatively inactive economy, there is less demand for cross-border transportation, and the transportation cost is higher, so the region has less investment in international freight forwarding service resources.

Second, competition within a region or a single industry is fierce, while cross-regional and cross-industry competition is less.

Although there are many market competitors in the cross-border logistics industry, due to the limitations of their own financial strength, management and technical capabilities, as well as the fragmentation of the national logistics market, the competition is manifested in the competition between companies in a certain regional market, such as the competition between cross-border logistics companies in the Yangtze River Delta region; or the competition for customer resources in a certain industry, such as the competition for customer resources in the electronics manufacturing industry, while there is less cross-regional and cross-industry competition.

Third, the service functions are single, there are few value-added services, and homogeneous competition is more serious.

Most cross-border logistics companies can only provide sea or air logistics services. There are few cross-border logistics companies that can provide multimodal transport (such as sea-air transport) and meet other different needs of customers. When providing cross-border logistics services, they are limited to traditional services such as customs declaration and booking, and provide fewer optimized transportation solution designs and comprehensive logistics services. Therefore, the phenomenon of homogeneous competition is more serious.

References

• 1. Main modes of cross-border e-commerce logistics: China Business Information Network [cited on 2018-03-14T16:00:00.000Z]
• 2. Characteristics of cross-border logistics: Think Tank Encyclopedia [cited on 2018-03-14T16:00:00.000Z]