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As time comes to the last day of September, the countdown to the peak sales season in the second half of the year begins.
However, while sellers are preparing for the battle in full swing, the cross-border logistics, which has been in trouble, has once again brewed a new storm. [Unveiling the cutting-edge traffic logic and facilitating precise delivery, all at the 2024 Amazon New Marketing Conference. Click here to register]
It is learned that according to foreign media reports, the International Longshoremen's Association (ILA) recently announced that workers at 36 ports on the East Coast and Gulf Coast of the United States will go on strike starting October 1.
It is understood that September 30 is the day when the labor-management agreement of the US East Coast ports expires, but the new agreement has not been signed yet. According to the statement released by the union, the strike was caused by workers' dissatisfaction with the wages offered by the United States Maritime Alliance (USMA). The union and the alliance have been negotiating for months on issues such as a 77% wage increase in the next six years and restrictions on port automation without success .
The union stressed: "The United States Maritime Alliance (USMA) refuses to address long-standing wage oppression."
▲ The picture comes from foreign media
It is worth mentioning that this strike involves about 45,000 port workers , and the affected port shipping volume may account for about 60% of the total shipping volume in the United States . This is the first strike at the East Coast ports since 1977 and it is also the largest strike in U.S. history.
Therefore, analysts say that if the strike goes on as scheduled, the closure of 36 ports in the eastern United States may have a serious impact on the US economy and the global supply chain.
On the one hand, the strike will affect port operations, resulting in obstructions to the import and export of goods, serious backlogs and delays . Data shows that if the strike lasts for two weeks, the backlog of goods is expected to be processed until 2025. JPMorgan Chase's analysis predicts that the strike may cause the US economy to lose $5 billion (about 31.5 billion yuan) a day.
On the other hand, the strike at the East Coast ports may cause more cargo transportation to be transferred to the Port of Los Angeles and the Port of Long Beach, resulting in tight capacity at the West Coast ports and additional charges such as congestion fees and demurrage fees , thereby increasing the logistics costs for cross-border sellers exporting goods to the United States .
Recently, some shipping companies have issued notices stating that they will charge port congestion fees from late October.
Sources said that once a strike breaks out, it may take months to return to normal, and it is inevitable that it will have a significant impact on the global supply chain. With Black Friday and Cyber Monday approaching, there may be a large number of orders delayed on the US site, and shipping costs will rise sharply.
This is bad news for sellers on the US site.
However, as of now, it is still unclear whether the strike will actually take place. The International Longshoremen's Association of the United States said that it will announce the latest progress of the negotiations around 11:00 am US time on September 30 (23:00 Beijing time on September 30) .
At present, the most important thing for all cross-border sellers is to successfully warehouse the goods before the Black Friday cut-off date, always pay attention to the transportation track of the goods, and make risk assessments and preventive measures.
In addition, in an economic environment full of uncertainty, sellers on the US site have been praying that the port negotiations will be concluded smoothly as soon as possible, while also keeping a close eye on changes in the US exchange rate.
The international situation is unpredictable, and exchange rate fluctuations are affecting the hearts of people traveling across borders.
It is learned that since the Federal Reserve announced a rate cut on September 18, the RMB exchange rate against the US dollar has continued to strengthen. In the early trading of September 25, the offshore RMB exchange rate against the US dollar even broke through the "7" mark , reaching a new high since May 2023.
▲ The picture comes from the cross-border seller navigation As of 12:00 on September 30, the RMB exchange rate against the U.S. dollar rebounded to 7.0126.
For cross-border sellers, the continued strengthening of the RMB against the US dollar means that profits will shrink when they are converted into foreign exchange . Therefore, in recent times, the change in the US dollar exchange rate has once again become the focus of cross-border sellers: "The freight costs have increased, the exchange rate has fallen, and the profit margins have been squeezed. In the end, we sellers are the only ones who are hurt." "I saved for a long time, waiting for the US dollar exchange rate to rise, but then the interest rate was cut, so I quickly withdrew it."
According to feedback from the industry, some sellers have lost some profits as a result: "I feel really disappointed. 20% of the profit was eaten up directly..." "I quoted an exchange rate of 7.25 for an order of $100,000, but it was settled at 7.04, which meant I lost $20,000 in profit in one fell swoop." "For our 1 million USD order, our profit was 280,000 USD less when we converted the currency into RMB."
Judging from the current situation, the expectation of the Fed's interest rate cut has been continuously strengthened in recent weeks. Some industry insiders believe that the Fed may continue to cut interest rates at the end of this year, and the US dollar exchange rate may return to the "6-beginning era", which is undoubtedly bad news for sellers on the US site.
Faced with such a falling exchange rate situation, some sellers on the US site are increasingly calling for price increases, but some sellers are also worried that raising prices at this time close to Black Friday and Cyber Monday will affect the sales of big promotions. [Unveiling the cutting-edge traffic logic and helping with precise delivery, all at the 2024 Amazon New Marketing Conference. Click here to register]
Adobe's new forecast report on holiday shopping behavior in 2024 shows that despite the depreciation of the US dollar, American consumers' enthusiasm for shopping during this year's holiday continues to rise . It is expected that from November 1 to December 31, US online sales will reach US$240.8 billion, a year-on-year increase of 8.4%, significantly higher than 4.9% in the same period of 2023.
However, it is worth mentioning that under the current turbulent international situation, the trend of the US dollar exchange rate is still unpredictable. For cross-border sellers, the top priority is to prepare for the peak season.
What do you think about this? Welcome to discuss in the comment area~
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