If cross-border people were asked to summarize all the challenges of "making waves" on the overseas journey in 2023, the increasing costs plus the shrinking profits would surely be an unspeakable pain for most people. Operating costs + logistics costs are like two huge mountains, weighing down the profits of many sellers. The sudden red ocean crisis at the end of the year and the re-staging of Amazon’s must-see program for the new year, "FBA Policy Adjustment" , have made cross-border sellers who have just entered 2024 feel under great pressure. According to feedback from many sellers, Amazon's new policy on FBA shipment entry in the US has changed. According to the official notice, the automatic closing time of shipments will be updated. For shipments created after February 1, 2024, if the shipment is not delivered within 45 days for domestic delivery/75 days for international delivery (originally 90 days), the shipment will be automatically closed. On the other hand, if the shipment does not meet Amazon requirements or does not contain the same inventory as the shipping plan, Amazon will reject the shipment and charge the seller an inbound defect fee to cover the additional costs of re-shipping the products, receiving and processing the shipment. Specifically, the following situations may result in shipment rejection or additional charges: 1. The shipment was delivered to the wrong location: The shipment was sent to a different fulfillment center than the one listed in the shipping plan. 2. Deleted and discarded shipments: - Domestic shipments are not delivered within 45 days of shipment creation and international shipments are not delivered within 75 days of shipment creation.
- In a multi-destination shipment plan, additional shipments are not delivered within 30 days of the first shipment, or a shipment is created as a multi-destination shipment, only some of which are sent and the rest are deleted (deletion).
If a seller wants to change an approved shipping plan, they must delete all shipments that were part of the plan before starting to ship any shipments within the plan. Several key pieces of information can be extracted from this. On the one hand, the automatic closing time of shipments is shortened, and Amazon has set different delivery deadlines for domestic and international shipments. In the past, many sellers often chose to fill in the nearest local address in order to send shipments to popular warehouses. Now that the new policy takes effect, it means that sellers will not be able to modify the address at will. On the other hand, the compliance review of shipments is strengthened. If they do not meet the specifications, they will be rejected and an additional warehousing defect fee will be required. It is worth noting that the previously rampant phenomenon of distant warehouses and nearby delivery has been dealt with. That is, if a shipment is delivered to the wrong location, it will be rejected and a fee will be charged. Some time ago, Amazon's US site issued a notice of changes in sales commissions and logistics fees, imposing a number of fees such as warehousing configuration services, low inventory levels, and return processing. Now it has adjusted the FBA shipment warehousing policy. It is foreseeable that as various new FBA policies come into effect one after another, issues such as rising costs and logistics timeliness will pose new challenges to sellers. In addition to the FBA policy changes, the Red Sea crisis that has been brewing in recent times has also worried many cross-border sellers. According to foreign media reports, sellers and suppliers on e-commerce platforms such as Amazon and Walmart are stepping up detours to avoid the Suez Canal route. Recently, under the military escort of the United States and other countries, the global shipping giant Maersk announced its return to the Red Sea route. However, within just 24 hours, the "MAERSK HANGZHOU" was attacked twice by the Houthi armed forces, which also forced Maersk's resumption plan to press the pause button . As the shortest route connecting Asia and Europe, the Suez Canal is an important hub for cross-border transportation. In 2021, a serious grounding accident in the Suez Canal caused major logistics delays and pushed up freight rates. It is reported that about one-third of the world's container ship cargo uses this trade route. If the ships are diverted to bypass the southern tip of Africa, it is estimated that the fuel cost for each round trip between Asia and northern Europe will increase by an additional US$1 million. According to Kuehne + Nagel data, as of December 27, 2023, nearly 20% of the global container fleet has changed its route due to the Red Sea attack. As the situation continues to escalate, mainstream shipping companies have either temporarily shelved their resumption plans or are still in a wait-and-see phase, which has further exacerbated the uncertainty of the global shipping market. The executive vice president of Swiss shipping logistics Kuehne + Nagel said that the global supply chain will face pressure from a shortage of ship space, empty containers needed for Chinese exports stranded in the wrong location, and a sharp rise in the short-term transport price index, so the biggest impact may come in the next six weeks. It is an indisputable fact that the global supply chain has been damaged and shipping prices have soared. According to data from freight platform Xeneta, after the Red Sea crisis broke out, the cost of shipping a 40-foot container from the Far East to the Mediterranean rose from US$1,865 in early December 2023 to US$2,320. The current situation in the Red Sea is confusing, and there is no sign of a turnaround. Encountering this crisis at the beginning of 2024 will undoubtedly add more challenges to cross-border logistics. I still remember that last year, the once overheated shipping market suddenly cooled down, and the soaring freight rates began to return to normal levels, which to a certain extent reduced the logistics cost burden of many sellers. And if the situation in the Red Sea continues to escalate, once freight rates "return to their peak", they will inevitably turn into a ferocious "money-eating beast" and erode the already meager profits. Due to policy changes and intensified external challenges, cross-border sellers entered "hard mode" at the beginning of 2024. Therefore, timely adjusting operational guidelines and formulating reasonable logistics plans are the key to breaking the current situation.
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