The Los Angeles wildfire has become the fuse for the collective bankruptcy of cross-border sellers

In early 2025, wildfires broke out in Los Angeles, California, and now it has turned into a sea of ​​fire. Since the wildfires broke out, they have evolved from one small fire to six large fire sources, with a burned area of ​​more than 38,600 acres. The scenes of houses and shops being burned frequently appear in the news, which is very sad.

Judging from the aerial photos provided by CNN, the fire almost burned down all the buildings in many areas of Los Angeles.

This fire has been a concern for many cross-border sellers. According to cross-border logistics data, the order volume in the western United States dropped by about 30% within a week after the fire. Many Amazon sellers are facing huge losses and are even expected to go bankrupt.

Wildfire spreads, cargo damaged

Los Angeles is a major logistics hub for cross-border e-commerce, with many Amazon FBA warehouses, third-party logistics (3PL) and sellers’ overseas warehouses concentrated in this area. This sudden fire not only burned down some warehouses, but also caused a large amount of damage to goods.

Therefore, once the fire spreads to the storage area, it is not just the warehouse operators who suffer, cross-border sellers are also direct victims.

Cross-border Know has learned that the severe wildfires in Los Angeles, California have caused the emergency closure of many Amazon warehouses. According to reports, warehouses such as LBG8 and LAX9 have suspended operations due to power outages, affecting cross-border logistics and Amazon's warehousing process.

As we all know, the LGB8 warehouse is crucial to Chinese Amazon sellers. Once the fire cannot be contained, the sellers' goods stored here are likely to be burned, which will have a huge impact on the sellers.

A seller said that he had stored goods worth about $100,000 for several months in this warehouse, but now they were gone in an instant, causing heavy losses.

There are also sellers who said that not only Amazon’s warehouses were severely affected, but their own overseas warehouses also had their inventory burned to ashes due to fires. How tragic is that?

According to Cross-border Knowledge, the fire has affected the inventory of thousands of sellers and may cause a "out-of-stock wave" to sweep across Amazon's US region.

According to SmartSupplyChainInc, as of January 8, Amazon warehouses such as SWF2, RFD2, SMF3, FTW1, FAT2, MIT2, GEU3, IUSP, TEB9, and MQJ1 have stopped accepting contracts . The rejection rate of warehouses such as MCO2, SNA4, and XLX1 is as high as 90% . Warehouses such as IAH3, MCE1, SCK4, ONT8, XLX6, and RMN3 will approve contracts after 3 weeks or even a month .

In addition, Los Angeles is one of the largest logistics and warehousing hubs in the United States. As an important transportation hub for logistics in the western United States, it undertakes a large amount of cargo transshipment tasks. Due to the severity of the fire, there were serious fire spots around the Port of Long Beach , one of the main ports in the western United States, and traffic was blocked. The timeliness of picking up containers at the terminal and truck delivery was delayed.

The chain reaction caused by the wildfires has prevented many orders from being delivered on time, and Amazon's "delayed delivery penalty" will make things worse for sellers. If the order delay or cancellation rate is too high, the "ODR (order defect rate)" of Amazon stores will soar, and the account will be restricted or closed, and the funds will be frozen. In this case, cross-border sellers are very likely to lose their most important sales channels and even go bankrupt.

According to cross-border logistics data, cross-border order volume in the western United States fell by about 30% within a week after the fire.

A seller told Cross-border Knowledge that he thought it was fine if the goods were burned, as he could get compensation from Amazon without having to sell them . However, Amazon had just changed the compensation rules for lost goods, and the compensation standard was no longer calculated based on the sales price, but the purchase price, and in the end, only a very low amount might be paid. Therefore, if the goods were really burned, the seller would face huge losses and be helpless.

JPMorgan Chase estimates that insurance claims losses from the wildfire could exceed $20 billion, far exceeding the $12.5 billion from the Camp Fire in 2018.

Faced with this sudden disaster, affected sellers also need to remain calm and make new real-time assessments and decisions on inventory, sales and logistics risks based on the development trend of the fire and logistics dynamics.

Risks are everywhere

Wildfires are raging in the western United States, while the central and eastern United States are experiencing a winter storm called "Blair", which inevitably brings serious transportation and logistics challenges.

FedEx, UPS and the United States Postal Service have all issued reminders that due to heavy snow and road closures, traffic in Missouri (MO), Indiana (IN), Illinois (IL) and other places has been almost paralyzed, and many major roads have been forced to close . The storm caused some appointments in the central and eastern United States to be postponed or canceled between January 4 and January 6.

In terms of logistics, the delivery time of many important warehouses has been affected to varying degrees. Warehouses such as AVP1, MQJ1, IND9, ORF2, SWF2, STL4, MDW2, FWA4, and ORD2 are all facing delivery delays . Due to road closures and traffic disruptions, the efficiency of cargo transportation and delivery has dropped significantly, causing considerable trouble for logistics companies and customers.

In addition, the storm also led to the cancellation and delay of a large number of flights, further exacerbating the difficulties of logistics and transportation . Many flights were unable to take off or land on time, causing the cargo transportation plan to be disrupted and some urgently needed goods could not be delivered to their destinations in time.

It is worth noting that according to FedEx's refund guarantee policy, if the goods are delayed due to the winter storm, no refund or compensation can be processed , and the shipper needs to be prepared to deal with it.

Final Words

To be honest, whether it is a wildfire or a blizzard, such meteorological disasters are not isolated cases. No matter what the cause is, the most important thing for sellers is to stop losses in time. If you can get compensation, that's the best. If not, it will test the seller's flexibility.

In addition, although this disaster has brought many difficulties, it has also inspired sellers to select new products. Sellers need to be keenly aware of market changes, formulate scientific response strategies, innovate product development and marketing methods, and pay attention to copyright issues, find opportunities in crises, and achieve sustained growth and breakthroughs in business.