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How to Choose Cross-Border Logistics?

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By Emily Jackson on 21/06/2024
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Cross-border e-commerce
international logistics
overseas warehousing

1. Postal Parcel Mode

The postal network basically covers the world, which is wider than any other logistics channel. This is mainly due to the Universal Postal Union and the Kahala Postal Organization (KPG). The Universal Postal Union is a specialized agency under the United Nations for international postal affairs. It improves international postal services and develops international cooperation in the postal field through some conventions and regulations.

 

Because the Universal Postal Union has many members and the postal systems among member countries are very unevenly developed, it is difficult to promote in-depth postal cooperation among member countries. So in 2002, the postal departments of six countries and regions with relatively developed postal systems (China, the United States, Japan, Australia, South Korea and Hong Kong) held a postal CEO summit in the United States and established the Kahala Postal Organization. Later, Spain and the United Kingdom also joined the organization. The Kahala Organization requires that the delivery time limit of all member countries must meet 98% of the quality standards. If the goods are not delivered to the recipient on the specified date, the operator responsible for delivery must compensate the customer at 100% of the price of the goods. These strict requirements have prompted member countries to deepen cooperation and strive to improve service levels.

 

For example, postal parcels sent from China to the United States can generally arrive within 15 days. According to incomplete statistics, 70% of the parcels of China's cross-border e-commerce exports are delivered through the postal system, of which China Post accounts for about 50%. Other postal services used by Chinese sellers include Hong Kong Post, Singapore Post, etc.

2. International Express Mode

Refers to the four major commercial express giants, namely DHL, TNT, FEDEX and UPS. These international express companies use their own global networks, powerful IT systems and localized services all over the world to bring excellent logistics experience to overseas users who buy Chinese products online.

 

For example, parcels sent to the United States by UPS can arrive within 48 hours at the fastest. However, high-quality services are accompanied by expensive prices. Generally, Chinese merchants only use international commercial express to deliver goods when customers have strong timeliness requirements.

 

3. Domestic Express Mode

Domestic express mainly refers to EMS, SF Express and "Sitong Yida". In terms of cross-border logistics, among the "Four Expresses and One Delivery", STO and YTO were established earlier, but they have only recently started to expand. For example, STO in the United States was launched in March 2014, and YTO only started to cooperate with CJ Korea Express in April 2014, while ZTO, Huitong and Yunda have just started cross-border logistics business.

 

SF Express's international business is more mature. It has opened express delivery services to the United States, Australia, South Korea, Japan, Singapore, Malaysia, Thailand, Vietnam and other countries. Express mail sent to Asian countries can generally be delivered in 2-3 days. Among domestic express delivery, EMS's international business is the most complete. Relying on postal channels, EMS can directly reach more than 60 countries in the world. The cost is lower than that of the four major express giants. The customs clearance capacity in China is very strong. It takes 2-3 days to reach Asian countries and about 5-7 days to Europe and the United States.

 

4. Dedicated Line Logistics Model

Cross-border dedicated line logistics is generally transported to foreign countries by air charter, and then delivered to the destination country through cooperative companies. The advantage of dedicated logistics is that it can concentrate large quantities of goods to a specific country or region, reducing costs through economies of scale. Therefore, its price is generally lower than commercial express delivery. In terms of timeliness, dedicated logistics is slightly slower than commercial express delivery, but much faster than postal parcels. The most common dedicated logistics products on the market are the US dedicated line, European dedicated line, Australian dedicated line, Russian dedicated line, etc., and many logistics companies have also launched the Middle East dedicated line, South American dedicated line, South Africa dedicated line, etc.

 

5. Overseas Warehousing Model

Overseas warehousing service refers to a one-stop control and management service for cross-border sellers to carry out warehousing, sorting, packaging and delivery of goods at the sales destination. To be precise, overseas warehousing should include three parts: first-leg transportation, warehousing management and local distribution.

 

First-leg transportation: Chinese merchants transport goods to overseas warehouses by sea, air, land or combined transport.
Warehousing management: Chinese merchants use logistics information systems to remotely operate overseas warehousing goods and manage inventory in real time.
Local distribution: Overseas warehousing centers deliver goods to customers through local postal or express delivery based on order information.


The above five modes basically cover the current logistics modes and characteristics of cross-border e-commerce, but there are also some "alternatives". For example, although the Belgian Post belongs to the postal parcel mode, it is positioned for high-quality sellers and provides far better products and services than other postal products.

 

For example, the new delivery mode - virtual overseas warehouse, the delivery mode of virtual overseas warehouse is similar to the self-delivery direct mail mode. The only difference is that although the goods are shipped from China, the delivery address shown on the waybill is the United States. This can provide consumers with purchasing confidence to a certain extent and effectively solve the malicious return and exchange behavior of consumers. Of course, by choosing the delivery mode of virtual overseas warehouse, cross-border sellers do not need to stock up in advance, and there is no inventory pressure. For details, please refer directly to the tutorial on how to use virtual overseas warehouse.

 

For cross-border e-commerce sellers, first of all, they should choose the appropriate logistics model based on the characteristics of the products sold (size, safety, customs clearance convenience, etc.). For example, large products (such as furniture) are not suitable for postal parcel channels, but are more suitable for overseas warehouse models; secondly, they should flexibly use different logistics methods during peak and off-seasons. For example, they can use China Post Small Parcel to reduce logistics costs during the off-season, and use Hong Kong Post, Singapore Post or even Belgium Post to ensure timeliness during the peak season or large-scale promotional activities; finally, they should clearly state the characteristics of different logistics methods to buyers before selling, provide buyers with a variety of logistics options, and let buyers choose logistics methods according to their actual needs.

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