Air freight prices may rise to 125 yuan/kg. How should sellers prepare goods?

The cross-border e-commerce industry has been through a lot this year, with compliance rectification of third-party platforms, skyrocketing logistics, and fierce price wars throughout the year. The seller group is experiencing this unconventional period.

Among all the unfavorable factors, logistics has the greatest impact: the price of sea freight once exceeded 30 yuan/kg, and the price of air freight was close to 100 yuan/kg. Although the price has doubled, the delivery time is much different from that of last year. No matter whether it is a platform seller or an independent station seller, they can only sigh in despair.

As the epidemic continues, what will be the logistics trend in the future? How should sellers cope with the changing logistics challenges? We interviewed industry insiders on this issue.

Price rises, air freight may rise to 125 yuan/kg

Last year, the market price for shipping was about 10 yuan /kg , and the air freight price was about 40 yuan /kg , and sellers were accustomed to such prices. Until this year, logistics became a "newcomer", refreshing people's perception.

From September to October, the price of Meisen fell briefly before rebounding strongly, with the market price once reaching 35 yuan/kg . Air freight also continued to rise. Due to the reduction of flights and the cancellation of passenger-to-cargo flights, the price of air freight to the United States rose to 80 or 90 yuan per kilogram, and some quotations exceeded 90 yuan/kg. The express price also reached 80 yuan/kg.

At the same time, the efficiency of logistics channels such as sea, air and rail has been comprehensively downgraded, and cross-border logistics has faced a major test.

Wu Yuxin, East China Business Director of Lotte International Express, said that there are two ways of air delivery : direct delivery and overseas warehouse delivery. Specifically, sellers use more special parcels from the United States, Canada and Brazil, and the cost of air transportation is higher than that of express delivery. Taking Canada as an example, the current price of DHL is about 80 yuan/kg, but it does not solve the tariff; while the price of air transportation has reached 110 yuan /kg, and the same is true for UPS channels.

For the United States, the air freight price from China to the west coast of the United States is 90 yuan/kg, and the price to the east coast of the United States is 110 yuan/kg. The reason is that due to the impact of the epidemic, many passenger-to-cargo flights were cancelled; at the same time, the upper cabin loading was cancelled, and because there was no air transport right, charter flights became a fantasy.

What will be the future trend of air freight prices?

"According to the new regulations of the Civil Aviation Administration of China, the upper cabin cannot be loaded normally and not many foreign airlines will come in. The price of air transport will reach its peak around December 10, at about 125 yuan/kg. It is expected that the air transport price will be around 80-120/kg before the end of June." Wu Yuxin said.

Under the background of collective price increases in logistics, it is difficult for sellers to find low-cost stocking channels. "This year's peak season is not comparable to last year's peak season. Last year, the airfare was around 40 ( yuan /kg ). Under the influence of various policies, this year's price is around 100 ( yuan /kg ). It is basically impossible for users to choose a cheap channel to ship goods. "

It is not just the sellers who are under pressure, logistics companies are also facing greater pressure to advance funds. Wu Yuxin said that at present, customers have large shipments and few cabins, and several shareholders of the company have prepared sufficient funds to cope with this peak season.

The epidemic continues, and the entire logistics chain is blocked

Although the epidemic has eased, compared with before, the phenomenon of offline shopping by overseas consumers has decreased significantly, and more and more people are shopping online. The transparency and timeliness of cross-border transportation processes have also dispelled consumers' distrust of cross-border logistics services.

The "Online Consumer Survey Report" released by Accenture shows that 3/4 of residents prefer to shop in stores that use third-party logistics because of guaranteed transportation safety; about 2/3 of residents have shifted to online shopping because of flexible delivery methods, especially providing safe and convenient pickup locations for packages that cannot be delivered. Most shopping needs are accelerating from offline scenarios to online e-commerce platforms.

However, the impact of the epidemic is all-encompassing, and current cross-border logistics can hardly carry the huge volume of freight.

Wu Yuxin introduced that taking the United States and Canada as examples, the first-leg shipping space is currently tight and freight rates are high. There are long queues and serious congestion at the destination ports. There is a shortage of dock workers and unloading is slow. There are fewer dock trailers and freight rates are high.

In terms of overseas warehouses, factors such as the epidemic, the peak season and the blocking of big sellers' accounts have led to a shortage of overseas warehouse rental resources recently, and it is difficult to find a warehouse; in terms of the last mile, express prices have increased, peak season surcharges have taken effect, there is a shortage of express pickup vehicles, timeliness has been extended, there are fewer trucks delivering to FBA warehouses, prices have risen, and Amazon requires queuing to enter the warehouse and is slow to put products on the shelves.

From the front end to the back end, the logistics links are blocked at every level, and the epidemic is bringing more uncertainty.

In the past month, the new coronavirus variant "Omicron" has aroused global vigilance. According to Japanese media reports on December 3, the Omicron strain has spread to 32 countries and regions around the world. Many countries have begun to tighten border controls. Israel and Japan have successively announced a ban on all foreigners from entering the country. The United Kingdom, the United States and other countries have also issued relevant restrictions. The global aviation industry is under pressure again, and air transport logistics may be affected.

How to deal with logistics difficulties

For Amazon sellers, not only are logistics costs rising, but storage costs are also increasing.

In November, Amazon announced an update to its FBA fees. Effective January 18, 2022, Amazon's delivery fees, FBA monthly storage fees and overage inventory surcharges, removal and disposal order fees, and logistics small and light commodity program fees will change. This series of fee increases has caused sellers to complain.

How should sellers prepare their stock next? Wu Yuxin gave several suggestions:

1. Logistics costs are soaring, and sellers need to calculate and update product sales prices in a timely manner;

2. Logistics time is extended, you can choose to prepare goods in advance and reserve time for unexpected delays;

3. Problems such as package loss and damage at the last leg may intensify, so a margin of inventory is required;

4. FBA warehouses are seriously overwhelmed. Goods arriving at the warehouse should be put on the shelves, shipped and transferred as soon as possible, and more delivery methods should be adopted;

5. Some Amazon warehouses do not provide POD, and it is difficult to claim compensation if there is a problem. Choosing a reliable logistics provider will not embezzle the seller's goods;

6. Due to the epidemic, public security is worse than before, and theft and robbery will be more rampant. In order to avoid loss of goods, you should choose logistics providers more carefully.

Cross-border e-commerce is developing rapidly, and the industry's logistics situation is also changing accordingly.

Wu Yuxin said that cross-border export logistics has developed from exploration to growth, and more and more traditional freight forwarders have transformed into cross-border logistics service providers, forming logistics forms such as rail transportation and air transportation. In recent years, affected by the increase in terminal postage, logistics service providers have successively launched new business of dedicated line logistics products.

During the transportation process, common warehouse explosions and customs inspections will test the capabilities of logistics companies.

Take Rakuten Express as an example. Before delivery, the company will inform customers in advance to make sure that the product name is declared truthfully, the correct channel is selected, and prohibited items cannot be sent. If there is a customs inspection, the company will also contact the customs clearance company, cargo station, and customs first to submit supplementary information so that customs can release it in time. If the post office is full, the company will also choose more card delivery services to transport the goods to other stations.

In the post-epidemic era, how can sellers open up logistics links and prepare goods efficiently? On December 13, at the 2021 First China (Zhengzhou) Central Cross-border E-commerce Seller Brand Overseas Summit, Wu Yuxin, Business Director of Lotte East China, will give a keynote speech on "Focusing on Cross-border Logistics in the North American Market". Scan the QR code below the poster or click "Read Original Text" to register for the conference for free.

logistics

Cross-border e-commerce market

air transport