Amazon's new policy will be implemented this week! Sellers are anxious

Starting this Thursday, Amazon will begin to implement a new policy for FBA shipments, shortening the delivery time. This move will not only reduce the concentration of goods in popular warehouses in the western United States, but also plug the long-standing operational loopholes of "building more and shipping less" and "building A and shipping B", which will have a significant impact on shipments.

At present, many people are hesitating whether to switch to domestic addresses. So, is it still feasible to ship goods using a US address? If not, what are the alternatives? According to feedback from many parties, it is feasible to continue to use a US address, and sellers can also try to build warehouses using addresses such as Canada.

However, sellers may be charged a warehousing defect fee if they ship the goods improperly. In addition, Amazon will make at least four fee adjustments in February, mainly with increases, so sellers need to carefully calculate the costs.

The new policy for warehousing will be implemented, will the shipping address change?

Starting from February 1, Amazon domestic (US) shipments and international shipments must be delivered within 45 days and 75 days after creation, respectively. Exceeding the delivery time will be automatically closed. If the shipment does not meet the requirements, or the shipment is deleted or delivered to an unplanned warehouse, Amazon will refuse to accept it or charge an additional fee. In serious cases, the seller will be prohibited from shipping.

As the policy is about to take effect, sellers are discussing and testing how to reduce the impact on shipments and complete the transition without increasing costs. Industry insiders have already provided solutions to several of the most critical issues.

1. Can I still ship to a US address?

This is the issue that sellers are most concerned about. Amazon has always allocated warehouses nearby. Domestic sellers are used to building warehouses near warehouses in the western United States to save costs. The new policy requires that shipments to domestic addresses in the United States must be delivered within 45 days. Sellers are worried that they will not be delivered on time and can only change back to using addresses in their home countries. However, from the test results, domestic addresses are often assigned to remote warehouses in the central and eastern United States, and the warehouse division is more serious, and the first-mile cost has risen visibly.

According to feedback from sellers and freight forwarders, most shipments can be delivered within 45 days, which means that many sellers can continue to use US addresses to create shipments.

Some sellers said bluntly : "As long as the ship is not particularly slow and nothing goes wrong, 45 days should be enough. " One company said that they have always packed the goods, created the shipment and labeled the boxes on the freight forwarder's deadline for warehousing, and then the freight forwarder came to pick up the goods. The slow ship sent by Yantian can basically deliver the goods to the warehouse within 30 days after the shipment is created. Therefore, they feel that this policy does not have much impact.

Several freight forwarders also said that under normal circumstances, Matsun can deliver the goods within 45 days, and there is no major problem with ordinary ships with stable delivery time during the off-season.

Shenzhen freight forwarder Dapeng gave an example. If the seller opened a warehouse last Tuesday ( January 23 ) and used a general ship, the ship would normally depart this Thursday ( February 1 ). After the ship departed, it would take about 22-26 days for the West Coast of the United States to sign for it, which means that it would basically arrive within 35 days after the warehouse was opened. Matsun is faster, and it can be signed for in about 28 days from the time of warehouse opening. In other words, most sea freight can meet the 45-day delivery requirement.

However, sellers who continue to use US addresses must strictly control the delivery rhythm, such as packing first, then creating shipments according to the cut-off time, and immediately ship next week after labeling. Some freight forwarders have suggested that sellers create shipments on Wednesday, label on Thursday, and deliver on Friday. This schedule is very tight, and there are exactly 7 days before the next week's ship.

In this way, the connections between each link will be closer, requiring not only freight forwarders to deliver goods in a timely manner, but also suppliers to deliver goods in a timely manner, and the entire line will be linked to control time.

When choosing a logistics provider, sellers will pay more attention to speed and stability, which will force the latter to optimize their services. A freight forwarder said that after the new year, he is confident that the shipping time can be accelerated by three to five days, so that it will take about 20-25 days from Thursday to Friday to Amazon. In this way, sellers can still choose the West Coast address for shipment, and even if it is inspected for one or two weeks, it can be delivered within 45 days.

2. Is it possible to use a Canadian or Mexican address?

If you can no longer ship to the West Coast by regular ship, then whether you use a US address to build a warehouse and use a fast ship, or use a domestic address to use a regular ship to the East Coast and Central America, the seller will face an increase in shipping costs. If you can ship to the West Coast of the United States within the 75-day standard for international shipments, it must be the best option.

Sellers can try to use addresses in Canada, Mexico or other countries near the United States, which can not only extend the delivery time but also increase the probability of building shipments to the western United States. Some sellers have successfully built warehouses in common warehouses such as LAS1, ONT8, SBD1, SCK4, etc. using Canadian addresses. Western Canada may be more likely to succeed.

However, as the policy takes effect soon, using a Mexican or Canadian address may not necessarily get you to the West Coast warehouse, so it requires a certain amount of luck.

3. Sellers cannot violate the policy by late delivery, deleting warehouses, etc. Otherwise, they will face rejection, charges or even restricted shipping rights.

The new policy aims to plug the shipping loopholes of domestic sellers, including using the West Coast address of the United States to build a popular warehouse, "build A and send B" such as far warehouse and nearby delivery, or build more and send less. After February, if the operation does not meet the requirements, Amazon will issue a notice, refuse to accept the shipment or charge extra fees, and sellers who continue to push forward may have their shipping privileges suspended.

FBA shipment requirements require that sellers cannot abandon shipments after approving the warehousing plan. If domestic shipments are not delivered within 45 days and international shipments are not delivered within 75 days, Amazon will notify the seller that the shipment does not meet the policy and the shipment will be automatically closed. If the shipment is in transit but is delayed due to unforeseen circumstances, such as weather or serious events that affect logistics, the shipment will remain open.

In addition, after approving the multi-destination warehousing plan, sellers are not allowed to delete some of the planned shipments. If you delete them, or if all shipments are not delivered within 30 days after the first batch of shipments arrive at the operation point , it does not meet the policy requirements and Amazon will inform you.

Amazon may refuse to accept shipments that do not meet the requirements. Even if it accepts the shipment, it will charge the seller an inbound defect fee, which is charged on a per-piece basis . If the shipment is delivered to the wrong location, it will charge $0.04-0.07 per piece. If the shipment is deleted or discarded, it will charge $0.02-0.04 per piece. This fee will be charged starting March 1.

And if the seller continues to ship after Amazon sends the initial notice, he may be temporarily banned from sending other shipments until the seller provides an acceptable plan of action. Coupled with rejection and additional charges, it can be said to be a double risk.

If you want to change an approved shipping plan, you need to delete all shipments in the plan before starting shipping. You can also edit the quantity of items in the shipment, but it cannot exceed 5% above or below the original quantity (up to 6 items).

In fact, the newly added warehousing defect fee is indeed painful, but it is still a small expense compared to the rapidly rising storage fees. Therefore, some sellers think it is acceptable even if they may have to pay a fee to enter the warehouse.

What is considered delivered? Amazon reminds that a shipment is considered delivered when its status changes to "In Transit", "Registered", "Delivered", or "Receiving". Shipments with statuses of "Processing", "Ready to Ship", and "Shipped" are subject to the automatic closing policy.

In order to facilitate shipments from US addresses, some sellers choose to prepare goods in overseas warehouses to ensure delivery time and label them before shipping. However, the corresponding stocking pressure is also significantly increased. The platform has raised the conditions for goods to enter the warehouse and charged fees, which has also made some sellers begin to consider the feasibility of using AGL.

The new FBA policy has added a warehousing defect fee item, but this is just one of Amazon’s actions. Next month, several other fees on the platform will also change, mainly with an increase.

Entering February, four expenses began to rise

Recently, Amazon collected logistics and storage fees for December, which accounted for a large proportion of sales, but the cost pressure on sellers will increase in the future. According to the 2024 Amazon Logistics Fee Change Notice, there will be 5 adjustments in February, of which 4 fees will increase.

Increased removal and disposal fees

Starting from February 5, Amazon began to increase the fees for removing and discarding orders. Among them, the fee for standard-sized items increased by $0.06-0.07 per item; the fee for large and oversized items (formerly large items) and special handling items under 1 pound remained unchanged, and the fee for items between 1 pound and 10 pounds increased by $0.23-0.8 per item, with the largest increase of $1.27 for items above 10 pounds. Bulk clearance fees remained unchanged.

If the seller submits a removal order or disposal order before February 5, the new fee will not apply even if the shipment is completed on or after February 5. If you need to clear excess inventory, you can do a quick cleanup in the next few days.

Increased surcharge on over-age inventory

Starting February 15, the overage inventory surcharge will increase for inventory between 271 and 365 days old. The price of goods aged 271-300 days will increase by $1.65 per cubic foot to $5.45; the price of goods aged between 301-365 days will increase by $1.7 per cubic foot to $5.7 or $5.9. The surcharge for inventory aged between 181-270 days and over 365 days will remain unchanged.

Pre-processing service fee increase

According to the latest operating cost data, Amazon has increased the pre-processing service fee, which will take effect on February 5. From the new fee standard, it can be seen that the cost of standard parts for fragile items, glass products and sharp items has increased, with each item increasing by about US$0.24 to US$1.59.

New size segments were introduced, and delivery fees for some products temporarily increased

Starting February 5, Amazon will launch new size segments for the Small Standard Size Segment (in 2-ounce intervals), and new size segments for the Large Standard Size Segment over 1 pound (in 4-ounce intervals), and new Large Oversized and Oversized Size Segments to replace the current Oversized Size Segments. This change also applies to remote delivery.

Amazon's logistics delivery fees, storage fees, removal and disposal fees are all charged based on the size of the product. In the more than two months since the adjustment on February 5, the delivery fees for some weight ranges of goods other than clothing have increased slightly, with small standard items increasing by a maximum of $0.1 and large items increasing by no more than $0.5.

The new delivery fees will take effect after April 15, and will reduce the average price of standard-size items by $0.20 per item, and the average price of large-size items will be reduced by $0.61 per item.

Product original packaging plan fee discount takes effect

Amazon is accelerating the promotion of the original packaging shipping program. Starting from February 5, the fee discount of the program will be implemented. When the product meets the relevant requirements and can be directly shipped in its own packaging, Amazon will provide a delivery fee discount of US$ 0.04-1.32 through the original packaging shipping ( SIPP) program , depending on the size and weight of the product.

In the next two or three months, more 2024 fee adjustments will be implemented, including warehouse configuration service fees ( effective March 1 ), low inventory fees ( collected starting April 1), storage utilization surcharges (more segments and rates starting April 1), off-peak monthly storage fees (reduced by an average of $0.09 per cubic foot starting April 1), etc. Sellers need to prepare for the future.

Warehouse explosion continues, Amazon notifies four warehouses to close

At the end of January, sellers were rushing to create shipments in the last minute to delay the impact of the warehousing policy. Amazon's API for creating shipments was abnormal and reported an error, but fortunately the problem was quickly resolved. However, a series of problems occurred in Amazon warehouses, affecting the warehousing and listing of sellers' goods.

The recent winter storm swept across Europe and the United States, and many Amazon warehouses were temporarily closed. According to the previous notification from the freight forwarder, the US FWA4, IND9, and MDW2 warehouses were temporarily closed on January 14 local time, and there is no specific opening time; MQJ1 was closed on January 20 local time, and is expected to reopen on February 24 US time; MEM1 began to close for a long time on January 20, and the reopening time is unknown.

The warehouse receiving situation eased afterwards, but some warehouses were permanently closed and the goods that sellers planned to deliver had to be transshipped.

Amazon officially announced that several warehouses, including QXY8, HMW4, MEM1, and MQJ1, will be closed, and the reservation and receipt of FBA goods will be suspended, and supplier freight will no longer be accepted. Among them, MQJ1 and MEM1 warehouses will be converted into Amazon internal transit warehouses, and the goods to be delivered here will be arranged for internal transit. The goods of MQJ1 will be transferred to IND9 or MDW2, and the goods of MEM1 will be transferred to FTW1 or IAH3. The goods that have been warehoused but not delivered in the early stage can be re-warehoused and re-labeled for delivery.

The transportation has made other warehouses more crowded. According to feedback from logistics companies, many warehouses are still overcrowded, such as ONT8 , LGB8 , IND9 , MQJ1 , MDW2 , which are difficult to make reservations; FTW1 , OAK3 , SJC7 , SBD1 , MCE1 , OAK3 , SMF6 , TPA2 , SBD2 can be booked, but it will take two or three weeks. In addition , HSV1 , IND9 , and MDW2 have had irregular closures recently , and reservations are also difficult . Only a few warehouses can make normal reservations, including LAS1 , GYR2 , GYR3 , VGT2 , etc.

Canadian FBA warehouses are also generally busy. YOW1, YOW3, YYZ3, and YYZ7 have all been out of stock recently, making it difficult to make reservations; the waiting time for YVR2, YVR3, YVR4, and YYC1 is also longer than usual, so sellers can adjust their stocking rhythm appropriately.

The problem of unsmooth warehousing is only a short-term problem, which is gradually improving as local weather conditions improve. For goods to be shipped to Europe and the eastern United States, the biggest problem at the moment is the first leg.

The Red Sea crisis continues, and there is no solution to the shipping problem

Since the end of last year, the black swan event of the Red Sea crisis has disrupted the shipping plans of a large number of sellers.

Since November, the Houthi armed forces in Yemen have repeatedly attacked "Israeli-related" ships in the Red Sea in support of Palestine, triggering a crisis on multiple shipping routes including Asia and Europe. Many shipping companies were forced to suspend the Red Sea route and divert to the Cape of Good Hope, causing Asia-Europe shipping prices to soar. As the European route time was extended, in order to supplement the shipping capacity, shipping companies transferred some US-bound ships to the European route, causing the US route to be dragged down and freight rates to rise.

In the past two months, container prices on the Asia-Europe route continued to soar, but in the past two weeks, the soaring freight rates have slowed down and have fallen slightly.

On January 19, the freight rate (sea freight and sea freight surcharge) from Shanghai Port to the European base port market was US$3,030/TEU, down 2.4% from the previous period.

On January 26, the freight rate from Shanghai Port to the European base port market was US$2,861/TEU, down 5.6% from the previous period. The market situation of the Mediterranean route was basically similar to that of the European route, and the spot market booking price also fell. The freight rate from Shanghai Port to the Mediterranean base port market was US$3,903/TEU, down 4.0% from the previous period.

The Shanghai Shipping Exchange analyzed that this was because the impact of the Red Sea situation on the shipping market was gradually being absorbed, and shipping companies avoided canal tolls and high insurance premiums by taking detours, thus reducing the cost of going through the canal and causing booking prices and market freight rates to fall.

However, prices on the US route are still rising. It is now a small peak for shipments before the Spring Festival, the market volume is at a high level, the Shanghai Port service is almost fully loaded, and prices continue to rise. On January 26, the market freight rates (sea freight and sea freight surcharges) from Shanghai Port to the West and East US base ports were US$4,412/FEU and US$6,413/FEU, respectively, up 2.1% and 2.4% from the previous period.

Due to the reduction of detours by shipping companies, congestion in the Panama Canal and the Suez Canal in the east of the United States, shipping companies reduced the sailing schedule in East China, and some East China cargo was moved to South China for shipment. In late January, some routes saw container abandonment. In the third week of this year, East China ships had already begun to abandon containers in large numbers. After that, the space was even more full, and the situation of container abandonment continued unabated. Freight forwarders suggested that sellers extend their stocking plans.

Overall, shipping costs in 2023 are lower than in previous years, and the reduction in head-leg costs has given many sellers greater room for profit growth.

According to the newly released performance forecast, Savitech expects to achieve revenue of about 6.5-6.6 billion yuan in 2023, an increase of about 1/3 year-on-year, and the annual net profit attributable to the parent company is expected to be 320 million yuan to 350 million yuan, a year-on-year increase of 72.84% to 89.05%. The reasons for this are, on the one hand, the proportion of high-gross-profit clothing and accessories categories has increased, and on the other hand, the unfavorable factors faced by non-clothing and accessories categories in the early stage have gradually eased, the first-leg freight rate has decreased, and the inventory clearance is nearing the end.

However, major shipping companies are currently sailing around it. If the Red Sea issue continues to remain unresolved, shipping costs in Europe and even the East Coast of the United States will increase in 2024 compared to the previous year.

Judging from the current situation, there is no short-term solution to the Red Sea issue. On the evening of January 28, the Houthis fired missiles at the USS Lewis B. Puller, a US Navy ship sailing in the Gulf of Aden. This was the second direct attack on a US warship by the Houthis after they fired missiles at the destroyer USS Carney not long ago. The confrontation in the Middle East waters is rapidly escalating.

The United States formed a maritime escort alliance and claimed to escort ships transiting the Red Sea, but at the time, some people pointed out that its approach would not help ease the situation in the Red Sea and might even exacerbate regional conflicts. Only a ceasefire in the Israeli-Palestinian conflict could fundamentally solve the problem. As expected, since the United States intervened and attacked the Houthi armed forces, the conflict in the Red Sea has not stopped but has intensified. It is unknown when the war will end, and merchants exporting to Europe and the United States are facing great uncertainty.