Cross-border logistics will be reshuffled in 2019: how to achieve integration in the change?

In recent years, cross-border e-commerce has developed rapidly, and more and more Chinese-made and Chinese brands have entered the world. According to customs statistics, the total value of my country's foreign trade exports in 2018 was 16.42 trillion yuan, a year-on-year increase of 7.1%. According to the business model, my country's cross-border e-commerce is mainly B2B, accounting for more than 80%. With the rise of online shopping and smart phones, the cross-border online retail market has developed rapidly, and retail has higher requirements for product supply chain and logistics service levels, which are also the core elements supporting the steady development of cross-border retail e-commerce.

The changes in the international trade environment and the tightening of cross-border e-commerce platform policies have made the overall environment of cross-border logistics constantly changing, and market competition has become increasingly fierce. However, a sound cross-border logistics system plays a vital role in the overall export quality of export enterprises. The core issues of cross-border logistics, such as timeliness, cost, and safety, have always attracted attention. Now its comprehensive service level, such as after-sales service Ability, customs clearance ability, digital information sharing, etc. have also been continuously valued by export enterprises.

In the current market environment, the shuffling of the logistics industry is constantly escalating, and the principle of survival of the fittest is more and more vividly reflected. How can cross-border logistics service providers achieve integration amid changes? "CEConline" launched the "2018 China Export Enterprise Cross-border Logistics Service Satisfaction Survey" activity at the 2018 Hong Kong Autumn Global Sources Electronics Show and the CEConline website, email invitation, WeChat and Weibo and other joint surveys. , which brings together the voices of Chinese export enterprises.

Survey method and sample description

From the perspective of the types of export products of enterprises participating in this survey, export products are diverse, among which consumer electronics and electronic spare parts account for a large proportion. 33.0% and 18.4% respectively. Other product categories are mobile electronics, auto parts, LED and solar products, household products, smart wearables, security products, drones and smart robots, fashion accessories, fashion fabrics, etc. ( see picture 1).

Participate The export destinations of the companies surveyed this time are mainly concentrated in the United States 16.8%, the United Kingdom 10.0%, Germany 9.5%, Southeast Asia 9.0%, and France 6.1%. In Figure 2, it can be seen that the export destinations of enterprises are not only for some developed countries such as the United States, the United Kingdom, and Germany, but also emerging countries and regions such as Southeast Asia, India, and Africa.

In recent years , With the development of e-commerce and cross-border logistics in some emerging countries and the promotion of the "Belt and Road" policy, many export business opportunities will be born. For cross-border logistics service providers, building a one-stop logistics service system for export enterprises in countries with mature logistics systems and building a complete logistics network in advance in emerging markets are the main development directions.

Judging from the annual export volume of the companies participating in this survey, 91% of the export companies’ export volume in 2017 was less than RMB 1 billion, indicating that small and medium-sized sellers are still the mainstream of the market. Due to investment and industry competition, the annual sales of export enterprises will increase steadily.

Sea shipping is the most preferred cross-border logistics method for export enterprises

53.7% of the participating companies choose sea transportation, 42.2% choose air transportation, and 4.1% choose railway lines ( See Figure 3). According to the quantity, category, timeliness, and even the tax rate, export enterprises will require different logistics methods. Many export enterprises will use "walking on multiple legs", that is, a combination of multiple logistics methods, which is also very important for cross-border logistics services. Businesses put forward higher integration requirements.

Currently The most utilised ocean transport will face the challenge that the International Maritime Organization (IMO) will implement its ban on January 1, 2020, banning ships from carrying fuel oil with a sulphur content of more than 0.5%. Whether it is replacing cleaner fuel or installing cleaning devices on ships, this will undoubtedly increase the operating costs of shipping service providers. Therefore, the impact of shipping on cross-border logistics companies in the future is worthy of attention.

After the "Belt and Road" initiative was put forward, the China Railway Express was gradually incorporated into the development framework. After more than 7 years of development, the China Railway Express has formed a relatively stable development pattern, and more and more large international enterprises have also realized that this is a logistics channel that can be relied on for a long time.

For some inland cities that have opened the China-Europe Railway Express, compared with the previous combined use of sea and land transportation, the China-Europe Railway Express has directly straightened the distance between the two places, and the time unit of transportation has been changed from "month". Across to the "day", the transit time is redefined. Compared with traditional shipping, the direct freight train between China and Europe saves time and costs compared with air freight. It is the top priority to speed up the development of China-Europe freight train with more "quality".

"Customs clearance capability" is the core competitive point of cross-border logistics

Logistics timeliness, logistics transportation cost, and logistics safety are the priorities of participating companies when selecting logistics service providers options, but customs clearance capabilities, after-sales service capabilities, and freight matching are also key factors considered by many companies (see Figure 4). With the development of digital technology, the transportation efficiency has been greatly improved, and more and more enterprises have begun to pay attention to the accuracy of delivery and the information technology of logistics.

The rapid development of domestic logistics, first of all, because domestic logistics does not involve the process of customs clearance, so the process is not so complicated. However, in the process of cross-border transportation, the incident of "detained goods by customs" frequently occurs, which will seriously affect the timeliness of logistics. Especially in the current Sino-U.S. trade war, U.S. Customs has stepped up its scrutiny of intellectual property rights and prices of Chinese goods. Therefore, the customs clearance capability of cross-border logistics service providers will be a core competition point.

Continuously optimizing service quality is the key for cross-border logistics companies to break through.

In this survey, logistics costs rose, customs clearance obstacles, slow delivery, damaged or even lost packages, and difficulty in the whole process. Tracking is the five major problems encountered by participating companies in cooperation with logistics service providers, and a few companies report that return and exchange services should be improved (see Figure 5). These problems are the pain points of cross-border logistics.

In fact, the most difficult thing in the logistics industry is service. Especially in the current complex competitive environment, continuous optimization of services is the key for cross-border service providers to break through among their peers.

Logistics cost control is the biggest challenge faced by import and export enterprises

According to this survey, the biggest challenge faced by exporters in supply chain and logistics services at this stage is to control logistics costs. accounted for 40.2%. The selection and management of integrated logistics service providers, the overall planning and optimization of the supply chain, the traceable management of the entire logistics process, and the difficulty of existing logistics systems and service providers to meet business transformation and development accounted for 18.8%, 16.1%, 13.7%, and 10.4% respectively ( See Figure 6).

If companies want to gain more profits in export business, controlling logistics costs is a major issue they need to consider. In the enterprises participating in this survey, how much can the logistics cost account for the total export volume? Among them, 60.9% of enterprises account for 0-10%, 29.6% of enterprises account for 10%-15%, 8.4% of enterprises account for 15%-25%, and 1.1% of enterprises account for more than 25% ( See Figure 7).

More than 60% of the export enterprises participating in the survey control the logistics cost within 10%, and the remaining 40% of the export enterprises have a logistics cost that exceeds 10% of the total export value. Controlling the logistics cost is a challenge faced by these enterprises in cross-border logistics. challenges, and Figure 7 reflects the same problem.

Chinese export enterprises believe that there is still a lot of room for improvement in the service level of supply chain and logistics at this stage. First of all, logistics cost is the primary consideration, and the increase of logistics cost will directly lead to the decline of corporate profits. For cross-border logistics service providers, how to improve the quality of logistics services while reducing costs is also the biggest problem and challenge they will face in the future.

The most popular cross-border logistics service providers chosen by Chinese exporters are DHL, UPS, and Fedex

The three major logistics service providers most used by participating companies are DHL, UPS, and FedEx , followed by SF Express, TNT, Debon Express, ZTO Express, FBA, China Post, STO Express, YTO Express, Disifang and other domestic and foreign cross-border logistics companies (see Figure 8). Among them, SF Express, DHL, UPS, Fedex, TNT, Debon Express and FBA have obtained high user satisfaction.

Logistics has always been an important part of the cross-border chain, and the development of the logistics industry can also drive the development trend of the entire cross-border industry. However, cross-border logistics is not like domestic logistics. Most export companies use different delivery logistics companies and terminal distribution logistics companies. Export goods have to deal with multiple logistics companies during the circulation process. Information between different logistics companies cannot be shared in time. This asymmetric circulation information greatly increases the loss rate of parcels in cross-border logistics and reduces the delivery rate at the end. Cross-border logistics companies can only succeed in breaking through the many barriers in the transportation process and improving the efficiency and quality of transportation.

In the process of reshuffling cross-border logistics enterprises, no matter whether it is a large company or a small company, there is only a close division of labor and cooperation between the leading enterprises in the subdivided industries and the platforms integrating upstream and downstream. Therefore, cross-border logistics needs to integrate the resources of upstream and downstream enterprises through innovation, join forces and cooperate with each other, continuously update and iterate the entire process system based on market demand, and improve after-sales service and customer experience through joint teams to continuously win market recognition. Finally, through this set of "combination punches", he established his own brand and became a leader in cross-border logistics enterprises.

* Data source: All chart data are from "CEConline" 2018 China Export Enterprise Cross-border Logistics Service Satisfaction Survey