1. The three core elements of express shipping：

Accuracy: Departure and arrival on schedule, providing customers with a clear and reliable timetable. This punctuality helps customers better plan their logistics needs, reduce uncertainty, and improve overall operational efficiency.

Speed: Fast voyage, with shipping time from major ports in China to major ports in the US West Coast maintained between 11 to 13 days; rapid unloading at destination ports to ensure customers can pick up their goods within one to two days after arrival at the terminal; speed is also essential in serving cross-border e-commerce customers.

Reliability: Consistent and stable operational performance is the guarantee of certainty in the cross-border e-commerce supply chain. In a competitive market, express shipping needs to maintain high levels of performance and service quality on every voyage to earn customer trust and loyalty.

Mr. Li Xiaobing, President of COSCO Shipping South China and Hong Kong Region.

2、Opportunities and Challenges for Express Shipping

In recent years, particularly during the pandemic, express shipping has become a hot topic in cross-border e-commerce logistics. In the cross-border e-commerce industry, speed is paramount, making express shipping constantly innovating. However, true express shipping is not just about speed; customer experience is the determining factor. Therefore, express shipping needs to meet three core elements: accuracy, speed, and reliability.

Accuracy: Departures and arrivals are on schedule, providing customers with a clear and reliable timetable. This punctuality helps customers plan their logistics needs better, reducing uncertainty, and improving overall operational efficiency.

Speed: A fast voyage from major ports in China to major ports on the US West Coast should be maintained between 11 to 13 days. Rapid unloading at destination ports ensures customers can pick up their goods within one to two days after arrival at the terminal. Speed is also crucial in serving cross-border e-commerce customers.

Reliability: Consistent and stable operational performance guarantees certainty in the cross-border e-commerce supply chain. In a competitive market, express shipping needs to maintain high levels of performance and service quality on every voyage to earn customer trust and loyalty.

While air freight offers unparalleled time advantages, express shipping can provide stable services at relatively lower prices, with comparable efficiency in some cases. For instance, Star's express shipping service from Yantian International Port to the Port of Los Angeles can deliver goods within 16 to 18 days, compared to 5 to 9 days for direct flights and 10 to 18 days for transit flights. Despite being slightly slower, express shipping remains highly competitive considering price and stability factors.

The rapid development of the cross-border e-commerce market provides ample space for express shipping services. Since China's accession to the World Trade Organization in 2021, cross-border e-commerce has been the fastest-growing form of trade. According to relevant data, Chinese sellers' share of Amazon's merchandise transaction volume has been increasing year by year, reaching over 28% in 2023. In 2023, 75% of Amazon sellers were from China, a 47% increase from 2020. This indicates significant growth potential for Chinese sellers on Amazon, with their share of merchandise transactions expected to continue rising.

In the US e-commerce market, it is projected to grow by 8.5% in 2024, generating an estimated $1,064.29 billion in revenue. Additionally, Amazon's new policy, effective March 1st, has increased timeliness requirements, driving demand in the express delivery market and significantly impacting the cross-border e-commerce industry.

However, various unforeseen events, such as the "Black Swan" incidents, have brought great uncertainty to the maritime and international logistics industries. For example:

The collision incident at the Baltimore Bridge led to the closure of the major port of Baltimore on the US East Coast.

In 2023, the global maritime artery, the Panama Canal, experienced an "unprecedented" drought since records began in 1950. The Panama Canal introduced shipping restrictions, resulting in a 30% reduction in ship traffic. Container ships wanting to pass through the Panama Canal must lighten their loads and pay higher fees.

The Red Sea crisis has forced container ships to choose alternative routes to reach the US East Coast. The average delay time for ships has increased by 15 to 19 days, severely affecting timeliness. Ships detouring from Cape of Good Hope to the US East Coast are expected to arrive about 10 days late.

Therefore, we predict a significant increase in goods entering the US from the West Coast in the future. Using the US West Coast as an import gateway and combining it with the railway system for more precise transportation to destinations in the US has become a more attractive option. This approach can mitigate congestion and uncertainty on the East Coast, improving logistics efficiency and stability.

Finally, in the digital age, understanding customer needs has shifted from "what I think" to "what the customer thinks," with customer experience and demands becoming the primary focus for cross-border logistics companies. The unchanging guidelines for cross-border e-commerce sellers regarding cross-border logistics are mainly "fast, stable, and cheap," representing the timeliness of air freight, the price of sea freight, and stable services. Therefore, an increasing number of cross-border logistics companies are choosing express shipping provided by shipping companies as a fast lane service for cross-border e-commerce sellers. Express shipping is port-to-port, while fast lane service is warehouse-to-warehouse.

To excel in the fast lane, besides choosing the right express shipping service, the comprehensive strength of cross-border logistics companies is also a test, including domestic operational capabilities, and the US clearance, delivery, and distribution capabilities. The comprehensive advantages of cross-border logistics companies can be reflected in fast lane products, providing higher service value. Therefore, excellent cross-border logistics companies use accurate, fast, and reliable express shipping to create accurate, fast, and stable fast lane products, generating profits based on value and avoiding overwork.

3、Empowering the Growth Flywheel of Cross-Border E-commerce with Fast Shipping

Supply chain capability is at the core of the growth flywheel for cross-border e-commerce. Below is an analysis combined with two platforms, Amazon and TEMU.

As the world's largest e-commerce platform, Amazon's growth flywheel is product-oriented, optimizing the supply chain to continuously enhance user experience. It has invested heavily in logistics and distribution supply chains to provide customers with the ultimate purchasing experience.

Meanwhile, as the fastest-growing platform, TEMU's growth flywheel mainly consists of two steps: the first step involves achieving marketing breakthroughs through products, increasing traffic, operational capabilities, and product offerings to attract customers; the second step focuses on converting marketing capabilities into supply chain profitability, transitioning from "having customers" to "enhancing customer experience."

Cost-effectiveness is the underlying logic of supply chain capability. The supply chain capability of cross-border e-commerce involves a comprehensive cost comparison. A good supply chain can reduce inventory costs, sales turnover periods, and logistics costs, thereby enhancing product cost-effectiveness.

Fast shipping acts as a substitute for air transportation in terms of cost-effectiveness, empowering the growth flywheel of cross-border e-commerce. Firstly, it offers greater transportation capacity, with container shipping accounting for 30% to 40% of global capacity, a significant force despite 50% of global capacity coming from air transport. Secondly, it provides faster turnaround speeds, more reliable service guarantees, and optimized logistics cost support.

End

Cross-border E-commerce Logistics Bai Xiaosheng