In the past, traditional freight forwarders primarily focused on selling air freight spaces and sea freight containers, acting more as agents.

 However, after the pandemic, many traditional forwarders have evolved from selling air freight spaces to booking their own charter flights, and from selling sea freight containers to becoming major consolidators in sea freight. Their scale and capabilities have been continuously transforming and upgrading. Some traditional freight forwarders, seeing the success of cross-border e-commerce logistics companies, have even started to pivot towards cross-border e-commerce logistics.

Actually, in the context of e-commerce platforms implementing segmented procurement, traditional freight forwarders have a greater advantage, especially in acquiring mainline transport capacity resources, compared to most cross-border e-commerce logistics companies.

First, the scale of a dedicated logistics company largely depends on its ability to acquire upstream transport capacity resources. The more capacity they have, the more cargo volume, business, and scale they can achieve. The ability to acquire upstream transport capacity essentially determines the growth ceiling of dedicated logistics companies.

To meet market demand and their development strategies, e-commerce platforms are now implementing segmented procurement and are searching for the sources of transport capacity resources. This includes stages like transport capacity, customs clearance, warehousing and distribution, and last-mile delivery. E-commerce platforms aim to collaborate directly with these source providers.

Taking air cargo as an example, tracing the source upwards: first, there are BSA (Block Space Agreement) agents for chartered flight spaces; next, charter companies that purchase capacity on a monthly or annual basis; further up are cargo airlines with their own freighter fleets; above them are leasing companies that buy aircraft through financial means and lease them to airlines; and finally, the aircraft manufacturers like Boeing and Airbus.

In their search for resource sources, e-commerce platforms delve deeper upstream: initially buying space from freight forwarders, then as cargo volume increases, they start booking charters from operators, later collaborating directly with cargo airlines, and when airlines can no longer meet demand, they may seek long-term leases from leasing companies or even purchase aircraft directly from manufacturers. Therefore, under the background of segmented procurement by e-commerce platforms, traditional freight forwarder companies that control transport capacity resources have a development advantage and will be more favored by platforms.

Secondly, after breaking down the capabilities of cross-border logistics into segments for procurement—such as mainline transport, customs clearance, warehousing, and distribution—e-commerce platforms are becoming the largest logistics integrators in the industry. As a result, many full-chain dedicated logistics companies are experiencing a significant drop in cargo volume and revenue, leading to a decrease in their numbers.

The core reason for this phenomenon is that most full-chain dedicated logistics companies operate with a light asset, light integration business model, mainly acting as resource integrators. They rely on finding suppliers for mainline transport, customs clearance, warehousing, and distribution, without heavy investments in resources and infrastructure. This results in poor control over cross-border logistics chain resources and service stability, leading to many development bottlenecks.

Finally, the upstream resources in the cross-border logistics industry are scarce and monopolistic. Hence, the industry is at a turning point. Cross-border logistics companies either need to become heavier, transforming into infrastructure service providers, or traditional freight forwarders with deep industry experience will have an advantage due to their strong relationships for acquiring scarce upstream resources.

Additionally, in the current high freight rate environment, traditional freight forwarders are more profitable compared to cross-border e-commerce logistics companies. The fluctuating air and sea freight rates place significant capital pressure and risks of instability on full-chain dedicated logistics companies. Traditional freight forwarders, however, can pre-sell spaces to customers, face lower costs, shorter chains, and thus lower risks.

Therefore, in the context of fluctuating and rising freight rates, it is more meaningful for the industry to emphasize the integration and digital capability enhancement of traditional freight forwarders with e-commerce logistics, rather than just focusing on the transformation of traditional freight forwarders.

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Cross-border E-commerce Logistics Bai Xiaosheng