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1. Fully Managed and Semi-Managed Models Lead to Capacity Shortages

Cross-border e-commerce platforms are introducing fully managed models, making air freight capacity increasingly tight. The current consensus in the air freight market is that while goods are plentiful, there is a shortage of planes. Even if cross-border e-commerce develops at a normal pace, the capacity of long-haul wide-body freighters will be insufficient to meet demand for the next 5-10 years. This means that in the long term, the ability to acquire and occupy upstream freighter resources will largely determine the scale development limit of cross-border e-commerce platforms, especially those with direct shipping logistics models.

More than 95% of the world’s long-haul wide-body freighters are manufactured by Boeing. It takes at least two years from ordering to delivery of a new freighter, and the cost of manufacturing a new freighter can easily exceed billions of dollars. Therefore, ordering a freighter is not a short-term investment but one that looks at returns and profits over the next 10-20 years. Both airlines and leasing companies are very cautious when deciding to order freighters.

Under the influence of the fully managed model and the production cycle of new freighters, we will face a serious structural supply-demand mismatch in the industry for the next 5-10 years. The shortage of long-haul wide-body freighter capacity will persist, leading to a tight supply situation. However, we remain optimistic about the development of air freight in the next 5-10 years, as there is significant growth potential for upstream air cargo capacity.

Since TEMU launched the semi-managed model on March 15, major cross-border e-commerce platforms have rushed to join. In just three months, overseas warehouse resources across the industry have become tight. Over the past two years, inventory reduction in Europe and the United States has not significantly increased overseas warehouse capacity. Some areas have even seen warehouse shrinkage due to inventory reduction strategies. The semi-managed model’s implementation in the past three months has filled up the limited capacity of overseas warehouses, leading to capacity shortages.

Like freighters, overseas warehouses are also heavy-asset investments. Building a new warehouse in Europe or the US requires long-term leases (typically over three years) and investments amounting to millions of dollars. Thus, building overseas warehouses is a cautious decision for large enterprises.

2. Platforms Seek Light Assets, Logistics Companies Require Heavy Assets

Currently, cross-border e-commerce platforms aim to create light-asset models, focusing on user traffic and registrations. However, the logistics industry must invest heavily, mainly in trunk lines or overseas. Whether buying planes or building warehouses, the investments run into millions or even billions of dollars. Such substantial investments need long-term evaluation of costs and returns, with short-term returns being hard to achieve.

Moreover, heavy-asset investments demand refined operational capabilities. For instance, building a warehouse overseas is just the first step. The real challenge is running it efficiently and digitally, maintaining a reasonable capacity ratio to ensure cash flow and profitability. Heavy-asset investments hinge on reasonable profit returns. If logistics service providers increase capacity based on short-term e-commerce traffic growth, they risk being stuck with costly infrastructure if e-commerce policies or traffic change, leading to a precarious financial situation.

For e-commerce platforms, there is no shortage of logistics service providers, and they can be replaced anytime. However, for logistics service providers, their biggest clients are e-commerce platforms. Fundamentally, cross-border e-commerce platforms and logistics service providers share a symbiotic relationship. Only with reasonable profits can logistics providers improve services and expand capacity, ensuring stable and sustainable growth for e-commerce platforms.

3. How to Develop Global Logistics Infrastructure Long-Term

The uncertainty of commerce makes logistics service providers cautious about infrastructure investments. To achieve greater growth, the cross-border e-commerce logistics industry needs more attention from governments and society, requiring more social capital for logistics infrastructure construction. Only with higher industry-wide, social, and governmental focus can global logistics infrastructure develop sustainably.

Looking at the development of domestic e-commerce, we can learn a lot. The growth of domestic e-commerce, driven by platforms and capital, has completed the socialized logistics infrastructure construction. Unlike the outdated logistics infrastructure in many overseas countries, China has inherent advantages in infrastructure. For example, China has the longest highways and high-speed rail networks globally, with numerous government-built airports.

Thanks to the government's proactive socialized logistics infrastructure planning, domestic e-commerce has rapidly grown over the past decade, reaching a significant scale. Currently, the daily circulation and transportation of over 300 million parcels in domestic e-commerce depend on this socialized logistics infrastructure.

E-commerce growth increases logistics demand, yet major global courier companies like FedEx and UPS are scaling back, laying off workers, or closing transfer hubs. This results in a contrasting industry scenario.

The reason behind this is that traditional logistics companies' hub-and-spoke networks, regional hubs, and B2B supply chain warehouses are not strategically located for e-commerce logistics. For instance, a courier company might have a hub at Airport C when Airport A would be more suitable, leading to resource misallocation and limiting the growth of e-commerce logistics.

Furthermore, building cross-border logistics infrastructure spans multiple countries, each with different conditions, laws, and policies. This adds high uncertainty, complexity, and management difficulty for single companies investing overseas. Therefore, global cross-border e-commerce logistics infrastructure needs more participants, including social capital and governments overseas. Strengthening cross-border cooperation and coordination can help build a global e-commerce logistics infrastructure network, promoting higher industry development.

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Public Account: Cross-Border E-Commerce Logistics Baixiaosheng