Image Source: "2023 China Cross-Border E-commerce Logistics Industry Blue Book"

1. Front-End Collection

   Collection is a domestic segment of cross-border logistics, where customers hand over goods to the logistics company within the country. Common collection methods include door-to-door pickup, third-party logistics delivery, warehouse collection, and system-assigned pickup. Depending on factors such as the scale of the international freight forwarding company, the customer's location, and the type of goods, different collection methods can be chosen.

   In the front-end collection phase, cross-border e-commerce logistics companies mainly establish collection points in core cities where the cross-border e-commerce industry is more developed. Currently, companies with numerous collection points include Yanwen Logistics, 4PX, and YunExpress. Additionally, domestic companies such as “Three Links One Reach” (STO Express, YTO Express, Yunda Express) as well as SF Express, Deppon, and Best Express have also established cross-border e-commerce logistics divisions, gradually gaining strength in the cross-border e-commerce logistics field and possessing established advantages in domestic collection networks.

2. Warehouse Operations

   In the warehouse operations phase, cross-border e-commerce logistics companies mainly focus on building regional distribution processing centers. Based on the business model, domestic warehouse distribution centers for FBA logistics companies are relatively simple, primarily following a cargo consolidation model through air and sea freight, equipped with fully automated sorting lines. Currently, in terms of sorting capacity within warehouses, Yanwen Logistics, 4PX, YunExpress, and D1 Logistics all have the capability to sort and process over 1 million cross-border parcels per day.

3. Export Customs Clearance

   For export customs clearance, the national level has introduced regulatory models such as "9610" (cross-border e-commerce B2C), "9710" (cross-border e-commerce B2B), "9810" (cross-border e-commerce export to overseas warehouses), and "1210" (bonded e-commerce export) that are applicable to cross-border e-commerce export customs clearance.

   Each region has specialized companies that focus on specific resources at ports, industrial policies, government subsidies, and other factors. For example, at Zhengzhou Airport, local company XinbaiFu Logistics integrates the 9610, 9810, and express customs clearance models with Zhengzhou Airport's Europe and America airline resources to provide cross-border e-commerce with comprehensive services that include ground operations, export customs clearance, and air freight trunk line transportation.

4. Trunk Transportation

   International trunk transportation refers to the main transportation routes in a logistics network, including air, sea, and rail trunk lines.

   In the trunk transportation phase, about 80% of small to medium-sized cross-border e-commerce logistics companies primarily entrust core agents of airlines or shipping companies to book cargo space with carriers. Meanwhile, approximately 20% of mid-tier and leading cross-border e-commerce logistics companies, which have a certain volume of cargo, adopt a combination strategy where they directly charter planes or reserve space on core main routes while purchasing capacity from airline agents on non-main routes.

   Currently, companies that regularly charter flights for cross-border e-commerce goods include ZongTeng Group, 4PX, D1 Logistics, and JCEX. On the ocean freight capacity procurement side, the most frequently used shipping companies are Matson, ZIM, and Evergreen, mainly for transporting FBA goods.

Image Source: Xiaosheng Research Institute

5. Overseas Customs Clearance

   Overseas customs clearance refers to the process of fulfilling the required procedures and submitting the necessary documents as per the laws and regulations of the importing country when goods enter the customs territory. In the overseas customs clearance stage, most Chinese cross-border e-commerce logistics companies primarily operate through outsourcing partnerships with overseas customs clearance firms. A few companies have begun acquiring overseas customs brokers, while it is rare for Chinese cross-border e-commerce logistics companies to establish their own customs clearance firms abroad.

6.Transit Distribution

   Transit refers to the process of transporting goods through one or more locations to the final destination due to the distance involved. The transit process is a critical node for logistics companies to sort and distribute goods, mainly focusing on consolidating, transferring, and exchanging goods collected from various points, enabling the flow of goods from front-end dispersion to transit consolidation and then to end-point dispersion.

   Distribution centers serve as logistics hubs with various functions, including processing, sorting, and delivering goods. These centers mainly handle storage, sorting, consolidation, linkage, and processing. The clients of distribution centers are numerous and diverse, with significant differences in nature, business scale, and the types, specifications, and quantities of goods submitted. To cater to various customers and deliver a wide range of goods simultaneously, distribution centers sort the collected goods differently and repackage and deliver them according to the distribution plan.

7. Last-Mile Delivery

   The last mile involves the cross-border e-commerce seller’s choice of local delivery methods in the destination country to get the goods into the hands of the consumer. Last-mile delivery usually relies on local logistics and courier companies in the destination country.

8.Returns Processing

   Cross-border e-commerce returned goods can be sent back either individually or in bulk within one year from the date of export clearance. For goods channeled through cross-border e-commerce, the General Administration of Customs has established three export return modes: cross-border e-commerce retail export (9610 export), cross-border e-commerce export to overseas warehouses (9810 export), and cross-border e-commerce special area export (1210).

   When cross-border e-commerce export companies and companies in special areas apply for return services, they must establish a corresponding return process supervision system, ensuring that the returned goods are the original export goods and bearing the related legal responsibilities accordingly.

   According to relevant laws, the specific return processes may vary slightly depending on the export form. For example, returns of goods under the "1210 parcel retail export" should be sent back to the original cross-border e-commerce export ledger; returns of goods under the "1210 export to overseas warehouse retail" (including consumer returns due to normal reasons or unsold goods) should be sent back to the original overseas warehouse ledger. Additionally, returns of goods exported through cross-border e-commerce special areas may be transferred to other bonded logistics ledgers within the area according to regulations, with customs implementing bonded supervision according to current regulations.

   In the stages of transit distribution, last-mile delivery, and returns processing, most Chinese cross-border e-commerce logistics companies primarily operate through outsourcing models. There is significant room for growth for Chinese companies in building their own last-mile delivery networks abroad.

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