80% of sellers "lost their halberds and sank into sand": Overseas warehouse into gambler's money crusher?
Source of the following article / houlang small class (id:hlxxb2020)
Author / houlang school
01
Stress crisis of logistics supply chain
In the first quarter of 2022, domestic small and medium-sized foreign trade enterprises achieved a good and stable start, and also showed strong industry resilience in the complex competitive environment of international foreign trade. However, according to the report on the export trade (B2B) index of small, medium and micro enterprises in March 2022 jointly released by the commercial industry committee of the China Council for the promotion of international trade and xtransfer recently, with the multiple rounds of shocks of the domestic epidemic and the changes in the international supply chain caused by the complex factors of the international situation, it has affected many real industries, posing a severe challenge to the foreign trade and economic situation since April.
Under this economic environment and industry background, the existing uncertainties are still increasing. Whether the overall foreign trade environment, including the cross-border e-commerce industry, can survive the crisis has become a basic demand commonly expressed by the industry.
This comprehensive crisis of the industrial chain is the most powerful manifestation, that is, it is directly manifested through the cross-border logistics industry, and logistics is also an important foundation to ensure the normal operation of the economy and society. Wang Xue, who has been engaged in cross-border trade in Fuzhou post for many years, said to Hugo that although the comprehensive supply chain crisis comes from the uncertain factors of the resumption of work and production in many domestic cities, the comprehensive impact of the Shanghai epidemic on domestic and international logistics ports is the main reason.
He said, "let alone say that the domestic primary and secondary logistics providers and freight forwarding industry have been hit hard." the recent so-called freight forwarding price war is more caused by a kind of "begging" behavior in the logistics industry under the tragic situation. "Wang Xue said," even those international logistics giants have been hit hard in the face of the severe situation. ".
Hugo learned from the exclusive cross-border channel that the overall operation of China Post's international business from January to April 2022 showed the seriousness of the situation. The postal revenue was 2.98 billion yuan, a year-on-year decrease of 36.3%. In terms of amount, a year-on-year decrease of 1.7 billion yuan was achieved, and 21.5% of the budget was completed.
From January to April 2022, the five major strategic customers of postal international business achieved a cumulative revenue of 910million yuan (including online and offline), a year-on-year decrease of 32%. They are rookie & Express, sheen, zoumabang, Amazon and wish. From January to April, the postal business volume from sheen was 580000; The revenue was 53.2 million yuan. Shipments of zoumabang, Amazon and wish are restricted.
From the perspective of line by line, the revenue of the 12 key directions of postal international business decreased year-on-year from January to April, of which Japan had the smallest decline (-19.76%), followed by Brazil (-30.43%) and Russia (-36.36%). Europe, the United States and Australia saw a decline of more than 50% - the decline in the United States was -61.51%, and that in Italy was close to -80%.
According to the public information, the number of international ships between Chinese Mainland and Hong Kong by large international logistics providers including Maersk, mediterranean shipping, Herbert Roth shipping company and Dafei shipping has decreased significantly, and the vessel traffic volume has declined, which is the fundamental reason for the recent rise in shipping prices and the shortage of containers.
In particular, the impact of this round of "closure" of Shanghai has a profound impact on the overseas logistics system of Chinese foreign trade enterprises. During the delivery process of the outgoing goods to the destination, including land transportation, customs declaration, inspection, customs clearance, warehousing and other transactions, the cost and duration are increasing and delayed. It will bring even greater pressure to the domestic foreign trade enterprises that are already facing difficulties.
Especially in the aspect of warehousing, a large number of goods are overstocked due to the uncertain factors of cargo transportation, and the warehousing costs of all links in the foreign trade supply chain are also rising.
In 2021, China's cross-border trade base grew significantly, which also put great pressure on the logistics service requirements and efficiency in 2022. Fu Long, the head of a freight forwarding company in Xiamen that has great influence in the local and even national industries, gave Hugo a more specific description of the recent port congestion and logistics crisis caused by the "closure" of Shanghai.
He said that as an important domestic port for foreign trade import and export, if Shanghai cannot export from Shanghai, it will also cause more serious pressure on surrounding ports, such as Ningbo port and Fuzhou port. "Many enterprises choose to ship goods from Ningbo port, which has also caused serious congestion"; As long as the container stay time in Ningbo port is continuously extended, the delivery time of goods is also continuously delayed.
Although the congestion of the ports around Shanghai is completely different from the nature of the crisis in Shanghai, "the actual congestion scale and the situation in Shanghai finally seem to be half a kilo to eight Liang", and the same is that goods "can not go in or out".
However, the logistics crisis caused by the stagnation or congestion of the port started in the surrounding areas, and the comprehensive crisis of production, logistics and storage broke out together; According to the report of competitiveness index of small, medium and micro foreign trade enterprises in China in mid March 2022, due to the transient pressure on logistics warehousing, truck transportation and port transportation in key foreign trade cities caused by multiple domestic epidemics, the efficiency of the supply chain is relatively low, and the average delivery time is extended from 29 days in November 2021 to 31 days. "In the coming period of time, China's foreign trade enterprises will still face a grim situation. The ports in the main export markets will be congested, the container turnover period will continue to be sluggish, international logistics bottlenecks will still exist, and freight rates will remain high for a period of time."
Liuyaoxin, the person in charge of Anhui provincial key auto parts manufacturers, told Hugo that large equipment manufacturers like him, who are generally very concerned about "quality assurance" and have always maintained confidence in the "quantity" of products and on-time delivery, have also increased their usual stock up due to the uncertainty of transportation time caused by the logistics crisis.
Lin Jie, a big seller of 3C in Shenzhen, also told Hugo that because of the large demand, she has always focused on stabilizing the stock quantity of overseas warehouses. The recent logistics pressure caused by the "closure" of Shanghai has led her to increase the stock cycle from quarterly to at least half a year.
Fu Long, a freight forwarder in Xiamen, also said to Hugo cross-border, "many sellers have recently increased their stocking volume. They are very busy in both overseas warehouses and direct logistics, but this has made the congestion worse. At the same time, in the case of poor logistics, they have to pay higher storage management costs and operation costs, and at the same time, it has caused greater pressure on sellers and logistics enterprises.", "On the one hand, the logistics crisis, on the other hand, now the logistics freight forwarder seems to be active again, which is like a financial foam". In his opinion, if the shipping cost is further increased, the "bets" of sellers and logistics providers may be higher. Finally, a little carelessness may be a devastating blow to the industry. The logistics crisis may be pushed to the extreme by madness and agitation in the false prosperity around the industry.
However, Wang Xue said that the situation did not look so pessimistic. Although logistics is the axis and final destination of the whole cross-border trade, the logistics crisis is indeed "a major stress test for the whole cross-border industry". At this stage, many people in the logistics industry, including cross-border platform sellers, believe that cross-border seller enterprises and freight forwarders will lose half or even more in the industry crisis ", but from the overall trend, Cross border e-commerce represents the development direction of world trade. As long as there is demand, even if demand is created, the trade channels are generally unblocked. Once the logistics crisis is over, China's cross-border trade will "spring again".
02
Speculation on the death cycle of overseas warehouse in the past 100 days
In cross-border trade, especially in cross-border e-commerce platforms, what is more obvious and complex is that trade orders play a fundamental role in driving and guiding logistics activities. Fu Long said that in recent years, in the cross-border e-commerce business, many former cross-border sellers have followed the example of zongteng's transformation and entered the market to start a freight forwarding business. "But these people have come to speculate. In recent years, more and more people speculate on cross-border sellers, and naturally many speculate on freight forwarding." he told Hugo cross-border that speculation is not terrible, because most of these speculators are only "second tier merchants". However, as the tide rises, some people become experienced sellers from small sellers, and then become freight forwarders or even first-class logistics providers. Zongteng is the most typical case and example.
Why did this happen? Fu Long said that the cross-border small white sellers who have entered the site now seem to be swarming and mighty. However, based on his experience in contacting various foreign trade enterprises and platform sellers for many years, the most important sign or threshold to truly grow from a small white seller who has just entered the site to a senior seller is "not only how much data to earn", but also the qualification and ability to link "logistics" management, That is, the degree to which enterprises or sellers attach importance to and understand the "inventory management model". Once you have a deep understanding of the system from inventory management to logistics operation, you may also have the ability to engage in or identify "freight forwarding" business.
Hugo cross border recently found in the survey and data analysis that the pattern of the logistics industry has changed greatly since the epidemic in 2020. Before that, direct logistics accounted for more than half of the industry's business. During the epidemic, a large number of flights were grounded, which directly affected the efficiency of direct logistics. The seller has to consider preparing goods in advance in overseas warehouse.
According to the data of the Ministry of Commerce in december2020, the number of overseas warehouses in China has exceeded 1800 since the outbreak of the epidemic. Last year, the growth rate reached 80% and the area exceeded 12million square meters. However, even the overseas warehouse with such rapid development can not well meet the "appetite" of the seller.
Lin Jie's company, during the epidemic period, also encountered problems such as direct hair failure, FBA and overseas warehouse restrictions, unstable shelves, tail journey restrictions, etc. She said, "our stores were almost downgraded because the orders could not be delivered in time for a long time, and some stores in the same industry were directly closed.". The panic of sellers to replenish a large amount of "safety stock" spread to the "herding effect" of the industry as a whole, resulting in almost all overseas warehouses in 2020 being "out of stock". According to public data, the replenishment tide in 2020 mainly occurs from April to July and from November to December when the global shipping price rises.
Finally, the problem of difficult delivery for a whole year was solved. Lin Jie's overseas warehouse in the United States next encountered a more serious problem. "The company prepared enough goods for 150 days according to the normal sales rate, but after 100 days of sales, the sales rate began to decline gradually." seeing that the sales rate of goods began to decline, Lin Jie resolutely promoted at a price lower than the cost price in order to prevent unsalable goods, Finally, the inventory will be digested in about 200 days.
Hugo cross border also learned the 2020 data of the inventory turnover index model of the valley warehouse through relevant persons of zongteng group, and saw that it was basically consistent with the case of Lin Jie company. The model obtained the comprehensive data of the global overseas warehouses of the valley warehouse through the analysis of weighted factors such as country, warehouse age and category. The data shows that the maximum inventory turnover rate of the barn, that is, the fastest time period for the seller to sell goods, is that the average warehousing of goods is 60-90 days, and the turnover index rises by 21.9 within 30 days, while the turnover growth index is less than 6.0 within 30 days between 90-120 days. The monthly average growth index is less than 1.0 in 180 days -270 days.
According to the model data reflected in the overseas warehouse of the barn that ranked first in the top10 in the 2021 Xiaosheng ranking list, it can reflect the basic situation of Chinese sellers like Lin Jie's overall de stocking in overseas warehouses. The average period of 60-90 days for sellers as a whole is a relatively easy stage of de stocking pressure. Once the average stock age of goods exceeds about 100 days, the sales rate drops sharply. In particular, 180-270 days is a key period of de stocking pressure, and even has entered the "unsalable" stage during this period. During this period, perhaps earlier than this stage, sellers often start to adopt discount promotion, or even low-cost dumping to digest inventory.
Fu Long also said that once the goods stored in the overseas warehouse have exceeded 365 days, the best way to deal with the goods is to "change the standard", republish the link, modify the description information of the goods and other means, but the logistics provider should re collect and withdraw the warehousing fees. However, some sellers choose to distribute or destroy the goods from the perspective that the logistics cost has exceeded the value of the goods.
270 days is not only a stock age node reflected by the barn model data. In Amazon's notice on "Amazon logistics over age inventory surcharge" published on May 15, 2022, 270 days is also used as a node: for goods from 271 to 365 days, Amazon will charge a surcharge of $1.50 per cubic foot. For goods stored for more than 365 days, Amazon will charge a surcharge of $6.90 per cubic foot, or a surcharge of $0.15 per piece of goods. (whichever is greater)
The 60-90 day average inventory "safety period" reflected in the inventory turnover model data of Valley warehouse basically corresponds to Lin Jie, who almost fell into trouble in overseas warehouses during the first wave of epidemic in 2020. In response to the inventory management strategy changed since the "closure of Shanghai", Lin Jie adjusted the original 60 day stocking cycle to 90 days, but did not cross this average safety node.
This may reflect that some Chinese sellers are gradually maturing. By improving their awareness and ability to test sales and strengthen inventory data management, they do not blindly follow the panic "herd effect", and choose to gradually consider the strategy of expanding shipment volume by steadily increasing sales.
But how many overseas inventory sellers like Lin Jie now have? According to the survey data recently released by ecosoc.com, 80% of the sellers are facing problems in overseas warehouse operation, 70% of the sellers choose to dump at a price lower than the cost price, and 10% of the sellers finally choose to destroy the goods because of long-term unsalable.
Based on the above data of the inventory turnover model of the valley warehouse, it means that only 20% of the sellers may be able to digest the inventory in the overseas warehouse within 100 days on average, while 70% of the sellers in the overseas warehouse are conservatively estimated to be under great de stocking pressure no later than 180 days on average, and start dumping at low prices no later than 270 days on average. 10% of the sellers have an average stock age of more than 270 days, or even more than 365 days, facing a serious unsalable crisis of goods destruction or distribution.
It can be seen that Lin Jie, a skilled storage management expert, has a low proportion of overseas warehouse sellers. However, the inventory problem, which accounts for 80% of the total amount of overseas warehouses, accounts for such a huge proportion of the problem. It is also difficult for the seller to fully explain the weak awareness of warehouse management, the chaos of the overseas warehouse industry, and the anti risk ability of the overseas warehouse model to be improved.
According to Fu Long's long-term experience in freight forwarding overseas business and his observation of the existing supply chain and cross-border market, although the overseas epidemic in 2020 led to a surge in e-commerce consumption, the growth rate can be described as "one year to ten years". However, the supply-demand relationship in the cross-border market may have been out of balance to a large extent. "There are not so many sellers, or the market has so strong consumption capacity, and so many goods are bought on the e-commerce platform." he believes that the large-scale overage of the overall inventory of overseas warehouses and slow-moving goods are more mainly due to the "herd effect" of the sellers' panic increase in the stock since the outbreak of the epidemic, While exerting great pressure on the entire supply chain, it also intensifies the "bullwhip effect" of cross-border sellers on the variation and amplification of the demand for switching to overseas warehouses.
In other words, the cross-border market may not need so many goods, so many sellers, and so many overseas warehouses. "There is a possibility of foam in overseas warehouses," he said. "Otherwise, it is difficult to explain why so many sellers fall into inventory problems in overseas warehouses and are forced to choose dumping, distribution and destruction.".
As a big seller, Lin Jie gives different guesses and interpretations on the phenomenon of "bullwhip effect" in overseas warehouses. She believes that compared with domestic buyers, overseas buyers should be more cautious or even more picky when purchasing goods on the platform. If the buyer's platform operation ability is weak, plus the competitive pressure of categories, the quality of goods is poor, and the selection is inaccurate, it is difficult to stand out or even sustain. Lin Jie gave an example to illustrate that "a seller doing cross-border e-commerce is like learning Japanese. At first, it feels that the threshold is not high and it is easy to get started. However, if you want to learn better and understand better, the threshold will become higher and higher. If you can't continue to explore, you may give up halfway". The same is true for cross-border e-commerce. Therefore, "it is not surprising that only 20% of the sellers can digest overseas warehouse inventory in about 100 days on average". What the seller should do is to continuously improve the platform operation and warehouse management capabilities, and strengthen product research and development.
In view of the new round of logistics crisis caused by multiple rounds of shocks since the "closure of Shanghai", Hugo cross-border visited a number of logistics providers, large enterprises and platform sellers to synthesize the above information. It shows that since the outbreak of the first wave of epidemic in 2020, the problems of "herd effect" and "bullwhip effect" in the overseas warehouse ecology may have already been lurking in order to meet the logistics crisis and the overall supply chain.
In this state of latent crisis, the "logistics crisis" such as the rise in shipping prices caused by the epidemic and port congestion is only the fuse and the last straw for the overall ecological crisis of the supply chain, including platform sellers. Even under the pressure of this crisis, senior sellers such as Lin Jie, who learned the lessons from the first round of crisis, decisively increased the inventory preparation from 30-60 days to 90 days. This is also a secondary factor aggravating the current crisis.
In an internal documentary widely circulated in the logistics industry, a small story is told. In the early years, a group of young men in the mountains found that the postal service charged a high logistics fee for each family in the village. They found business opportunities, hired their own cars to transport goods, concentrated the largest amount, and got the "highest" discount from the postal service to earn the price difference.
These young men are the first group of modern Chinese freight forwarders, and they can even be called the vanguard of the rise of modern domestic commercial logistics. One of them will either become the leader in domestic commercial logistics, or become the "local leader" of the freight forwarder, or disappear forever and forget in the Jianghu.
But unlike that time, it was a time full of opportunities. However, with the "wildfire spread" of many ecological crises caused by the current logistics crisis, we often shout when the spring breeze that revitalizes life will blow? How much do we have to pay before this time? Anxiety will we get through the difficulties, stand up again, or disappear forever?
This may not be the vigorous era of "one shot, ten thousand liang of gold" in the documentary. Since that time, there have been successes and failures in the development of China's logistics industry. Success is always a minority, and failure is always a majority. And are we ready to fail? If not, when we are working hard day and night for success, do we know that "logistics" is a lonely journey that seems to be "flowing", but it may actually be a "network of destiny" that has already been rolled out, which has determined everything. However, we may not have seen the whole of it carefully - for both the logistics industry and the overall cross-border business, this may be a moment of "fate" torture.
Source / houlang small class (id:hlxxb2020)
Author / houlang school