What Considerations Are Required to be Made for a Cross-Border E-commerce Logistics Company?

Cross-border e-commerce logistics, as the backbone and strong partner of e-commerce, is restricted in logistics distribution for some products due to trade rules and security factors. How to improve gross profit margin is a key concern for cross-border e-commerce practitioners. Cross-border e-commerce logistics Company can consider from three aspects: technology system, supply chain management thinking, and big data thinking3, in order to reduce costs and increase profits.

Four Major Issues Facing Cross-border e-commerce logistics

Slow logistics distribution

Most domestic cross-border e-commerce parcels are delivered through postal services, with China Post accounting for about50% of the market share. Although there are many channels, the stability of timeliness is not high. Currently, it takes about10-15 days for delivery from China to the United States. For countries farther away, the delivery time is even longer, sometimes even taking months, which severely restricts the development of cross-border e-commerce.

Difficulties in tracking goods after leaving the country

The delivery system in China has basically achieved real-time tracking of packages. However, many cross-border parcels are difficult to track after leaving the country. This situation is not a problem in countries with developed logistics and widely spoken languages such as the United States and Australia. However, in countries and regions where languages are not widely spoken and logistics are underdeveloped, it is difficult to query the information of packages in a timely manner, making it difficult to achieve full tracking of the cross-border process.

Difficulties in returns, slow customs clearance

The biggest difference between cross-border logistics and domestic logistics lies in the fact that the former involves two different country customs: the exporting country and the destination country. In export e-commerce, the customs of the destination country is crucial. Sometimes, customs inspections and seizures occur frequently, and the results of handling are basically three types: direct confiscation, return to the sender, or request for additional document information. Regardless of the situation, it will cause significant losses to the buyer.

Susceptible to damage and loss of fragile items

From the collection to the final delivery to customers, cross-border e-commerce logistics usually involves four or five or even more transfers, making it prone to package damage. Even with specialized logistics, there is still a certain loss rate. This not only increases the seller's compensation for goods damage but also brings a bad shopping experience to the buyer, resulting in customer loss and other losses.

How to Improve Cross-border e-commerce logistics Gross Profit Margin?

In order for cross-border e-commerce logistics companies to achieve a relatively high gross profit margin, the key is to reduce costs.

Robust and Sophisticated Systems

A well-developed and powerful system forms the foundation for effectively ensuring the efficiency of services. Cross-border logistics enterprises, in particular, need to prioritize the development and investment in systems. Providing a well-rounded and robust operational system is not only the cornerstone of long-term development but also an effective way to reduce human errors, indirectly lowering costs.

Supply Chain Management Thinking

Cross-border e-commerce logistics is more complex than domestic logistics, involving longer logistics chains and the participation of multiple companies. Supply chain management must be applied to daily operations, and companies need to cultivate a supply chain management mindset.

Efficient collaboration is essential for the long logistics chains in cross-border e-commerce logistics to seamlessly connect and ensure smooth operations. In the face of unexpected issues, swift responses from both or even multiple cooperating partners are crucial. Rapid and accurate assessments and actions are necessary to avoid providing customers with a negative experience, ultimately preventing the loss of customer groups.

Big Data Thinking

Cross-border e-commerce logistics companies possess vast data foundations, constituting a significant resource advantage. Data is the driving force behind production. Continuous exploration of data value, analysis of customer needs, and the provision of services beyond expectations are essential. This approach leads to increased customer satisfaction and loyalty, subsequently yielding higher profits and market share.