Challenges faced by overseas warehouses and cross-border e-commerce logistics
The high cost of self-built overseas warehouses
Building overseas warehouses faces many challenges, especially for small and medium-sized enterprises. The cost of setting up a warehouse in the United States is significantly higher than that in China. Taking the United States as an example, the basic salary of workers is about US$3,000/month, which is equivalent to an annual salary of US$36,000. In contrast, the cost of warehouse workers in China is only US$2/hour. It’s as high as $14 to $15/hour. In addition, the annual rent of warehouses in the United States is usually between 30 and 50 US dollars per square meter. For a 1,000 square meter warehouse, the annual rent is US$30,000 to 50,000, and this is only the rent and does not include other living expenses and taxes.
Customs clearance risks and intellectual property issues
The customs clearance risk under the cross-border export model is higher than that in traditional trade. Since most end consumers do not have the ability to clear customs, exporters must handle it themselves or entrust a third party, which makes customs clearance more complicated. At the same time, customs regulations vary from country to country, and communication barriers increase the possibility of violations. In addition, intellectual property issues are also a thorny issue. Since 2014, many Chinese sellers have been sued for legal action and their accounts have been frozen due to suspected infringement. Such incidents remind us that with the popularity of overseas warehouses, companies will face greater legal risks once infringement occurs.
Inventory Pressure and Tax Compliance
The inventory pressure caused by early stocking should not be underestimated, especially for small businesses with limited data application capabilities. Once a product becomes unsalable, it will not only be difficult to deal with, but will also cause additional losses. On the other hand, tax issues are also prominent. For example, the United Kingdom requires all sellers using overseas warehousing services to register a VAT account. Such regulations are designed to ensure a level playing field but also add new burdens to sellers.
Logistics costs and lead times are too long
High logistics costs are another major challenge faced by cross-border e-commerce. Due to the numerous links, from domestic logistics to international transportation to foreign logistics, each link may lead to increased costs. According to statistics, cross-border logistics consumption accounts for 30% to 40% of the total transportation cost, far exceeding the international average level. At the same time, due to the multi-national customs and inspection and quarantine procedures involved, the entire logistics cycle is often long, affecting the consumer experience.
The return and exchange mechanism is missing
The return and exchange process in cross-border transactions is complex, especially when there is a lack of effective return channels. The high international shipping costs and the non-return policy of forwarding companies make returns and exchanges extremely difficult.
Full tracking is difficult to achieve
Compared with domestic logistics, the information tracking system for cross-border logistics is not yet complete. Although some developed areas can monitor the whole process, for most areas, once the goods leave the national territory, tracking becomes a luxury. This not only affects consumer confidence, but also poses considerable challenges to businesses.
To sum up, both overseas warehouse construction and cross-border e-commerce logistics are facing a series of problems that need to be solved urgently. These problems not only increase the operating costs of enterprises, but also test the wisdom and patience of industry participants.
Main problems existing in overseas warehouses
Existing problems in cross-border e-commerce logistics