The integration of going overseas is not only the integration of logistics, but also the integration of industrial chain and supply chain. Under many problems, if you want to help companies go overseas better, you can't just focus on your own long board, but need to make up for the short board first.
Author|Dou Dou
Editor | Pi Ye
Produced | Industrialist
The time to go to sea is really coming. This feeling has never been stronger.
Over the past two years, going overseas has been a highly discussed area. However, in the past, going overseas was more passive, that is, seeking overseas growth under the pattern of the red sea in the domestic market; now, initiative has become a new synonym. According to a set of incomplete statistics, more than 60% of logistics companies are planning to go overseas.
As the "world's factory", China owns most of the global industrial chain and a large number of production and manufacturing needs, allowing many companies to be self-sufficient in the past many years, and even supply spillover.
Today, with China's economic development, this kind of supply-side capability needs to be undertaken by a larger market. In 2023, going to sea is already a must-answer question.
Among them, logistics is a particularly special part. As the capillary and infrastructure of commodity circulation, its value and status are easier to be discussed in the current sea.
So, as far as the moment is concerned, what new problems are logistics manufacturers facing in this sea-going revolution? Where did JD Logistics, Cainiao, SF Express, and Jitu’s Chinese logistics go overseas?
1. In the era of going to sea, we saw logistics "assassins"
The rapid development of domestic e-commerce has led to the rapid rise of express services such as Cainiao International, JD Logistics, Jitu Express, and SF Express, and gradually stand at the top of the world.
One set of data is that the parcel volume of the express delivery industry in a certain overseas developed country is less than 20 billion pieces, and China is more than five times that, accounting for more than half of the world.
Enterprises on the consumer side are always more sensitive to market changes. In the field of going overseas, e-commerce is the first batch of pathfinders.
As logistics is the infrastructure for its business expansion, overseas logistics is also on the rise. Gradually build up its own advantages, and then continue to expand the service boundary, moving towards freight logistics, warehousing and other links.
In the field of e-commerce, the pain points of overseas logistics can be summarized as three main points, namely, opaque prices, slow customs clearance and transportation timeliness, and uncontrollable terminal collection and distribution of goods.
The final result of these problems is that companies are forced to double or even several times their quotations to solve them.
"The 'management fee' for smooth customs clearance, the 'price change fee' for replacing the transport fleet... all kinds of hidden costs add up, which is equivalent to this order for nothing, and even faces losses." The logistics "assassin" has become many e-commerce merchants the pain.
In fact, the links involved in overseas logistics are complicated. In this process, many logistics nodes have not been opened up. For example, there are gaps between the platform and the logistics side, the logistics side and the warehouse, and the warehouse and express distribution.
Therefore, in the absence of business and data coordination, it is impossible to make unified deployment of goods, and it is impossible to achieve maximum cost reduction and efficiency increase in each link.
This pain point has been significantly improved as express logistics manufacturers gradually penetrate into globalization.
For example, this year's 618 Cainiao cross-border parcels have changed from waiting in the mainland for the China-Europe Express to a pick-and-go mode from Alashankou, Xinjiang, which can improve logistics timeliness. Using Cainiao’s local self-operated terminal delivery can achieve the fastest delivery on the next day, speeding up China-Europe logistics by more than 10 days and saving more than 70% of logistics costs. Under Cainiao's high degree of control over logistics, the after-sales full-link processing speed has also been shortened by more than 30%.
In addition, in August last year, JD Logistics provided cargo warehousing and logistics distribution services for Anakku’s more than 1,000 stores across Malaysia, and helped Anakku realize omni-channel orders shipped within 24 hours, increasing the efficiency of warehouse delivery by more than 30%.
From the perspective of each model, each has its own characteristics. But there is also a common direction, namely integration.
2. China logistics, an integrated and efficient contract fulfillment model
Cainiao International mainly deploys distribution centers and cross-border warehouses serving import and export trade around the world through settlement, franchising, and cooperation.
Furthermore, an intelligent customs clearance system has been established with many ports around the world, and a high-quality global logistics network has been built. And deployed the self-developed global visualization system, intelligent order combination, intelligent distribution system, overseas warehouse intelligent supply chain system, etc., to open up all the nodes in the whole process from seller's delivery to commodity distribution, and reduce costs and increase efficiency as much as possible.
However, as an "outsider" and as a manufacturer dedicated to building a logistics network, it is extremely important to be selected. In order to gain a certain competitive advantage in overseas markets, Cainiao aims at the last mile distribution scene.
The construction of logistics infrastructure in Brazil is relatively backward. For this reason, Cainiao has invested a large number of express cabinets including smart self-pickup cabinets and infrastructure resources such as large and small post stations at the end of Brazilian logistics to make up for the shortcomings of e-commerce express delivery. At the same time, it realizes the end-to-end, one-stop overseas logistics service of receiving and delivering.
This infrastructure capability can also continue to attract overseas logistics cooperation.
That is to continuously expand the overseas logistics network by cooperating with overseas logistics manufacturers. After the logistics network is expanded, it will continue to make up for the shortcomings of the last mile overseas logistics... In this way, it has created a replicable growth flywheel for its global layout.
It is worth noting that the infrastructure in Southeast Asian countries is relatively backward, creating opportunities for rookies. However, in countries such as Europe and the United States, where the land is sparsely populated and the labor costs are high, this model also has conditions for replication.
This is due to the asset-light logistics model of Cainiao Network under the digitalization. This is obviously different from the model of JD Logistics going overseas.
The sea-going model of JD Logistics is mainly "self-operated".
JD International announced in January that its retailer Super Ochama officially opened in the Netherlands. The two stores are located in Rotterdam and Leiden. This is a clear difference from Cainiao serving multiple overseas e-commerce platforms.
Obviously, JD Logistics wants to continue the model of warehouse and distribution integration overseas. The advantage is that through the pre-ordering of products, it can not only shorten the distance and time of product delivery, but also improve delivery efficiency and service. And delivery costs can be greatly reduced.
According to the performance released by JD Logistics in 2022, JD Logistics has operated nearly 90 overseas warehouses, bonded warehouses, and direct mail warehouses worldwide.
This model also gives JD Logistics certain advantages in the field of B2B freight logistics going overseas. The cost of freight logistics in the warehousing link is generally high, and it requires high agility of the supply chain. At present, Jingdong enterprise business involves the digital transformation of all links of enterprise procurement, production, logistics, warehousing, distribution and retail. It has built the advantages of its integrated supply chain. JD Logistics' integrated warehousing overseas model may attract more customers who need it.
In addition to Cainiao and JD.com, Jitu and SF Express are also deeply involved in going overseas.
For example, SF Express has launched its own all-cargo aircraft to deploy air cargo. Currently, SF Express has 69 self-operated all-cargo aircraft and opened 22 international routes for all-cargo aircraft. Its all-cargo aircraft resources are far ahead among many domestic logistics companies and occupy a place in the international air cargo market. In addition, after the acquisition of Kerry Logistics, a listed company, it has strengthened its advantages in terminal distribution network and freight forwarding.
Jitu started in the overseas markets of Southeast Asia, set up outlets in a half-self-operated, half-franchised model, quickly conquered the city, achieved scale, and occupied most of the Southeast Asian market. The advantage of localization is the key to its success.
It can be found that Cainiao’s logistics network, JD.com’s self-operated warehousing integration, SF’s self-operated cargo aircraft, and Jitu’s localization are all strong points of their respective logistics models. Different routes lead to the same goal. In order to optimize costs and improve distribution efficiency, digital empowerment is the only way to move towards integration.
In the sea scene, logistics manufacturers have also copied these longboards.
3. Logistics going overseas is difficult to copy
In the domestic market, e-commerce giants have quickly realized the scale of logistics in the field of express logistics through acquisitions and investments based on their business advantages. Each continues to build up its strengths in the domestic market and make up for its shortcomings.
However, this mode seems to "fail" in the sea scene.
Different from the domestic logistics market, issues such as data security and data access rights are increasingly being valued. One fact is how to connect overseas logistics manufacturers with data from foreign e-commerce platforms, how to connect with data from overseas warehouses, and ensure consumer data security. Need to continue to solve the optimization.
Secondly, although the outlet resources are relatively abundant under the network distribution logistics, the coverage ability of the distribution area is relatively strong. However, it faces the lack of high-quality and efficient warehouse resources. For example, compared with professional logistics companies, there is a large gap in warehouse floor height, low level of automation in warehousing operations, human efficiency, average efficiency, and picking error rate.
In addition, although e-commerce logistics has many overseas warehouse outlets, the inventory is widely distributed, it is close to customers, and the terminal market consumption data is relatively complete, it has great advantages in terms of business form, system docking, and warehousing and distribution capabilities. However, it is at a disadvantage in terms of stocking frequency, batch flexibility, and trunk transportation costs.
Finally, the salary of overseas warehouse personnel basically ranges from 2000-3000 US dollars per month. The cost of localization is very high. How to control operating costs has become a problem that many overseas warehouse companies have to consider. At present, the income of overseas warehouses with individual profitability in the market usually comes from a series of value-added services such as labeling, relabeling, transfer, return, maintenance, etc., and the income from storage fees is very limited. In addition, the mode of building logistics warehouses overseas is relatively heavy, and it is difficult to balance the benefits.
Corresponding to many shortcomings such as the difficulty in getting through the system data of overseas logistics manufacturers, the difficulty in ensuring data security, and the difficulty in making profits in the warehousing model is the high standardization of overseas logistics manufacturers.
Overseas, most governments will formulate common standards for infrastructure and equipment. For example, unified pallet standards, vehicle loading standards, item barcode standards, etc.
Under this unified standard, overseas logistics management concepts and experience are relatively advanced and mature.
A set of data shows that China's warehouse vacancy rate is 11.3%, which is twice as high as that of a developed country overseas. China's sea-rail combined transport is only 2.6%, while a certain overseas developed country is as high as 40%. In terms of logistics automation rate, China is only 20%, which is far behind the 80% of developed countries.
It is worth noting that Chinese companies are increasingly building factories around the world. TSMC’s global factory construction; BYD’s European factory site selection; CATL’s first overseas factory in Erfurt, Germany; photovoltaic company JA Solar has leased land in Phoenix, Arizona, and will invest 60 million US dollars to build its first factory in the United States…
Behind this trend is the only way for enterprises to go global and go global. The establishment of global factories by domestic enterprises can further expand the global market of domestic enterprises and increase market share and brand awareness. At the same time, it can better adapt to the needs of different countries and regions and improve the market competitiveness of enterprises. It can also reduce the operating cost of the enterprise and improve the profitability of the enterprise.
As Chinese companies build factories overseas, the ability of overseas Chinese companies and local companies to go overseas may become the next logistics vane. This means that overseas logistics capabilities are not limited to cross-border transportation between domestic and overseas regions, but also cross-border transportation in overseas regions.
To sum up, whether it is the development problems of overseas logistics manufacturers themselves, the pressure brought by overseas logistics enterprises, or the new needs of Chinese enterprises going overseas, all of them have brought new challenges to overseas logistics manufacturers.
At present, it can be seen that Cainiao and JD.com are also making continuous efforts in this regard.
On 618 this year, Cainiao International Express teamed up with AliExpress (AliExpress) to launch a number of measures. Among them, new users in 33 countries can enjoy logistics upgrade services for most of the goods placed for the first time, and the logistics time is 10-20 days faster. This kind of logistics upgrade service capability is the advantage of Cainiao Network, and it is very attractive to customers who have emergencies or need alternative solutions.
On 618 this year, JD Logistics introduced automated sorting and picking solutions in several European warehouses such as Venlo Warehouse 1 in the Netherlands. Through the cooperation of the "Diwolf" AGV handling robot and intelligent sorting robots, the picking efficiency has been improved by more than 3 times. Highly automated equipment and solutions make the production efficiency of Venlo No. 1 warehouse more than three times higher than that of ordinary warehouses.
The integration of going overseas is not only the integration of logistics, but also the integration of industrial chain and supply chain. Under many problems, if you want to help companies go overseas better, you can't just focus on your own long board, but need to make up for the short board first.