For China's cross-border e-commerce logistics companies, the industry's great era has just begun...
China's cross-border e-commerce B2C occupies an absolute export advantage in the global direct shipping market. The epidemic has repeatedly led to supply chain disorders and prolonged economic recovery cycles. Whether it is short-term restocking needs or possible consumption downgrades in developed countries in the medium and long term, all of them will further increase the demand for Chinese consumer goods in the world's mainstream consumer countries.
After the adjustment of the rules of the Universal Postal Union system, terminal rates increased and the volume of parcels in postal channels declined. This also gave third-party cross-border e-commerce logistics companies greater room for development.
Especially since the epidemic, it has become increasingly difficult to obtain transportation resources, and freight costs have remained high.As the integrator of various resources and the most important infrastructure of new foreign trade, coupled with the wave of digital and intelligent changes, logistics companies can only reach a higher level and truly become industry leaders by achieving new leaps and bounds.
An era of inefficiency is over, and the focus on short-term efficiency will gradually be replaced by demands for improving stability and long-term efficiency. In the new process, the giant curtain has just opened. China's cross-border e-commerce logistics is facing unprecedented challenges and ushering in a major historical opportunity for the adjustment of the global logistics pattern.
  
Market Overview

[Note] The sending country and the receiving country involved in this part need to be understood as "postal channels". The data is recorded through 17TRACK query. It is not the official statistical data of the Universal Postal Union and is for reference only.

1. Global market structure



Looking at the world (except Antarctica), Asia, Europe and North America account for more than 90% of the total number of direct parcels received, sent and received, accounting for an absolutely dominant position.

Among them, the number of sent and received pieces in Asia ranked first, accounting for 55.35% and 40.28% respectively.
Europe ranked first, accounting for 41.06%;
North America ranked third in terms of the number of received, sent and received pieces, accounting for 33.79%, 19% and 24.55%, respectively.


2. Global mainstream market pattern




From the perspective of market concentration, the TOP1 countries in North America are the United States, the proportion of sending and receiving pieces is 85.61%, 95.36%, and the total number of sending and receiving pieces is as high as 90.32%, showing a high concentration.

The market concentration of Asian origin countries is high, the top two China and Hong Kong, China, accounted for a total of 90.23%;

The recipient country market is relatively loose, the top three countries are Japan, Israel, China, the first three countries accounted for a total of 56.17%.

The concentration of the European market as a whole is not high, the number of received and sent pieces of the top three countries accounted for a total of 40.81%, 51.25%, the total number of sent and received pieces accounted for 45.80%, not more than half;
Among them, the top 1 countries in the amount of received and sent pieces are the United Kingdom, and the proportion of sent and received pieces is only 15.43% and 19.32%, and there is still a huge space to be explored.

3, China's export direct market pattern


As the world's largest exporter in the field of cross-border e-commerce B2C direct delivery, according to the volume of packages sent in the first three quarters of 2021, the top 10 countries and regions are: the United States, Japan, Germany, Canada, the United Kingdom, France, Russia, Australia, Spain, Brazil.
Among them, the United States accounted for 31.98%, compared with the share of 37.94% in 2020, a slight decline, but still ranked first with a strong position; The rest of the world's share hovers between 2% and 6%.
Japan ranks second with 6.52%, the largest increase among the TOP10 countries compared with 3.38% share in 2020 and 7th place. The UK ranks fifth with a share of 5.54%, compared to its share of 6.70% in 2020 and its ranking of second place, which is the most obvious decline among the top 10 countries.
Brazil moves into 10th place with a share of 2.17% (11th with 1.17% in 2020), while Italy drops out of the top 10 with a share of 0.94% (9th with 2.73% in 2020).
【 Market Overview .Summary 】
In general, in the field of cross-border e-commerce B2C direct hair, the flow of global direct hair packages is basically consistent with the global trade pattern, and it is still a pattern of "Asia supplies the world,Europe and the United States dominate consumption".

China's cross-border e-commerce B2C has an absolute export advantage in the global straight hair market; The first tier of consumers is still dominated by the United States, while the United Kingdom and Japan, as the second tier of consumers, occupy an important position in their respective regional markets. Compared with the highly mature North American market, the concentration of the European and Asian consumer markets is low, and there is still a lot of space to explore.

For Chinese exports, the United States remains the largest consumer destination. With the withdrawal of the United States from the Universal Postal Union and the rise of terminal rates, the parcel volume of the mail channel has declined, but at the same time, it has also brought more development opportunities to third-party cross-border e-commerce logistics companies. In addition, the epidemic has repeatedly led to supply chain disruptions and prolonged economic recovery cycles, which will further increase the demand for Chinese consumer goods in mainstream consumers such as the United States, whether it is short-term replenishment demand or a possible consumption downgrade in the medium and long term.

Xiaosheng index
[Note] In this part, Xiaosheng Research Institute conducted a questionnaire survey on China's cross-border e-commerce logistics benchmarking enterprises, combined with industry key elements and platform data and other data, and finally obtained the B2C direct logistics index of China's cross-border export e-commerce. The index system has a total of Ⅲ levels, the value is 0-1, with 0.5 as the reference standard value, from the bottom to the top, the total average, and finally get the total value of China's cross-border e-commerce B2C direct logistics index.

4. Volume index




In the first three quarters of 2021, the total value of China's export direct shipments index was 0.69, 38% higher than the standard value of 0.5;

From the first quarter to the third quarter, the direct shipment index was 0.84, 0.68, 0.55, showing a slow decline, but all were above the standard value of 0.5, and the overall situation was good.

Referring to the global air cargo demand released by IATA, the monthly year-on-year data for 2021 and the pre-pandemic 2019 show roughly the same trend as the direct shipments index.
The difference is that the demand for international air cargo peaked in April, while the direct shipments of Chinese special line companies reached their peak in the first quarter, which may be related to the advance lead time of Chinese sellers prompted by the epidemic.
In addition, with increasing congestion in the seaborne supply chain, air freight has become more cost competitive and reliable relative to container shipping.
IATA data shows that before the pandemic, the average price of air transport was 12 times higher than sea transport; In September 2021, air freight is only three times the price of sea freight. The dispatch reliability of ocean shipping companies has also decreased, which was 70% to 80% before the epidemic.
In May 2021, the reliability dropped to 40%.
Based on this, sellers in the choice of logistics solutions will be more inclined to air freight in order to quickly replenish inventory when demand rises, which to a certain extent also led to the overall growth of China's export direct shipments.

4.1 The proportion of cargo volume of different logistics channels


Most of the enterprises participating in the survey are third-party cross-border e-commerce logistics enterprises with special line small packages as their main business, so nearly 70% of the surveyed enterprises (hereinafter referred to as "enterprises") account for more than 50% of the total volume of special line small packages;Postal channels and express channels accounted for mostly less than 30% of the volume of goods.To a certain extent, this also reflects that the development maturity of China's cross-border e-commerce logistics companies has reached a certain level.

From the point of view of the shipments of all channels, 42.35% of enterprises, the shipments of North American lines are greater than 50%;47.06% of enterprises, the European special line shipments between 30% and 50%;Japan-south Korea special line, Southeast Asia special line shipments are mostly less than 30%;The proportion of enterprises that have not opened a special line in Southeast Asia is 45.88%.On the one hand, the North American and European markets show a high degree of concentration;On the other hand, the untapped emerging market space is still huge.

4.2 Proportion of different product/customer types

From the perspective of product type, up to 96.47% of enterprises, general product shipments accounted for more than 50%;45.88% of enterprises, live products accounted for more than 50% of shipments.Referring to CICC's sorting out of the inventory of different industries in the US market, the current low inventory level is mainly concentrated in auto parts and textile and clothing, while the inventory replenishment of household appliances and home improvement, which were previously at a low level and in high demand, has been basically completed.Among the different products mentioned above, some electronics, textiles and leather are more dependent on China, and these products happen to be highly aviation preferred products.Therefore, in the coming period of time, strong market demand is still expected to provide support for the growth of China's export direct shipments.

From the perspective of customer type, nearly half (48.24%) of the enterprises, more than 50% of the goods from large and medium sellers;More than half (62.35%) of the enterprises, small and medium-sized sellers accounted for between 30% and 50% of the goods;
The proportion of factory sellers is mostly less than 30%.It can be seen that mature medium and large sellers are still the main contributors to the shipments of small packets, and the long tail effect of small and medium-sized sellers does not show obvious advantages in the total amount of shipments, and factory-type sellers are yet to be developed.

5. Capacity index


In the first three quarters of 2021, the total value of China's export direct shipping capacity index was 0.51, 2% higher than the standard value of 0.5; The transport capacity index in the first and second quarters was 0.63 and 0.64 respectively, both higher than the standard value; In the third quarter, it fell to 0.26, 48% below the standard value, and was in a state of shortage of capacity.

With reference to the international air cargo capacity released by IATA, the monthly year-on-year data for 2021 and 2019 before the epidemic,In addition to the slow increase in capacity for European airlines since the second quarter, the other airlines and the overall capacity curve showed roughly the same trend as the capacity index, that is, the general decline in capacity in the third quarter.However, according to the latest data feedback in October, the overall international air cargo capacity began to pick up.

6. Timeliness and rate


In the first three quarters of 2021, the total value of China's export direct aging index was 0.5, on par with the standard value.Among them, the timeliness index of postal channels is 0.32, 36% lower than the standard value; The timeliness index of express channel was 0.51, 2% higher than the standard value; The timeliness index is 0.66, which is 32% higher than the standard value.

The total value of the freight index was 0.8, 60% above the standard value. Among them, the freight index of postal channel and express channel is 0.76, which is 52% higher than the standard value; The freight rate index of special line small package channel was 0.87, 74% higher than the standard value.

The time-price ratio, that is, the ratio of time-efficiency index and freight index, reflects the time-efficiency level of logistics channels under a given freight rate. In the first three quarters of 2021, the total value of China's export direct delivery price ratio was 0.62, the postal channel price ratio was 0.42, the express channel price ratio was 0.67, and the special line small package channel price ratio was 0.76.

On the whole, the special line small package channel has shown obvious advantages in terms of the overall effectiveness level.





The total time index of dedicated channel is 0.66, which is 32% higher than the standard value.
Among them, the timeliness index of North America line, Europe line, Japan and South Korea line and Southeast Asia line were 0.66, 0.71, 0.79 and 0.57, respectively, which were all higher than the standard value of 0.5.

The total freight index of special channel is 0.87, 74% higher than the standard value.

Among them, the freight index of North America line, Europe line, Japan and South Korea line and Southeast Asia line was 0.87, 0.95, 0.72 and 0.83, respectively, which was at a high level relative to the standard value of 0.5.

The total price-to-time ratio of the dedicated channel is 0.76, the price-to-time ratio of the North American line, the European line, the Japan-South Korea line and the Southeast Asia line is 0.76, 0.74, 1.10 and 0.68, respectively, which are higher than the total price-to-time ratio of China's export direct.
At present, cross-border e-commerce B2C logistics generally has pain points in terms of timeliness and freight rate. The deep reason behind this is that cross-border logistics links are complicated, there are many participating enterprises, and information transmission is difficult to be transparent, which increases the difficulty and complexity of connecting all links.
With the evolution of international trade pattern and gradually keeping up with supervision, the cross-border e-commerce B2C market has put forward higher requirements for the overall logistics service. With the opening up and efficiency improvement of the supply chain of the key lines of the head line company, more and more standardized logistics products that take into account the effectiveness and cost performance of the cross-border e-commerce new foreign trade will also usher in a broader space for development.

7. Business index

The total value of China's direct export business index is 0.51, which is 2% higher than the standard value. Among them, the total profit index value is 0.56, and the profit index in the first three quarters is 0.58, 0.56, and 0.54 respectively, which is stable at 8%-16% higher than the standard value; the capital turnover index is 0.59, 18% higher than the standard value.
The overall situation is improving.



The business cost index is 0.85, 70% higher than the standard value. Among them, the purchasing cost index of transport capacity is 0.99, which is 98% higher than the standard value, ranking first in the subdivision business index;The human cost index and the system development and maintenance cost index were 0.95 and 0.84 respectively, both at high levels.The marketing cost index is 0.62, which is in the lowest position in the sub-business index.
Business expectation index 0.72, 44% higher than the standard value;Among them, the expected index of 2021 annual turnover and 2021 annual goods volume are 0.88 and 0.87, respectively, which are more than 70% higher than the standard value and at a high level;The full-year 2021 profit expectation index is 0.41, 18% below the standard value.

In addition, with the increasing uncertainty of the external environment, strict risk control has become a consensus, and logistics enterprises generally tighten the account period of customers.Logistics enterprises whose account period to customers is less than 7 days account for the highest proportion, reaching 41%;Only 17% of logistics companies have a customer account period greater than 30 days.

【 Xiaosheng Index · Summary 】



In summary, the total value of B2C direct logistics index of China's cross-border export e-commerce is 0.6, 20% higher than the standard value, and the overall situation is good.

Under the influence of multiple factors such as the repeated global epidemic, transport channel congestion and supply chain obstruction, it is increasingly difficult to obtain transport capacity resources and freight costs remain high.As the integrator of various resources and the most important basic setting of new foreign trade, cross-border e-commerce logistics is facing unprecedented challenges and dividends of The Times, superimposed digital and intelligent change waves, the huge historical opportunity of global logistics pattern adjustment is coming.The ensuing digital transformation of enterprises and organizational manpower adjustment have become the only way for the development of China's cross-border e-commerce logistics enterprises.Therefore, for many logistics enterprises, in the case of a sharp rise in the cost of transport capacity procurement, they still spare the cost input in organizational manpower, system development and maintenance;Accordingly, marketing did not show more emphasis on cost in this survey.

On the whole, an era of inefficiency is over, and there is less room for the extensive use of production factors and the waste of resources.In the new process, resource acquisition costs and enterprise operating costs have increased, and short-term efficiency may be affected, but from the perspective of improving stability and long-term efficiency, it will be helpful.For example, the low inventory strategy, although it improves efficiency, increases vulnerability, and may cause greater losses in the event of sudden shocks;Changing the low inventory strategy, although it will bring an increase in costs, but on the whole, in exchange for stability and long-term efficiency improvement.

The giant curtain of the big era of the industry has just opened, for logistics companies, only by realizing a new leap can they enter a higher level and truly become the industry leader.

[Note] The sending and receiving countries involved in this part should be understood as "mail channel", the data recorded through 17TRACK query, is not the official statistics of the UPU, for reference only.

8. Global air cargo demand

Figure 30: Data from the International Air Transport Association (IATA), dotted lines are estimates

According to the International Air Transport Association (IATA), global air cargo demand in 2021 compared with the same period in 2019 before the epidemic, except for the negative growth of 0.3% in the Asia-Pacific airlines in March, the rest of the mainstream market all routes showed positive growth.

Global air cargo demand fluctuates steadily at around 10% year-on-year on average compared to the pre-pandemic level.Among the three major markets in North America, Europe and Asia, North American airlines rose the most, floating at a high level of about 20%;The African market from February to October 2021, with an average year-on-year growth rate of 31.58%, once surpassed the largest increase in the North American market.

9. The New World of Africa





According to 17TRACK data, in the first three quarters of 2021, the volume of straight parcels sent and received in Africa has the strongest growth among all regions in the world.Even compared with the rapid growth in 2020, the total number of deliveries in the first three quarters of 2021 in Africa still reached 25% year-on-year, and the total number of shipments reached more than 50% year-on-year.Among them, in the second quarter of 2021, compared with the second quarter of 2020, the number of received items was as high as 135.5%, and the number of sent items was as high as 104%.

According to the data of the International Air Transport Association (IATA), compared with the same period before the epidemic in 2019, the international air cargo capacity in 2021 and all mainstream markets showed a significant downward trend, even the strong North American airlines also showed an average negative growth of 0.26%, while the African airlines still achieved a positive growth of 2.26% on average.

In fact, in Africa, e-commerce has been a hot entrepreneurial project.According to Disrupt africa, a Nigerian financial media report, as early as 2017, 36.4% of Nigeria's startup investment went to e-commerce companies, with a total investment amount of 12 million US dollars.

Africa's retail sites lack infrastructure, but mobile phone penetration is high, and the fermentation of the epidemic has further promoted the growth of online consumption.Online retail in Africa currently accounts for only 3.5% of total retail sales, but a total population of 1.35 billion, rapid population growth, a younger demographic, and an improving logistics market make Africa a treasure to be missed on the cross-border gold mining road.A report from McKinsey predicts that with the increasing Internet penetration in Africa, online retail sales in Africa are expected to increase to 10% of total retail sales by 2025.

10. Other emerging markets

According to 17TRACK data, in the first three quarters of 2021, the region with the fastest growth in total shipment volume was South America.
Compared with the first three quarters of 2020, the total shipment volume from South America increased by nearly 90% year-on-year;
Among them, the shipment volume in the first and second quarters was as high as 200.87% and 139.7% year-on-year respectively.

[Trend Outlook·Summary]
Mr. Li Cong of Zongteng Group predicted in the "2021 China Cross-border E-commerce Logistics Industry Blue Book" that online consumption in 2021 will still maintain a large growth compared with 2019, but the marginal growth rate will decline. Compared with 2020, There is even the possibility of a local callback.The economy will slowly move toward reopening, with significant changes expected in the second half of 2021 and into 2022.

With the frequent occurrence of trade frictions and gray rhinoceros incidents, countries are more inclined to gradually turn inward the original production methods of transnational subcontracting and long vertical chains out of consideration for the security of national industrial and supply chains;Coupled with the gradual popularization of automated and intelligent equipment, labor costs are no longer a key factor in industrial transfer, further promoting countries to move their core industries and core links closer to the country and their surrounding areas.High-tech, high-value industries are beginning to show short-chain and regional characteristics, and these industries happen to be industries with a high degree of aviation preference.

With the blessing of a new round of epidemic, cross-border e-commerce and new foreign trade have shown a powerful force to fight against uncertainty.According to the "Survey Report on the Survival Status of Foreign Trade Enterprises in 2021" released by the import and export managers,The proportion of Chinese foreign trade companies choosing e-commerce platforms to develop international markets has increased from 29.4% in 2017 to 37.5% in 2021, showing an increase for five consecutive years. The growth in 2021 is the most obvious compared to 2020, with an increase of 6.2 percentage points.With the emergence of a new pattern in the global industrial chain, there will be increasing demand for import and export of high-value and time-sensitive goods.The consumer Internet and industrial Internet under the digital economy have more efficient and precise requirements for logistics, further promoting the growth of demand for cross-border e-commerce air transportation.

For dedicated line logistics, on the one hand, due to the pressure of rapid development of overseas warehouses, more emphasis will be placed on timeliness construction to narrow the timeliness gap with overseas warehouse distribution;Therefore, dedicated line logistics will show an obvious trend of express delivery.On the other hand, not many new players have entered the field of dedicated line logistics since the epidemic, and even old players are decreasing. The concentration of the dedicated line logistics industry will further increase;
The influx of domestic express delivery giants will make the competition on this track more interesting. 2021-2022 may become the track with the most opportunities to hit the tens of billions of single units.

References:
1. CICC: "CICC 2022 Outlook | Global Economy: An Era of Inefficiency is Ending"
2. Yin Chunjian: "Discussing the improvement of my country's international air cargo capacity from the perspective of international trade"
3. Roland Berger: "White Paper on New Opportunities for Cross-Border Logistics in China under the Background of the Epidemic"
4. McKinsey: "New Model of Cross-Border Logistics: One Order to the End"