The ship of cross-border trade sails through waves, and changes in logistics tides affect every helmsman.
In August, the two international courier giants, FedEx and UPS, successively announced price adjustment news. The fluctuations in price figures are quietly changing the cost landscape beneath cross-border sellers' feet.
01 Giant Price Adjustments: Cost Pressure Surges
The rise in logistics costs has formed a multi-dimensional squeeze.
UPS took the lead in price adjustments, focusing on large goods. On August 17th, UPS will implement a new calculation standard for Large Package Surcharge (LPS).
This time, a dual accounting method of cubic volume and weight is adopted:
- For domestic packages, if the cubic size exceeds 17,280 cubic inches (approximately 0.283 cubic meters) or the weight exceeds 110 pounds (approximately 49.9 kilograms), the LPS fee will be triggered.
- The threshold for Additional Handling Surcharge (AHS) is tightened to 8,640 cubic inches (approximately 0.142 cubic meters).
This is undoubtedly a significant test for sellers dealing in large items.
FedEx's price adjustment measures are also quite impactful. Starting from August 18th, when calculating dimensional weight, all fractional inches (or centimeters) in the length, width, and height of packages will be rounded up.
For example, a box with dimensions of 9.6 inches × 13.2 inches × 17.1 inches will be rounded up to 10 inches × 14 inches × 18 inches.
This rounding method is likely to cause the package volume of sellers dealing in light and bulky goods to be "inflated" and enlarged, far exceeding the actual weight. It means that sellers need to pay extra attention to whether the product packaging size is close to the adjusted size, especially the size changes of the packaging due to during transportation, to prevent unexpected increases in express costs.
In addition to the last-mile delivery costs, the source costs of cross-border transportation are also increasing. Starting from October 14th, the United States will impose a special port fee on Chinese-related ships. Until April 2028, this fee will rise to $140 per net ton. Ships that fail to pay the fee as required will be restricted from loading, unloading goods or leaving the port.
Affected by both the courier price adjustment and the port fee increase, the upward trend of cross-border logistics costs has become increasingly obvious.
02 Impact on Sellers: Different Categories Bear Varying Pressures
Under the intensive price adjustment changes, the cost pressure on sellers is increasing geometrically, and sellers of different categories are affected differently.
For small package sellers, the loss of tax exemption dividends has already shrunk the profit margin. Coupled with the increase in express handling fees, as well as the possible increase in dimensional weight and surcharges, the pressure is even greater.
Sellers of medium and large-sized goods and heavy cargo are directly hit more severely. For example, large-sized goods such as indoor and outdoor furniture, fitness equipment, and mechanical equipment will directly incur LPS fees once their size exceeds 0.283 cubic meters.
In addition, affected by the transfer of port fees, the pressure is self-evident. As an important part of cross-border logistics, the increase in sea freight costs will have a significant impact on the cost structure of the entire supply chain.
Overall, sellers' profit margins are squeezed by multiple factors - pricing strategies, product selection directions, and the choice of logistics channels. Especially cross-border sellers relying on small commodities, the increase in costs will directly squeeze profits.
Zhonjin Logistics suggests that all sellers immediately review their existing logistics plans to avoid unexpected losses.
03 Positive Signals: New Ways to Optimize the Supply Chain
Recently, Zhonjin Los Angeles No. 5 Overseas Warehouse was officially put into operation, and a new GOFO express channel was added, providing sellers with more logistics options.
By using Zhonjin Overseas Warehouse, sellers can reserve their goods in a place closer to consumers, which not only shortens the delivery time, improves the customer experience, but also can avoid additional costs caused by some logistics changes to a certain extent.
When facing price adjustments by courier giants or fluctuations in sea freight costs, the flexible allocation function of overseas warehouses can help sellers better respond and reduce the uncertainty of logistics costs.
At the same time, the application for Amazon's autumn Prime Day has started, which is a key traffic testing window before Black Friday. Sellers need to keep an eye on the FBA warehouse entry deadline to ensure that products are put on the shelves on time, so as not to miss the exposure opportunity.
At this critical node, the efficiency of the supply chain is particularly important. Every link from stock preparation, transportation to warehousing needs to be seamlessly connected. It is advisable to take this opportunity to sort out inventory and promote new products, laying a solid foundation for the peak sales period.
The times are changing dramatically, and fluctuations in the logistics environment are inevitable challenges in the development of cross-border trade.
Only by adapting to changes can we accurately target the direction in changes and break through the predicament.
