General

The "14th Five-Year" e-commerce development plan has been released, expressing support for the high-level development of cross-border e-commerce, and support for cross-border e-commerce to use RMB settlement, both independent stations and overseas warehouses have mentioned.

The cross-border e-commerce transaction volume in 2020 is 1.69 trillion yuan, and the expected target for 2025 is 2.5 trillion yuan. After opening 24/7 operations, the congestion in US ports has not improved. The Biden government has taken another ruthless move and will charge shipping companies a new surcharge for imported containers stranded at the terminal.

The "Plan" is released to support cross-border e-commerce RMB settlement

Yesterday, the Ministry of Commerce, the Central Cyberspace Administration of China, and the National Development and Reform Commission issued (hereinafter referred to as the "Plan"), clarifying the direction and tasks of China's e-commerce development during the "14th Five-Year Plan" period. According to the data in the "Plan", cross-border e-commerce will flourish in 2020, with a total import and export value of 1.69 trillion yuan. In terms of specific quantitative indicators, the "Plan" sets an expected target of 2.5 trillion yuan for the transaction volume of cross-border e-commerce in 2025.

Only by judging the time and evaluating the situation can you not be surprised at all. For cross-border sellers, understanding national policies and the general direction of industry development is also very important for store operations. There are a lot of cross-border e-commerce industry-related content in the "Plan". The following are some refinements and analyses made by the editor based on the content of the "Rules":

01. Encourage the global operation of e-commerce platforms, and e-commerce companies "go global." Support e-commerce companies to register trademarks, apply for patents, establish their own brands overseas, and enhance their international influence and competitiveness. Support the global deployment of e-commerce cross-border transaction service platform enterprises, cultivate a number of independent cross-border e-commerce stations, and form a highly internationalized international e-commerce service industry.

When it comes to cross-border e-commerce operations, the state has repeatedly mentioned the need for innovation. Innovation is the first driving force to lead development. With the influx of many sellers and the fading of industry dividends, innovation and brand building are another way to succeed in competition in addition to the spiral low price strategy. Although more difficult, the results are also more solid. The "Plan" also stated that it is necessary to consolidate and expand a number of internationally competitive cross-border e-commerce leading enterprises and industrial clusters.

02. Improve infrastructure and support the use of RMB for settlement in new trade formats such as cross-border e-commerce.

It is mentioned in the "Plan" to improve the layout of global e-commerce infrastructure such as warehousing, logistics, payment, and data. It is not only to improve the industrial chain, but also to solve the worries of the sellers. Especially in terms of payment, it mentioned supporting the use of RMB for settlement in new trade formats such as cross-border e-commerce. The recent fluctuations in the US dollar exchange rate have severely affected many sellers. If the renminbi settlement method is further promoted, it will be able to reduce the seller's exchange cost.

03. Cultivate cross-border e-commerce supporting service companies, and promote the construction of cross-border e-commerce comprehensive pilot areas.

In 2020, there will be 105 comprehensive cross-border e-commerce pilot areas, and the cross-border e-commerce retail import pilot will be expanded to 86 cities and the entire island of Hainan. The state hopes to further improve the policy system and optimize the industry development environment through the construction of the comprehensive test zone. The number of comprehensive test areas continues to increase, and the top-level system design of the cross-border e-commerce industry will also be improved day by day.

04. Accelerate the deployment of overseas warehouses in key markets and improve the global service network. Make up for shortcomings in cross-border logistics such as cargo and aviation, and strengthen rapid response and emergency support capabilities.

This is guidance for logistics and warehouses. Overseas warehouses have always been the focus of national attention. At the Canton Fair not long ago, the Prime Minister expressed his affirmation of the role of overseas warehouses, and overseas warehouses that have received much attention may usher in a new wave of good news. In addition, if cargo aviation is reinforced, it will also be able to alleviate maritime congestion.

05. Strengthen the organization of cross-border e-commerce industry, improve relevant standards, strengthen the ability to deal with trade frictions, and provide protection and support measures for Chinese e-commerce companies to go overseas.

The bad news that sellers encountered this year can be said to be one after another. In front of the big platforms, the seller's voice is very small. With the guarantee and support of relevant organizations, sellers can also carry out cross-border business with greater confidence.

In the "Plan" released this time, it is clearly stated that "support for the high-level development of cross-border e-commerce" is also mentioned in recent popular independent stations and overseas warehouses. From the "Planning" point of view, the country is still optimistic about the prospects of cross-border e-commerce, and will surely further support the development of the industry.

After reading the general direction, let's take a look at the problem at hand. Shipping congestion and high freight rates have become a pain in the hearts of many cross-border sellers in recent months. For sellers, the year-end shopping season including Black Friday and Christmas has entered a countdown. If the cargo is blocked at sea or in the port, it will be really miserable. Also anxious is the US government, which is worried about the shortage of goods. In order to solve the supply chain problem, the White House resorted to a vicious move.

The port charges a new surcharge, will the ocean freight increase?

At the beginning of this month, Biden government officials announced that the Port of Los Angeles and the Port of Long Beach will open 24/7 operations, aiming to solve the problem of port congestion. However, the facts later showed that this program did not produce any effect. Last weekend, 110 ships waited to drop anchor outside the Port of Los Angeles and Long Beach, setting a new record once again.

After the failure of the 007 policy, officials in Long Beach, California adopted an unusual strategy-allowing companies to temporarily increase the stacking height of shipping containers at their berths from two to five floors. However, this is obviously not a good way to solve the problem. The high stacking does save space and allows the port to put more containers. However, the throughput efficiency of the containers cannot be improved, and blockage will happen sooner or later.

In order to ensure that there will be no shortage of goods during the shopping season, the Biden government chose to put pressure on shipping companies in a punitive manner to allow them to ship the containers away as soon as possible.

According to a report by the Associated Press, the ports of Los Angeles and Long Beach said they will begin fines for shipping companies whose containers stay at the shipping terminal for too long. Starting from November 1, the Port of Los Angeles and the Port of Long Beach will charge shipping companies a surcharge of US$100/container for trucks and rail transport overdue containers, and an increase of US$100/container per day. The port stated that if it is transported by rail, the shipping company has 3 days to transport the container; if it is transported by truck, the shipping company has 9 days to transport the container. If the container stays at the port, the fine will be accumulated every day until the container is taken away.

Compared with the previous policy, the establishment of this policy appears to be much stricter. A container of 100 US dollars a day doesn't sound like a lot, but if you add up the time and quantity, it will be a lot of money when added together.

Hearing this news, the first reaction of many sellers who have suffered from high freight rates is whether this will add fuel to the fire. If the shipping company chooses to pass on the cost, will the shipping price increase again?

Whether sea freight will rise depends on how the shipping company chooses to deal with it. Due to the low throughput efficiency of the port and the longer staying time at the terminal, many shipping companies usually choose to return directly before unloading the container and leave the empty container in the port in order to save costs. This is also a major cause of port blockage. The US government hopes to speed up the return of empty containers through this policy.

If the shipping company chooses to wait for unloading to bring back empty containers, the extra space can make room for containers on other ships, which can solve the congestion problem to a certain extent. Empty containers are no longer piled up in ports, but more are brought back, and the seller’s “hard to find” situation will also improve. However, this will also increase the waiting time of ships at the port and reduce shipping efficiency. The impact on freight rates depends on the specific circumstances of the shipping schedule. However, if the shipping company chooses not to change its previous practice after measurement, it will inevitably pass on the extra cost, and ocean freight will also rise.

The supply chain is intertwined, and changes in port policies are difficult to solve the problem of supply chain disruption. From the current situation, due to the shortage of human resources, it is difficult to solve the supply chain problems in the United States in the short term. Large or small congestion is expected to last at least until the middle of next year. Sellers need to prepare in advance.