Key Points: When “fast shipping” is no longer fast and “direct delivery” is no longer reliable, the traditional “direct shipment from China” model has become vulnerable to port congestion. The key to solving this problem lies in shifting the supply chain’s “end point” forward, from “waiting in China” to “standing by in Europe and the United States.”
I. Why is “overseas warehouses + local express delivery” the solution?
- Pain Points of the Traditional Model:
High Shipment Uncertainty: Port congestion leads to commonplace delays and port skipping, making it impossible to provide customers with reliable delivery times.
Uncontrollable Last-Mile Delivery Costs: Picking up goods from congested ports incurs high container and port demurrage fees, and the last-mile local express delivery costs are expensive.
Low Risk Resilience: A disruption in any link in the supply chain (such as a port strike or epidemic lockdown) can bring the entire order delivery process to a standstill.
- Advantages of “Overseas Warehouse + Local Express Delivery”:
Turning “variables” into “constants”: Separating the lengthy, uncontrollable journey of international trunk shipping from the short, controllable journey of local express delivery. You only bear the one-time risk of ocean/air freight. Once the goods are in the warehouse, subsequent order fulfillment times are stabilized at 2-3 days.
Significantly Reduced Final-Mileage Costs: By partnering with an overseas warehouse, you can enjoy discounted rates negotiated with local express delivery companies (such as USPS, UPS Ground, and FedEx Home Delivery), resulting in costs significantly lower than shipping directly from China.
Creating an Ultimate Customer Experience: Providing logistics speeds comparable to Amazon significantly improves customer satisfaction and repeat purchase rates.
Activating Sales Potential: Supporting drop shipping is the foundation for cross-border e-commerce and establishing a presence on European and American e-commerce platforms (such as eBay and Amazon Auto Parts).
II. How to Build a Resilient Supply Chain in Four Steps The following flowchart clearly illustrates the new supply chain model, from stocking in China to overseas end customers:
Step 1: Strategic Product Selection and Stocking—Solving the “What” and “How Much” Questions
Product Selection Principles: Not all parts are suitable for overseas warehouses. Prioritize:
Best-Sellers: “Hot-selling” items with stable sales and accurate demand forecasts, such as oil filters, brake pads, and spark plugs.
Standard Parts: Highly versatile and compatible with a wide range of vehicle models.
Heavy/Large Items: Products where unit costs can be significantly diluted through ocean shipping and where local express delivery offers significant advantages.
Stocking Strategy:
Data-Driven: Calculate safety stock levels based on historical sales data, seasonal fluctuations, and marketing plans.
Small Batch, Multiple Batches: Avoid stocking too much goods at once, which can tie up significant capital and increase the risk of unsold goods. Adopt a “small inventory, fast replenishment” strategy.
Step 2: Choose a reliable overseas warehouse partner – solving the problems of “where to store” and “who to manage”
There are three main overseas warehouse models, and you can choose one based on your specific situation:
Model Suitable for Sellers Advantages Challenges
Platform warehouses (such as Amazon FBA) For sellers who primarily sell on that platform. High traffic volume and delivery efficiency. Many restrictions, complex costs, and limited inventory flexibility.
Third-party overseas warehouses The preferred choice for most sellers, especially suitable for multi-platform operations. High flexibility, diverse services (relabeling, repackaging, return processing), and cost-effectiveness. It’s important to screen the service provider’s qualifications.
Self-built warehouses For large brands with deep pockets and extensive management experience. Strong control and complete data confidentiality. Significant investment, complex management, and high risk.
Factors to consider when choosing a third-party overseas warehouse:
Geographic location: Is the warehouse near major ports or consumer markets to reduce inland transportation time and costs?
System integration: Can the warehouse management system (WMS) seamlessly integrate with your e-commerce platform/ERP system for real-time inventory synchronization?
Service capabilities: Whether the warehouse provides the additional services you need (such as labeling, testing, and simple processing).
Fee Transparency: Clearly understand all details, including storage fees, handling fees, and consumables.
Step 3: Optimize First-Leg Transportation and Warehousing—Solve the “How to Ship” and “How to Get in” Problems
First-Leg Transportation: Despite port congestion, ocean freight remains the preferred method for large-volume shipments to reduce costs. Communicate closely with freight forwarders to select highly reliable shipping companies and allow for buffer time for potential delays.
Forecasting and Labeling: Before shipment, strictly follow the overseas warehouse’s requirements to prepare a shipping manifest, apply box marks, and label products. Accurate labeling is crucial for efficient warehousing.
Step 4: Efficient Operations and Inventory Management—Solve the “How to Sell” and “How to Replenish” Problems
Inventory Monitoring and Dashboarding: Establish a real-time inventory monitoring dashboard and set inventory warning levels (e.g., 30-day sales volume).
Automated Order Processing: Once an order is placed on the e-commerce platform, the system automatically captures and transmits it to the overseas warehouse system, enabling shipment within 24 hours.
Develop a scientific replenishment plan: Comprehensively consider first-leg shipping time, sales velocity, and procurement cycle to calculate the replenishment point and replenishment quantity. Formula: Replenishment point = Sales within the procurement cycle + Sales during transportation + Safety stock.
III. Risk Control and Cost-Benefit Analysis
Risks:
Risk of unsold goods: Inaccurate stocking leads to inventory backlogs and high storage fees.
Fund Pressure: Pre-stocked inventory consumes more cash flow.
Strategies:
Negotiate with overseas warehouses to offer discounted clearance or return options for unsold inventory.
Refine operations to improve inventory turnover.
Cost-Benefits:
Increased costs: First-leg ocean freight, overseas warehouse storage fees, and handling costs.
Saved costs: Significantly reduced final-leg express delivery costs and avoided port demurrage.
Hidden Benefits: Increased sales, customer satisfaction, and brand reputation.