Consultant Insight: As cross-border e-commerce grows, FedEx leads on Chinese customs requirements

[caption id="attachment_69752" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] Due to the significant increase in China’s cross-border e-commerce traffic, the General Administration of Customs published a policy supporting cross-border export sales using e-commerce platforms on June 12; this policy took effect on July 1. China’s cross-border e-commerce retail imports and exports from January to May 2020 totaled 71.73 billion RMB, with a year-over-year increase of 22.4%, of which imports increased by 23% year-on-year, exports increased by 21.6% year-on-year, according to China’s Ministry of Commerce. According to this new policy, export sales can either be conducted via a direct B2B model or via a foreign warehouse delivery model. All transaction-related data will be shared with Chinese Customs in real time, so that tax, quarantine, inspection and customs clearance matters can be handled while the online transactions are being conducted. Currently, the policy only applies in a few pilot cities: Beijing, Tianjin, Nanjing, Hangzhou, Ningbo, Xiamen, Zhengzhou, Guangzhou, Shenzhen, and Huangpu. FedEx became the first international express enterprise to apply this policy on July 1 from the Xiamen Customs district, when it assisted two Fujian customers, including Xiamen Worthfind E-commerce, to successfully export the first batch of cross-border e-commerce B2B goods. The service is available at FedEx’s Guangzhou and Xiamen gateways and is the result of upgrades that FedEx has made to these two hubs. The quick adoption of the new policy by FedEx fits with the company’s strategy in China, where FedEx has worked to build up its e-commerce services for some time. In April 2019, FedEx launched the “Cross-border E-Commerce Export Solution” for B2C in South China, providing customs clearance services for cross-border e-commerce enterprises’ B2C goods through the Consolidated Clearance Declaration method and in June of this year, FedEx launched the “Online Declaration Tool” for exports, which facilitates customers’ submission of export trade data electronically. However, FedEx faces stiff competition from not only UPS, DHL and other express providers, but also from e-commerce providers eager to capitalize on China’s rapid demand growth. To further support growing cross-border e-commerce, Alibaba's Cainiao Network has introduced a direct Singapore-China airfreight route that will operate four weekly chartered flights between Singapore (SIN) and Hangzhou (HGH). According to Cainiao, the route will allow it to eventually develop more value-added services, including delivery time slot options, goods assembly and returns, and delivery of specialized goods such as medical supplies. Earlier in August, Cainiao added another new route between HGH and Liege (LGG) with freighter partner Air Cargo China. This route will include three weekly flights with final destination in Madrid (MAD). Cainiao’s recent announcements are part of a larger strategy, according to our sister publication , Cargo Facts , in which Cainiao plans to quadruple international charter flight bookings to an estimated 1,260 flights over the next nine months to shorten average delivery times for expedited cross-border orders from the current seven to ten days down to three to five days. Despite competitive threats, FedEx is actively pursuing opportunities to increase both market share and revenue quality for international priority freight and international economy freight services. It has added extra capacity in the short-term to support demand and to help its customers as they restart their business activities. FedEx is also working to expand its e-commerce capabilities in Europe .

Consultant Insight: As cross-border e-commerce grows, FedEx leads on Chinese customs requirements

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