Overseas warehouses bolster Chinese foreign trade enterprises in global markets

At 8:30 a.m., local time, container trucks were lining up in front of a Chinese overseas warehouse in Dusseldorf, Germany, waiting to be unloaded.

About an hour later, the first truck was ready to depart. "The goods on this truck will be sent to different parts of Germany and its neighboring countries through transfer centers," said Shi Lei, manager of the warehouse. Overseas warehouses are important logistics nodes connecting the Chinese and international supply chains, he noted.

Photo shows an overseas warehouse in Lichfield, the United Kingdom. [Photo provided by the interviewed enterprise]

With the booming development of cross-border e-commerce, consumers are demanding faster and more reliable shipping services. Setting up warehouses close to end markets allows for pre-stocking, which facilitates the distribution and turnover of Chinese goods in overseas markets and enhances the efficiency of last-mile deliveries in cross-border e-commerce.

According to statistics, China has established over 2,500 overseas warehouses so far, covering a total area of over 30 million square meters.

Overseas warehouses can greatly reduce the shipping time. For instance, businesses used to stock up in China before shipping them to German customers once orders were placed. Even with air freight, it would take 5 to 10 days for the goods to reach Germany. Now, by pre-stocking items at overseas warehouses, packages can reach Berlin within one day or two, similar to the efficiency of Chinese domestic logistics.

Besides, overseas warehouses can lead to a significant drop in overall logistics costs. "Cross-border logistics for overseas warehouses typically involves three stages: shipping between ports, storing goods abroad, and delivering them to customers overseas," said Shi.

According to him, the first stage is usually covered by container sea freight, known for its high capacity that lowers the cost per unit of transportation. For the second stage, overseas warehouses can cut costs by enhancing operational efficiency and inventory turnover with refined operations and customized and professional services.

Photo shows employees of an overseas warehouse in the Middle East owned by an e-commerce company in Hangzhou, capital of east China's Zhejiang province. [Photo provided by the interviewed enterprise]

When it comes to the third stage, with products located closer to consumers, distribution costs are lower, especially when using combined shipping from multiple warehouses. Moreover, large overseas warehouses have stronger negotiating capabilities with local last-mile delivery service providers, which also helps reduce overall operational costs.

More importantly, the service chain of overseas warehouses is becoming more complete. Handling returns has been a major challenge for foreign trade companies, but this obstacle has been effectively addressed by overseas warehouses. Consider the case of clothing exports, which often involve a high number of returns and exchanges. Without overseas warehouses, returns would be complex and time-consuming due to the need for cross-border shipping; but now, products can be returned to overseas warehouses and redistributed as needed.

In recent years, as overseas warehouse companies continuously make innovations and improve their services, overseas warehouses have evolved from basic storage locations to multi-functional foreign trade service facilities, playing a crucial role in the foreign trade supply chain. Some overseas warehouses can even provide multiple services such as exhibitions, after-sales support, and maintenance for companies venturing into global markets.

For example, the Yiwu-based Zhejiang China Commodities City Group Co., Ltd. has established overseas warehouses in Dubai, Mexico, and other locations around the world, which serve as both exhibition halls and warehouses. Besides, some Chinese overseas warehouse companies have expanded their services to include first-mile logistics services from Chinese domestic origins, creating a complete service cycle for exporters and importers.

Photo shows the interior of an overseas warehouse in the United States owned by a logistics company in Ningbo, east China's Zhejiang province. [Photo provided by the interviewed enterprise]

Nowadays, Chinese overseas warehouses have formed a network around the world, opening up new routes for exports. According to the latest data released by China's General Administration of Customs, the trade volume of China's cross-border e-commerce reached 1.22 trillion yuan ($170.22 billion) in the first half of 2024, up 10.5 percent year on year, 4.4 percentage points higher than the overall growth of China's foreign trade during the same period. The trade volume of China's cross-border e-commerce has grown by 1.2 times over the past five years, from 1.06 trillion yuan in 2018 to 2.38 trillion yuan in 2023.

To improve logistics efficiency, many Chinese overseas warehouse companies are speeding up their shift toward digitalization and automation.

The movement of goods into storage and out for shipping involves a significant amount of information entry and product handling. Some warehouses handle tens of thousands of outbound orders each day, making it challenging to manage order allocation effectively.

With information-based intelligent platforms, product information can be collected, transmitted and processed in real time. Combined with big data analysis, the platform can predict sales trends and inventory demands, enabling proactive inventory allocation and replenishment.

Such efforts can help ensure timely delivery of goods and prevent issues like inventory backlog and poor sales. During the sorting and distribution process, robots and automated sorting equipment can efficiently handle a large volume of orders with stability and precision.