Geopolitical Conflicts Drive Up Freight Costs, Slowing China’s Cross-Border E-Commerce Export Growth
China’s cross-border e-commerce export growth has stalled as geopolitical conflicts drive up freight costs and inflation weakens consumer demand in Europe and the United States. The EU’s upcoming fee on low-value parcels will further increase operating costs and compliance pressure for cross-border sellers.
What are the key facts?
- 1Impact factor: The Iran conflict has increased air freight costs
- 2Market conditions: Weak consumer demand in Europe and the United States
- 3Policy update: The EU will impose a €3 fee on low-value parcels starting July 1
What happened?
Reuters reported that air freight costs have remained elevated amid the conflict involving Iran, while inflation has weakened consumer demand in European and U.S. markets, bringing growth in China’s cross-border e-commerce exports to a plateau. The European Union also plans to impose a €3 fee on low-value e-commerce parcels starting July 1, further squeezing sellers’ margins.
What does this mean for cross-border sellers?
Cross-border sellers should reassess their logistics cost structure and monitor the impact of the EU’s new rules on low-average-order-value products.