The Impact of China’s One Belt One Road on e-Commerce: A FBA Shipping & Routing Guide
Editor’s note: This is a guest post by Milan Borkovic, Head of E-commerce Operations at Shypple.
Considered as the most ambitious infrastructure project of all times, China’s Belt and Road initiative is stretching from the very edge of East Asia to East Africa and Central Europe. Through a continuous network of highways, railways, ocean routes and ports, the project will greatly increase cross border connectivity and encourage a further integration of international markets. By doing so, China aims to strengthen its influence on world economy and politics, whilst simultaneously increasing regional cooperation.
When we talk about the OBOR initiative, two major routes need to be distinguished: the Silk Road Economic Belt, which runs through Central Asia to Europe, and the 21st Century Maritime Silk Road, which runs through Southeast Asia, Africa, and Europe. However, an idea emerged of incorporating digital sectors like telecommunications, internet of things infrastructure and e-Commerce into One Belt, One Road. It is a third route – the “Digital new silk road” or the “Information silk road”.
Most of the funding for massive deep-water ports, lengthy railroads, and power plants will be coming from the Chinese enterprises. Some will be grants, but many are taking the form of loans. China proposed establishing financial institutions to provide financial support for the infrastructural development in countries involved in the project (I.E. China Exim Bank, the Asia Infrastructure Investment Bank or AIIB, the Financial Centre for South-South Cooperation, the China Development Bank and the Silk Road Fund or SRF).
Alright, what does the process of digitalization have to do with all of this?
Railways and ports are becoming the landmarks of the Belt and Road Initiative. However, the less-visible telecommunications infrastructure will form the backbone of regional economic integration. The project of a “digital silk road” involves investments from e-commerce to telecommunications, scientific cooperation and the smart economy.
State-owned enterprises including China Telecom, China Unicom, and China Mobile are building the infrastructure to underlie the digital new silk road. Among the ambitious programs is the construction of overland cable links between Asia and Europe, by China and Russia. Private companies like Huawei and ZTE have also bite in with projects including a fiber optic cable network in Afghanistan. In addition to cable networks, OBOR also offers the Chinese government a chance to encourage the adoption of its Beidou satellite network, a competitor to GPS.
Developments in connectivity also has influence over e-Commerce sector. Two Chinese e-Commerce giants (Alibaba and JD.com) have pledged massive investment in logistics to facilitate cross-border trade. JD.com’s plan for 2017 was to operate more than 20 self-run overseas warehouses and to cover more than 100 countries and regions. The same year, Alibaba signed partnerships with Pakistan and Malaysia with purpose to develop e-Commerce, improve regulatory processes and build services platforms and warehouses. This will help small and medium-sized businesses to access the Chinese market.
It’s not all sunshine and roses
A variety of hurdles pop out, from economic to political and even security related ones.
We have discussed financing models in the beginning. However, when countries default there can be consequences. In Pakistan, for example, a deep-water port in Gwadar is being funded by loans from Chinese banks to the tune of $16 billion. The interest rate is over 13% and if Pakistan defaults, China could end up taking all sorts of collateral as compensation – from coal mines to oil pipelines. Something similar has already happened in Sri Lanka as they were unable to pay its $8 billion loan for the Hambantota Port. In the middle of 2017, the country gave up the controlling interest in the port to a state-owned company in China in exchange for writing off the debt.
Satellite and mobile networks, as well as the fiber-optic projects, could benefit developing economies by improving their connectivity. However, concerns are present that Beijing could use these networks for electronic surveillance purposes.
While most economies in Asia are willing to accept some level of risk to be part of OBOR, there is one country that is simply not a fan of the megaproject. That country is India and there are several reasons for it. The China-Pakistan Economic Corridor (CPEC), to begin with, goes right through Kashmir (a disputed territory). Secondly, Chinese investments in maritime trade routes through the Indian Ocean could displace India’s traditional regional dominance.
Amazon FBA Shipping & Routing Guide
We can testify for all the movements described in previous paragraphs, especially when it comes to e-Commerce side of the story. In the past year, we have experienced an ever-increasing demand from European based Amazon buyers and sellers to have more visibility, insight and control over their shipments. Shypple has helped a wide variety of businesses with the shipment process from purchase, collection and labeling of goods up to warehousing or delivery. We offer importing and exporting enterprises a central and digital web-app that acts as a supply chain dashboard for all in transit, planned and delivered shipments. The web-app helps importers and exporters as it foresees in a variety of booking, planning, delivery and communication possibilities.
When it comes to sending goods to Amazon warehouses, one of the most important requirements are those related to shipping & routing. We bring you insight into all the tiny details that are important for a flawless process.
Shipping & Routing
There are standard requirements that apply to all boxes shipped to Amazon fulfillment centers whether by small parcel delivery, less than truckload (LTL), or full truckload (FTL). These requirements are related to box content information, box dimension (“Boxes containing multiple standard-size items must not exceed 63 cm on any side”), box weight (“Boxes must not exceed the standard weight limit of 30 kg, boxes weighing between 15 kg and 30 kg must be marked “Heavy Package”), approved containers and even approved forms of dunnage! For more detailed information on these matters, please visit Amazon’s guidelines.
There are additional requirements, based on some of the shipping methods used:
- Small Parcel Delivery
- Arranging for Less than Truckload (LTL) or Full Truckload Deliveries to Amazon
We’ve already shared some brief guidelines for small parcel delivery requirements in the initial paragraph. As for LTL or Full Truckload shipments, including wrapped pallets, these require additional preparations. Seller and chosen carrier are responsible for meeting these when sending large-volume shipments to Amazon. Some of these requirements are:
- Using acceptable pallets (in all EU countries – 800×1200 mm Euro/CHEP certified DIN 15146)
- Building pallet shipments (pallets can be built up to a maximum of 1.8 meters high, including the pallet. Double stacked pallets: 2.7 meters for DE /CEE and 3.0 meters for UK, FR, IT and ES)
- Adhering to pallet label requirements (I.E. All pallets must be stretch-wrapped in clear plastic with a ‘do not break stretch-wrap’ or ‘do not break down’ notification to the carrier. Pallets wrapped in black/opaque stretch-wrap may be rejected)
- Providing the bill of lading (BOL)
- Regardless of pallet option, pallets must not exceed 500 kg in gross weight including the weight of the pallet
There are even carrier related requirements. So, what carrier needs to do?
- Has Amazon Reference ID’s, Shipment ID’s, and tracking (PRO) numbers
- Schedules advanced delivery appointments
- Adheres to the vehicle condition requirements
For more detailed information on all of these matters, please visit Amazon’s guide or contact our operations team.
Milan Borkovic is a customs inspector for the matters of customs regulations, international trade, import – export procedures and customs law. He is controlling documentation (customs entry forms, invoices & packing lists, transport documentation, preferential origin documents) filed by customs brokers on behalf of their clients, traditional importers and exporters. He holds a University degree in economics with a proven record of Customs Administration engagement. In addition, he is the Head of E-commerce Operations at Shypple, and has extensive experience in e-commerce specifically in inventory management, logistics and shipping for Amazon US & EU stores.