Affected by inflation and the weakening of the global economy, the cross-border business of many giant companies such as Amazon and FedEx has been affected, and business growth has slowed down.
According to data from consulting firm MWPVL International, since 2022, Amazon has cancelled or closed as many as 66 warehouses, covering the entire U.S. region, including 25 million square feet of space in fulfillment centers and distribution stations in 28 U.S. states. . Meanwhile, Amazon has also canceled several European projects, mainly in Spain.
From the published map, we can see that the FBA warehouses to be closed are mainly concentrated on the east and west coasts, and the New York Port is the area with the most closed Amazon warehouses and the area with higher warehouse rents.
Separately, 27 of Amazon's planned new facilities, totaling nearly 38 million square feet, have also been announced on hold.
Consumer demand for online shopping has been on the rise since the global outbreak, with Amazon doubling the size of its logistics network in the two years since the outbreak began, far outpacing rivals and partners such as Walmart, UPS and FedEx. At the peak of its expansion, Amazon was opening a new warehouse somewhere in the U.S. roughly every 24 hours.
Today, Amazon's chief executive announced he would unwind as part of a pandemic-era expansion that has left Amazon struggling with excess warehouse space and too many employees.
In the first quarter of this year, Amazon posted a net loss of $3.844 billion. In the second quarter, although Amazon's total revenue reached 121.2 billion US dollars, a year-on-year increase of 7%, it was still in a state of loss, and the loss amount was still as high as 2.028 billion US dollars.
In order to reduce unnecessary labor costs and redundant warehouse costs, Amazon has been subletting some of its warehouses, terminating some leases and delaying the construction of other warehouses to solve the problem. From the first quarter of this year to the second quarter of this year, Amazon's direct employees decreased by 99,000, the decline hit a record high.
Amazon's plans to build a large fulfillment center in Niagara, New York, are moving forward despite delays and closures at Amazon's warehouse facilities. In addition, Amazon is currently building and developing dozens of fulfillment centers, sorting centers and delivery stations around the world. Especially in India, the development trend is still gratifying. This year, Amazon is vigorously supporting the Indian station, and has repeatedly implemented the policy of gifting sellers. The number of sellers has increased significantly compared with previous years, which shows the potential of India in the field of cross-border e-commerce.
The global economic downturn has not only affected Amazon, but also the express delivery business of FedEx in the United States. The economic slowdown will cause its revenue to fall below the target of 500 million yuan. Recently, FedEx also announced a major cost-cutting plan, including closing 90 shipping points , reducing flights, temporarily grounding flights, shortening employee working hours, and postponing some hiring plans.
Because FedEx's performance is closely linked to the vitality of the US real economy, the market often regards its earnings as a barometer of the vitality of the US economy. The anxiety caused by the economic downturn is rising, and the cross-border sellers in the downstream will naturally be deeply affected.
Although the cross-border circle is in the cold winter, no matter how the market changes, don’t be swayed by the market, restrain costs in the off-season, and don’t miss any opportunity in the peak season. The cross-border peak season at the end of the year will be the most important stage of the year for cross-border sellers. Looking in an optimistic direction, consumers who are inflationary and tighten their belts tend to spend more cautiously, and the peak season is the best time for them to stock up. Sellers should take advantage of the opportunity to make preparations for product selection and stocking in advance.