A large number of accounts have been closed and some people have been arrested! There are multiple pending cross-border explosions

Accounts closed, arrests made, pending cross-border explosions

Many cross-border sellers are facing difficulties in 2023, not only on the sales side but also on the service side. The worse the overall economic environment, the more likely it is for incidents of fraud to occur, or in other words, some of the “dirty tricks” that already exist in the industry are being copied by more people.

The recent “water-running account” incident that shook the cross-border e-commerce community is still causing aftershocks. With continued strict enforcement by UPS and others, many water-running accounts have been closed and more sellers have been affected.

As one wave subsides, another is about to rise! Industry insiders predict that there will be more incidents of fraud and scams in the logistics chain…

Water-running account update: About 50% of the transit goods are affected, and a Chinese woman was arrested on suspicion of making fake postal labels

Recently, UPS has begun cracking down hard on water-running accounts, and the United States Postal Service has followed suit, carrying out a series of strict actions such as “inspecting goods during visits to postal docks and warehouses”, “shutting down e-commerce accounts that sell fake labels”, and “confiscating and dealing with packages with fake labels”.

The latest news shows that a 50-year-old Chinese woman named Chen was arrested on May 23 on suspicion of making fake postal labels. It is understood that Chen and her employees sent more than 9 million packages with fake postage labels in six months, resulting in a loss of $60 million to the United States Postal Service.

In response to the series of policies issued by courier companies to crack down on water-running accounts, DHL ink recently stated that through the DHLink online shipping channel for the US line, logistics providers must upload the actual USPS tracking number within three days after the goods are shipped, and the recipient’s address must match the original tracking number. For all goods shipped after May 1, 2023 (inclusive), USPS website tracking will be the only identification basis. If there is no tracking record on the USPS website, it will be considered a fake label.

A large number of overseas warehouse companies have experienced this wave of iron-fist rectification. According to insiders, UPS has been strictly inspecting all overseas warehouses in the US recently, and almost every batch of goods sent out from overseas warehouses needs to be inspected.

Usually, a UPS account is bound to one or several overseas warehouses. According to the agreement, the staff usually only go to these designated warehouses to pick up goods. Accounts that are suddenly bound to dozens of warehouses are likely to have problems and are the key inspection targets. If UPS finds that an account does not match the warehouse during the pick-up process, the overseas warehouse will be blacklisted and classified into the non-credit system by the UPS system. The warehouses that have been closed will no longer be arranged for pick-up by UPS.

If the goods are already in the UPS warehouse, if you want to retrieve the goods, you have to pay a fine, otherwise the goods will be confiscated. At present, the possibility of these bad freight forwarders paying the fine is very small. Therefore, the seller may face the situation of losing both money and goods. Some sellers may only spend money to learn a lesson, while others may be seriously affected.

In the industry’s view, more than 50% of US overseas warehouse companies are involved in the practice of running off accounts, and those who transfer Amazon goods can be said to be the hardest hit area. This number is not small, and it also indirectly indicates that a large number of sellers’ goods are facing a crisis.

There are still many logistics tricks that will be “settled” after the running-off incident. “Dangerous goods becoming ordinary goods” are also likely to be regulated. Many pure electric products belong to the category of dangerous goods, but some logistics companies treat them as ordinary goods in order to save dangerous goods surcharges.

Insiders revealed that “For example, FedEx and UPS charge around $46 for the dangerous goods surcharge per package. Some peers can save a lot of money by concealing this abnormal means of competition. Even if they charge lower fees for the seller’s goods, they can still obtain higher profits. UPS and other express delivery companies should have noticed this phenomenon. After sufficient evidence is available, there will definitely be a wave of overseas warehouse companies cleared out.”

Full container direct delivery business also has hidden risks. Amazon recently updated multiple contents such as “Each FBA number/PO number in each cabinet can only be used once, otherwise the FBA number/PO number will be invalidated and unable to be reserved”. After Amazon’s delivery rules came out, card delivery businesses’ money-making route through reducing costs with full container direct delivery was also blocked. However, a large number of freight forwarders are still accepting low-priced full container direct delivery goods. When they arrive in the United States, there will definitely be additional fees such as dismantling and cabinet rental, which cannot be covered. The subsequent trend is obvious, and freight forwarders will raise prices or sell part of the seller’s goods to make money.

“Overseas warehouse freight forwarders stealing seller’s goods” is also a logistics scandal this year, but this phenomenon has not disappeared due to exposure, but is still rampant, and there will only be more subsequent scandals related to it.

According to a major cargo theft case recently published by the California Highway Patrol (CHP), dozens of people were arrested and the stolen goods were worth millions of dollars. Even some unscrupulous overseas warehouses have started to take advantage of the situation, falsely claiming that the goods have been detained by UPS, and actually wanting to steal and sell the seller’s goods under the guise of running water accounts.

A data shows that there were over 900 cases of goods theft and fraud crimes happening in the first four months before 2023, soaring compared to the previous year, of which Amazon packages accounted for as high as 62%.

“There are still many similar news that have not been exposed, and many non-compliant operations have not been rectified. The water of cross-border logistics is too deep.”

One of Amazon’s daily work tasks: scolding freight forwarders

A widely circulated picture recently showed that one of Amazon’s daily work tasks is to scold developers (for poor product selection), scold suppliers (for slow supply), scold platforms (for high advertising fees), scold competitors (for being philanthropists), scold freight forwarders (for being unprofessional), scold warehouses (for mislabeling)…

It can be seen that freight forwarders are prominently listed. Freight forwarders originally bear the responsibility of sharing sellers’ worries and solving difficulties, and all of this is based on the premise of excellent freight forwarding services. When encountering an unreliable freight forwarder, the seller’s heart must be in turmoil, and they have to fight with them almost every day.

However, sellers cannot cut ties with freight forwarders. Taking overseas warehouse services as an example, those popular, bulky products or products that have already formed a certain sales scale are suitable for placing in overseas warehouses. The overseas warehouse companies on the market are of mixed quality, so how can sellers choose reliable overseas warehouses?

SLM-Warehousing (hereinafter referred to as SLMW) is the overseas warehousing business under SLM company, focusing on big one-piece delivery for more than 7 years. The company has comprehensive indicators that meet the assessment of listed companies. Currently, the cooperating clients include the top sellers of furniture category in East China, the listed companies’ top sellers in South China and Central China, with years of overseas warehouse experience and a good reputation.

Regarding cooperation with logistics providers, SLMW has directly signed contracts with FedEx and UPS, using both their own registered accounts and their clients’ accounts. Sellers do not have to worry about the risk of seized goods due to account issues.

During the current downturn in the US overseas warehouse market, many warehouses are busy with subletting and transfers, but SLMW’s overseas warehouse business is still in a high-growth phase. Currently, a new 100,000 square foot warehouse has been put into use in Los Angeles, and SLMW now has a total of 250,000 square feet of warehouse space in Los Angeles.

Overall, SLMW has established over 1,000,000 square feet of warehouse space in five US cities, focusing on setting up storage and distribution centers in multiple cities to implement the principle of nearby delivery and ensure that end consumers receive packages as soon as possible, thereby improving customer satisfaction.

To ensure accurate and error-free handling of goods, SLMW also uses a comprehensive warehouse management system (WMS), standardized operating procedures, and multi-post self-inspection mechanisms to reduce error rates. Currently, the contract error rate is 0.1%, and the warehouse error rate is 0.05%, both lower than the market error rate, and the daily fulfillment rate and SFP execution rate are both 100%.

From the perspective of experience, reputation, cooperation with logistics providers, warehouse scale, and warehouse management system, among other factors, SLMW is definitely a top choice for sellers selecting overseas warehouses.

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