Overseas warehouses, navigating through market cycles

Overseas warehouses are more than just "warehouses."

Text by Wang Yu

Edited by He Yang

San Bernardino County, 60 miles east of the Port of Los Angeles, is an emerging warehousing hub known as the "Inland Empire." Since 2020, nearly 40% of consumer goods in the US market have been shipped daily from more than 4,000 warehouses scattered across the area.

Right now, inside a stack-style three-dimensional warehouse spanning tens of thousands of square meters here, more than a hundred AGV robots are shuttling through a forest of 20-meter-high shelves. They precisely pick up products such as smart speakers from Shenzhen, Christmas light strings from Yiwu, and luggage and handbags from Baigou, and transfer them to the conveyor line. Subsequently, automated equipment operates, and the processes of sorting, labeling, packing, and outbound delivery are as precisely coordinated as the gears of a machine, all done in one go.

After 24 - 72 hours, these "Made in China" products that have traveled across the ocean will appear at the front desks of New York apartments, in the self-pickup lockers of Chicago supermarkets, or at the doorsteps of single-family homes in the suburbs of Houston.

This scene is not only a daily snapshot of global overseas warehouses at present but also a vivid portrayal of the continuous evolution of China's cross-border e-commerce logistics and its continuous climb to the high point of the value chain.

In fact, looking back on the past year, despite the turbulent and still - frequent aftershocks in the world trade pattern, the overseas warehouse industry has still forged ahead under the interweaving of multiple variables, showing strong business resilience:

From the capricious trade policies during the tariff war and the drastic fluctuations in the capacity resources of airlines and ships, to the market restructuring through mergers and eliminations during the period of excess warehouse capacity, and then to the reconstruction of the value chain after the emergence of new technologies and new demands, overseas warehouses - as the key infrastructure for Chinese enterprises to go global - are not only the "front - line positions" to resolve various impacts but also the "strategic fortresses" to ensure the extension and penetration of China's supply chain into the global market.

In the face of changes and looking to the future, the meaning of "overseas warehouses" is going beyond their physical attribute as "storage space" and transforming into a core fulcrum to empower global enterprises to deeply penetrate the local market and respond agilely. It has become an "accelerator" for them to link resources, reach the market, and activate demand.

On July 1, 2025, EBrun officially released the Analysis and Outlook of the Third - Party Overseas Warehouse Industry from 2024 - 2025 special report (click [Read the Original] at the end of the article to download the full report). Based on the critical node of the rebound of the overseas warehouse industry from 2024 - 2025, it looks forward to the market outlook. Through in - depth research on cross - border sellers and a panoramic scan of multiple service providers, it reveals the development context of the overseas warehouse industry.

01 From "Prosperity during the Pandemic" to "Industry Shuffle": The Overseas Warehouse Track Crosses Cycles Amidst Ups and Downs

There was a time when the three words "overseas warehouse" became a synonym for "sudden wealth" in the cross - border industry, and it was the silent money - maker behind the explosive growth of cross - border e - commerce.

During the COVID - 19 pandemic, it was common to see warehouses with shelves full and almost no space in the aisles. Hot money then flocked in: the main players were not only logistics bosses in the "industry" but also "outsider" speculators "bringing capital into the game." Driven by the fanatical sentiment, various players competed to acquire land and massively expand their warehouse networks, as if just by贴上 the label of "overseas warehouse," they could turn stones into gold and continuously swallow the market flood.

Since 2020, along with the outbreak, fluctuation, and end of the pandemic, the overseas warehouse industry has also experienced an unprecedented surge and shock, forming a "three - stage" process from a "seller's market" to a "buyer's market" and then gradually returning to a balance between supply and demand.

The irrational expansion driven by short - term暴利 soon reached a turning point.

In 2022, the shipping capacity gradually recovered, causing a reversal in the supply and demand of overseas warehouses. The utilization rate of overseas warehouse capacity dropped rapidly; coupled with inflation in Europe and the United States, cost - related expenditures such as labor costs and commercial real estate rents affected the cash - flow health of service providers. Small and medium - sized overseas warehouses with single business types and weak anti - cycle capabilities eventually fell into homogeneous competition and launched a fierce price war to compete for customers. A large number of industry participants faced elimination and shuffling in the vicious competition. The "quick entry and quick exit, rapid rise and rapid fall" resulted in a large amount of redundant warehouse capacity, further exacerbating the contradiction of oversupply.

The "prosperity during the pandemic" suddenly stopped, and the sequelae of the radical expansion strategy were gradually settled. The overseas warehouse track once again revealed its hardcore nature and operational threshold as a heavy - duty infrastructure.

"The enthusiasm of customers to pay several times the premium to compete for warehouse space in the past has gradually faded, and more demanding price negotiations have become the norm," a service provider recalled. The large - scale warehouse capacity built through the previous land - grabbing did not become a "cash cow" but instead became a "money - burning hole" - it should be noted that the bills for operating large - scale overseas warehouses are no small matter.

"Experience teaches us a lesson once. The market reality has helped us correct our operational logic," he told EBrun. "Ultimately, the competition in the overseas warehouse industry is not a one - shot '100 - meter dash' but a marathon - style endurance overtime race."

However, after the worst comes the best. In 2024, the industry entered a re - balance stage under the interweaving of multiple variables:

The return of value and the highlighting of potential became the themes of this stage; after the bubble burst, real demand and genuine growth began to surface, providing a solid foundation for the overseas warehouse industry to regain its strength; the painful period instead became an excellent melting pot to force service upgrading, polish core capabilities, and find value anchor points.

Specifically, the driving forces originate from both the external environment and the industry itself.

The popularity of the semi -托管 model has forced the cross - border supply chain to accelerate the construction of local warehousing and local fulfillment capabilities; the exposure of the fragility of traditional cross - border logistics due to geopolitical risks has forced merchants to plan ahead and move closer to more stable and controllable local warehousing and distribution networks; tightening import policies in multiple important markets such as Europe, America, Latin America, and Southeast Asia have highlighted the rigid demand nature of overseas warehouses in customs clearance crises and tariff reforms.

Meanwhile, the industry has carried out capacity clearance and weeding out the bad after extensive expansion. A group of leading service providers with stronger professional capabilities, deeper technological reserves, and more resilient capital chains rely on scale advantages, utilize the flywheel effect, and continuously expand their market share, promoting the overseas warehouse market to move from a scattered, disorderly, and wild development stage to a stage of resource integration and orderly competition.

The emergence of new value - added services, the empowerment and efficiency improvement of cutting - edge technologies, the steady advancement of the compliance trend, the further expansion of the full - channel service coverage, and the resource inclination of cross - border platforms towards local fulfillment merchants... Supported by multiple potentials, the overseas warehouse industry has been able to stabilize itself and cross the cycle amidst the external shocks and internal restructuring processes.

Today, change and development in the overseas warehouse industry are still "in progress."

02 Stock Game, Cooling of the Real Estate Market, Decline of Direct Mail: Overseas Warehouse Enterprises Face a Reality of "Challenges and Benefits" Coexisting

As an industry that operates based on physical warehouses, overseas warehouses with heavy assets and heavy operations are undoubtedly a kind of business with "deep门道." Operators need to "dance gracefully" among diverse regulatory and interest entities and seek the optimal solution for business development under a complex game framework.

Focusing on the unique ecosystem of the overseas warehouse industry, its practitioners are affected by various structural factors - it can be said that challenges and benefits coexist. Among them, the most prominent are the following four dimensions:

Firstly, the stock competition within the industry

Currently, there is still intense stock competition within the overseas warehouse industry.

On the one hand, small and medium - sized service providers face severe survival pressure. The efficiency disadvantage caused by low automation, the shrinkage of traditional core businesses, and the weak compliance and capital capabilities make it difficult for them to withstand policy and market fluctuations. Some small and medium - sized warehouses with poor locations and low specifications are even in a dilemma of "riding a tiger and finding it hard to get off, with no one willing to take over."

On the other hand, industry integration is accelerating: leading enterprises reduce costs and improve efficiency through optimizing warehouse network layout and large - scale operations, and even obtain asset - based returns, forming a flywheel effect of "the strong get stronger."

Facing the adverse situation, small and medium - sized service providers are forced to engage in "differentiated competition." Relying on decision - making flexibility and operational agility, they focus on niche markets such as special product categories, specific regions, or customized needs to avoid direct conflicts with giants.

Secondly, the bargaining pressure exerted by the customer group

As of early 2025, many mainstream product categories are still in the stage of shifting from active restocking to passive restocking. Coupled with the "rush to import" restocking phenomenon forced by the tariff changes in the United States, the demand for overseas warehouses remains strong. Relevant enterprises have gradually emerged from the embarrassing situation of "more outbound orders than inbound orders" in previous years and have taken a more active position in pricing.

On the other hand, the customer group structure itself is also a key variable affecting the profitability of overseas warehouses.

There is a large number of small customers, but their business scale is small and their profit margins are thin. Therefore, in the process of choosing service providers, they often keep looking for lower - cost options and are even willing to sacrifice compliance and service quality. The continuation of such transaction relationships has also forced service providers to engage in price involution, reduce compliance investment, and lower service standards, forming a vicious cycle of mutual reinforcement between low - quality service supply and low - quality demand.

In contrast, the demand of large customers is relatively stable, and they are willing to pay a premium for service quality. However, at the same time, relying on their purchasing power, they often form an asymmetrical game relationship with service providers, resulting in a situation of "the customer is strong and the service provider is weak."

Thirdly, the cost pressure from various upstream and downstream suppliers

In terms of real estate suppliers, the overseas commercial real estate is undergoing a structural adjustment in the supply - demand relationship. Affected by the oversupply, the rent increase of overseas warehouses has slowed down, the rent in some popular areas has decreased, and the vacancy rate has continued to rise.

Many suppliers are re - evaluating market expectations, actively sacrificing operating income, implementing a flexible pricing mechanism, and releasing benefits to long - term tenants to accelerate the inventory clearance process. In the next few years, a buyer - dominated overseas warehouse real estate market may gradually form in core areas such as the western United States.

In terms of first - leg air freight forwarders, as 2024 ended, the "seller's advantage" in this field is gradually weakening. Especially since Trump launched the "tariff war" after taking office, the situation has reversed rapidly: since February, the freight rates of some mainstream routes have once fallen below 20 yuan/kg, a drop of more than 50% compared with the peak in December last year.

In contrast, the current overseas last - mile express delivery industry is still a market deeply dominated by sellers. Traditional large - scale logistics providers still have strong bargaining power, and the pricing shows a significant upward trend - mainly due to the relatively high proportion of rigid growth in operating costs. However, the rise of emerging carriers - such as Amazon Logistics, UniUni, and On Trac - is still expected to bring more diverse solutions to this market.

Fourthly, the potential threat of alternative solutions

Currently, although "alternative solutions" represented by direct - mail parcels, platform warehouses, and even self - built warehouses by sellers pose a certain threat, they are still difficult to shake the market position of third - party warehouses due to multiple subjective and objective factors. The market prospect of third - party overseas warehouses remains promising.

Specifically, as the biggest "threat" to the third - party warehouse model, the traditional "direct - mail parcel" model is now facing unprecedented challenges.

In terms of cost, compared with the overseas warehouse model, the unit cost of cross - border direct mail has a significant disadvantage. Timeliness is an even more fatal shortcoming: in the North American market, local fulfillment can usually be delivered within 1 - 3 days, but direct - mail parcels on average take 5 - 10 days, which is difficult to meet the local consumers who pursue "instant gratification."

What's more serious is that the rise of global trade protectionism is also hitting the foundation of the direct - mail model hard. Marked by Trump closing the T86 customs clearance channel for China, the US customs process has become more complicated, and the tax burden on small parcels has been equalized with that of general trade. Other countries and regions are also brewing similar tariff reforms, and the price competitiveness of direct - mail parcels will continue to be under pressure.

The self - built warehouse and platform warehouse models also have limitations. Self - built warehouses place extremely high requirements on the enterprise's capital strength and operational capabilities. The construction period is long and the management cost is huge, which is really "unbearable" for the vast majority of small and medium - sized cross - border sellers. And platform warehouses imply the risk of exclusivity, and merchants are deeply bound to a single sales channel, which may limit the flexibility of inventory allocation and the multi - platform expansion strategy.

03 Digital Empowerment, Resource Linkage, Customer Group Iteration: Amidst Involution, Differentiated Competition Strategies Emerge

After the previous "shuffle and shock," the overseas warehouse industry is entering a new cycle of re - balancing supply and demand. The past disorderly expansion and homogeneous vicious competition are over, and a more profound transformation is quietly taking place. The market is no longer satisfied with the simple stacking of basic warehousing and distribution services. The fission of customer demand has spurred the innovation of refined services, and service providers have been forced to shift from the fanatical "land - grabbing" in the incremental era to the refined operation in the stock competition stage.

In this regard, differentiated competition strategies are no longer an "optional item" but have become a survival foundation and a gold - mining tool that must be emphasized. Unique service strategies have become the key for overseas warehouse enterprises to build competitive barriers, efficiently lock in high - quality customer groups, and improve profitability. Accelerating innovation has become the key for the industry to break through the value ceiling.

The Analysis and Outlook of the Third - Party Overseas Warehouse Industry from 2024 - 2025 by EBrun points out that a group of leading enterprises are relying on their own resource endowments to reconstruct cost and experience. Some typical cases are introduced as follows:

Empowering Customers: Promoting Capability Co - construction and Implementing Refined Operation and In - depth Accounting

Currently, leading overseas warehouse service providers are gradually deepening their cooperation with customers. By sharing data prediction models and cost actuarial systems, they are promoting customers to build refined operation capabilities. The core of this strategy is to guide customers to break through the traditional extensive management model and achieve a transformation from macro - total accounting to micro - unit analysis.

Industry practice shows that most cross - border sellers have not established a cost accounting system at the SKU level. Specifically, they lack precise control over the supply - chain cost structure, regional fulfillment costs, and break - even points of core SKUs. Enterprises often fall into the operational trap of "overall profitability but structural imbalance" - that is, relying on a few best - selling products to cover the losses of most SKUs, a fragile profit model.

In response to this pain point, forward - looking overseas warehouse enterprises are empowering customers through the following paths: first, constructing a logistics cost breakdown model at the SKU level to quantify the unit cost under different transportation scenarios; second, presenting the cost structure map through data visualization tools to help customers identify profit contribution points and potential risk items.

Scenario - based Services: Building a Demand - oriented Service System Based on Sales Scenarios

Currently, third - party overseas warehouse service providers are accelerating the transformation from basic fulfillment services to scenario - based value - added services. Their R & D logic has been upgraded from traditional logistics process execution to in - depth adaptation to terminal sales scenarios.

Some large - scale service providers have launched physical exhibition hall services for overseas small and medium - sized distributors to help with the offline display and distribution of products; for the household consumption scenario, they have launched end - value - added services such as on - site installation; for physical retail customers, they have designed a return and exchange plan with stores as the collection nodes, realizing the integrated capacity coordination of forward distribution and reverse recycling (that is, delivering goods to stores on the outbound journey and collecting returned items on the return journey) to improve logistics efficiency.

For example, Fandian International, a "global integrated supply - chain comprehensive service provider," has widely built a showroom network of "front - store, back - warehouse" in core regions of Europe and America: the front - end showroom undertakes functions such as product display, scenario experience, and business negotiation; while the back - end warehouse provides strong support for fulfillment and after - sales services.

This model realizes the in - depth coupling of warehousing and logistics services with scenario - based sales. For example, furniture enterprise customers can use the showroom to display their products, creating opportunities for overseas distributors to experience the products on - site and conclude orders, and relying on Fandian International's overseas warehouse and local logistics distribution capabilities to efficiently fulfill after - sales commitments such as delivery, installation, repair, and return.

Breaking the "Zero - sum Game" on the Cost Side: Reducing Fulfillment Costs Organically through In - warehouse Service Innovation

Reducing fulfillment costs organically through in - warehouse service innovation has become a key R & D strategy.

In the past, in the field of fulfillment costs, there has often been a tense "zero - sum game" between overseas warehouse service providers and customers: for every extra profit the overseas warehouse makes, the customer's cost increases by one point; conversely, if a lower price is offered to the customer, the profit of the overseas warehouse will be correspondingly reduced. Under this business model, it is difficult for both parties to achieve a win - win situation, and the industry has frequently fallen into price involution.

However, some forward - looking service providers are breaking this traditional deadlock by innovating services in a micro - way, reducing costs structurally and organically. They not only obtain value - added service income but also help customers effectively reduce the comprehensive fulfillment cost, thus achieving mutual benefit for both parties.

For example, value - added services such as "naked goods warehousing and packaging" and "one - inventory, multi - channel" avoid unnecessary waste of consolidation space, picking costs, and packaging material costs, and improve the rapid turnover ability of the inventory, enhancing the efficiency of capital use.

Entering a Larger Market: Shifting from E - commerce Warehouses to Industrial Warehouses to Explore New Customer Sources

Against the backdrop of the reconstruction of global trade policies and the reorganization of regional industrial chains, overseas warehouses are undergoing a positioning upgrade from e - commerce supporting services to industrial infrastructure.

On the one hand, traditional bulk trade customers are accelerating their digital transformation, and their demand for warehousing services has extended from simple goods storage to in - depth services such as supply - chain visualization and dynamic inventory allocation; on the other hand, with the deepening of China's manufacturing going global, the supply - chain supporting needs of local business forms such as chain retail and catering are also continuously being released.

The dual - wheel drive of traditional industrial customers and emerging business form demands is changing the customer group structure of the overseas warehouse industry.

Leading service providers have started to build industrial - level service capabilities: through professional warehouse design to accommodate bulk goods storage, developing a 2B/2C hybrid fulfillment system to meet multi - channel distribution needs, and integrating value - added services such as customs and tax services to form a full - link solution.

For example, Fandian International is committed to providing refined supply - chain services for overseas physical business forms and has accumulated many successful cases. Its cooperation customers include well - known enterprises such as Singapore cruise companies, Tai Er Fish - with - Pickled - Cabbage (overseas), and Haidilao (overseas).

In addition, the company is also increasingly recognized by international top - tier enterprises in expanding overseas local industrial customers. For example, in 2024, it became the warehousing and logistics service provider for BMW in Germany, achieving a strategic breakthrough in the high - end manufacturing supply - chain service field.

The above content and views are excerpted from the Value Return, Potential Highlighted: Analysis and Outlook of the Third - Party Overseas Warehouse Industry from 2024 - 2025.

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This article is from the WeChat official account "EBrun". Author: Wang Yu. Republished with permission.