In this time of pandemic, almost everybody is going into e-commerce. It’s a huge shift pushing everybody to online purchasing. But then, the logistics is still kind of old-fashioned and it’s really time to catch up to the demands. In this episode, we visited the office of Forest Shipping here in Shenzhen, China and talked to Forest Zhang and Diane M. We talked about how sellers have been adapting and some tips and tricks for sellers about shipping to the warehouses and VAT.
Topics Covered in this Episode
Intro Forest Zhang & Diane M
Welcome Forest Zhang, the founder of Forest Shipping, to Global From Asia Podcast. It’s a pleasure to have you back with us! And Diane too, Head of Business Development.
Your perspective of shipping since the pandemic
How are Chinese sellers adapting to this time? How are Western sellers adapting to this time?
Policy changes in Europe on imports
Earlier this year, there were some big updates on needing a European company to import, what changes have you seen there?
Amazon USA closing Chinese Amazon seller accounts
Not exactly logistics, but what have you noticed from the huge wave of large Chinese Amazon sellers having their accounts shut down?
Inventory Management - China stock vs USA stock vs EU Stock
Are sellers keeping stock spread across various regions, or shipping all to their main market countries? Are sellers adjusting their inventory management balances based on the pandemic?
Sellers preparing for Q4 2021 (Peak Season)
What are some ways sellers are adjusting their logistics plans with this shipping nightmare and the fourth quarter (peak sales for Christmas sales in US).
NEW ISSUE - Electricity Limits in China
Chinese government has started restricting the amount of electricity used. How do you think this will affect production timelines and other logistics issues?
What do you see in your “Crystal ball” for the future?
What are some ways we can all adjust to this?
Have you adjusted your business, services, or strategy at all during this time?
How has Forest Shipping been adjusting?
How can people connect with you and your company?
Thanks for coming on and your support for GFA!
People / Companies / Resources Mentioned in this Episode
√ Forest’s VIP Page
√ Forest’s company – Forest Shipping
√ Previous GFA Podcast episode with Forest – GFA episode 223
√ Visit our GFA partner – Mercury – for US banking solutons for your ecommerce businesss
Episode Length 36:19
Thank you Forest & Diane for being on the show, and thank you everybody for listening in.
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[00:00:00] Okay, thank you everybody for tuning in to a Global from Asia podcast this week. We’re talking about challenges and logistics from China and Asia. Shaina, and you’ll, I guess, share about Shopee, Shopee Shipping. Yeah, Shopee Shipping is our favorite here in the Philippines, also Lazada. Okay, cool. Welcome to the Global from Asia podcast, where the daunting process of running an international business is broken down, into straight up actionable advice.
[00:00:28] And now your host, Michael Michelini. Okay. Shaina, it’s great to have you here in our intro. Yeah, thank you so much for having me today. Yeah, it’s fun. I mean, some people probably, you know, recognize you from our, our YouTube channel over the years. You’ve done some cool videos. Yeah, no, I’ve met people and they are like, oh yeah, Shaina, you know, that’s great.
[00:00:52] I think this is your first appearance on our podcast series though. Yeah, it’s actually my first time here. It’s great. It’s great. And so, you know, today you’re in our intro only. We’ll have the interview, will be me with the guests. But hopefully in the future you could also be involved with the interviews as well. I mean, you’re really good at it, I think you’ve been doing great with our, our video series and everything.
[00:01:13] So, thanks for that. You’re welcome. Sure. So, so this week’s show we’re going to talk about, we interviewed Forest Zhang. She is a Chinese entrepreneur, a female entrepreneur too, which I’ve been saying is we’re trying to find more female entrepreneurs, especially in Asia. I think it’s a, it’s great to support, support them, and she’s still, she’s built quite an empire.
[00:01:36] She’s got a pretty massive shipping company called Forest Shipping, which is her name is English. Her English name is Forest. And we, we visited her office here in Shenzhen, China, and I did the interview in her office and it’s a pretty fascinating discussion, you know, like, right. We were joking a little, well, it’s not a joke.
[00:01:54] It’s true. Like you’re ordering on Shopee, you’re a Shopee buyer, right, in the Philippines. And if some big delays, right. You’re noticing delays? There are gap delays because before the pandemic, my order will arrive like five days after I ordered it. But now I’m waiting more than one week just for my orders to arrive. That’s crazy.
[00:02:17] Yeah. So, I mean the whole world. Actually everybody is going into e-commerce now. Right? It’s a huge shift pushing everybody online. But then the logistics is still the kind of old-fashioned. You know, got to, got to catch up to the demands. So yeah, in this interview, we talk about how sellers have been adapting, some tips and tricks for sellers about shipping to the warehouses and VAT.
[00:02:43] I don’t know if you’ve heard also, Shaina. But in China, the government is restricting electricity now. They’re turning factories off. Oh, I didn’t know that. Yeah. So we can share about that in the outro or in a conclusion. I think for now we’ll keep this intro short, but also Shaina and I will chat a little bit about her Shopee experiences in more detail.
[00:03:04] And I’ll share a bit about this electricity cutdown. But let’s for now jump into the show, Episode 360 with Forest Zhang about Forest Shipping. Let’s do it. Okay, let’s go. Thank you to our ongoing GFA partners, sponsored level mercury.com. Travis Price is BD there and an e-commerce seller himself coming to some of our events, support what we do really appreciate keeping this show rolling, even through the rough times of the COVID. And their sponsorship has supported the show and is a great sponsor and great service.
[00:03:38] A couple of our different businesses that we’ve invested in for US bank accounts, without having to go there without having a hundred percent US partner ownership. You can do this and it’s totally free. No applications. I don’t even know how they make money, to be honest. I mean, everything is free, but they even give you some cash bonus as well as me.
[00:03:55] If you hit certain criteria, if you use our link globalfromasia.com/mercury. For more, check them out, give them a shot. Even when I have a second bank, if you already have one. Let’s do this. All right. Thank you everyone for tuning into the Global from Asia podcast. It’s my pleasure to, to return to Forest Shipping with the founder, Forest
[00:04:16] Zhang. Thank you for being here, Forest and, and Diane. She’s a business manager, we’ve met in previous events and visits. So it’s great to have you both here. Great. Is this a new new office? This is really great. Yeah. When the office, we got a new office last year because the people, the office is so small, we cannot see so, so much.
[00:04:53] I’ve noticed. Yeah, it is true, time flies. But I think how many years I was like, I would think you did it three or four years ago. I was there. So congrats. You have businesses doing good. It’s growing. Yes. Congrats. I know you work so hard. It’s it’s a lot of work. Yes. Yes. I know the team works very hard.
[00:05:16] So Diane, do you want to introduce yourself too. Okay. Yeah, I’m Diane, I’m a sales manager in Forest Shipping. I’ve worked for four years or so. I’ve seen the growth, the growth of the company. So I’m very glad to work in Forest Shipping. Yes, it’s great. I think, I think you, your company has a lot of insights to share with us today.
[00:05:48] You know, we’re still, I guess it’s still coronavirus times. I mean, it’s very extreme. Extreme conditions for so many sellers all around the world. You know, we’re, we’re recording this and this will, This will go out during October, but we’re recording is September, 2021. It’s been a year and a half now since the pandemic started, but it’s still, it’s still very difficult times for logistics, right?
[00:06:16] Yeah. So, so today we’re going to try and talk about some of these. I remember I saw a photo you share on your, WeChat of the trucks, backed up. So many container trucks backed up. Can you share some of these stories?
[00:06:33] Yeah, of course the pandemic in 2020, So there were a lot of group shipments from China to the United States or overseas Europe. And so we have way we have growed up more, more, more, and more. Once in the last year. So every day our warehouse is very busy and the trucks are all lined in the front of that warehouse.
[00:07:06] So yeah, it’s, that’s the year. It’s definitely it. So one interesting perspective and we learned is, you work with both chinese sellers and international sellers, right? So I don’t, I hope I know you can’t really, we don’t want to disclose your specific clients, but I would love to hear some, some ways Chinese sellers are dealing, adapting to the pandemic and maybe some ways some foreign sellers are adapting or changing.
[00:07:37] If you could share some insights. Like you could choose maybe to start with, I think on our list, the Chinese sellers. Let me talk for the chinese sellers since the last year, our e-commerce site. Actually that he experienced a lot from the growth for the gifts. Last year, our customer, the, because, because the, the productivity is very low in Southeast country, actually in China, the government control is performing very well.
[00:08:19] So we have our productivity in China is very good. So we can ship. They can produce a lot so we can ship a lot. We see a lot of chinese Amazon sellers, just as my, my colleague, mentioned with the double or triple. So last year, they need to ship a lot, and also the ocean freight and air freight
[00:08:46] is not so, so high compared to this year’s price. So this year there’s skyrocket growth. Our customer last year, they do not work here for the shipping price. But this year, because from, this May, Amazon has closed a lot of Amazon accounts, and also they control the human courier. So some ship, a little, little, a little little by little, and so they care for the price.
[00:09:32] Okay. All right. And then the freight and month as a tool for the ship month. So as a shipping company, we have worked with different shipping liners, like the quick, faster shipping line and the common shipping line for different services. So we offer different shipping services to our customers. Then they just use the service
[00:10:00] based on their demand. Like if they need more speed, or they care more about the cost. This is for Chinese sellers or Western sellers. Diane can introduce about this. Because last year until this year, Amazon did a lot of changes on their inventory control. So there are some, they need their inventory, so they make their inventory management.
[00:10:32] So, and due to their long delays in days in shipping, so the sellers just separated the shipment. They ship some by air or some by sea or some from warehouse to sea, or those days. Yeah, it depends on the kind of shipping mode. They will choose the different shipping mode to, to manage the inventory and logistics
[00:11:03] and, and then if you do that, it’s limited in Amazon. They also send a shipment not just to Amazon. They maybe send to the 3PL warehouse. You had to start cargo. So when it’s available for retail stores at Amazon, they were sent to Amazon from the 3PL warehouse and they save the time to when they are
[00:11:37] shipping to customer, They used to just ship maybe one big shipment from China to Amazon. And now they are separating the shipment. They’re much less products each time. So they were shipping more times and just a few products per shipment.
[00:12:00] so yeah. To, to deal with what’s going on right now. So, sellers are choosing more shipping modes and more shipping ways to manage the inventory and the logistics. Got it. Got it. Okay. So we just talked about some of the international or foreign sellers and Chinese sellers’ difficulties whose do you think is doing better now in today’s environment
[00:12:32] The domestic sellers might be more active than the foreigner sellers. Yeah.
[00:12:45] Many foreign sellers, most of the foreigner sellers now just have a small business, not just the big, big sellers and due to the digital crazy shipping cost, the profit, it just squeezed the profit. True. Yeah. It will be very hard for them this year. And some businesses, some of my customers, they just start to import the kinds these days, maybe later.
[00:13:24] So the domestic, domestic sellers are still very active. Got it. Yeah. I mean, I guess maybe it’s a more fair question is the bigger sellers are getting bigger and the smaller sellers are going away. I mean, I think even before the coronavirus with the trade wars and the, the, the more competitive it gets, usually, the bigger gets
[00:13:53] Bigger and smaller gets smaller. So maybe a more proper question is the bigger sellers are doing better and the smaller sellers are having more trouble
[00:14:06] these days. Yeah. So there’s a lot of questions I could ask. You know, but I think the next is, you know, you, you do a lot with, I think you’ve helped in Europe and the US right. So In Europe, they’re getting more, I guess everywhere is getting more difficult, but the VAT policy in Europe has gotten more strict. Is that the right way to say it?
[00:14:30] I’m not so active in Europe personally. This year, there we use other European, European policies. So about VAT in local country. They have used another country to the importing products. So yeah. So we can say what can say they are getting more stricter in importing the goods to Europe.
[00:14:59] So yeah, that, that they may need their sellers to be more focused on a compliance of the goods, not just to ship everything. The products, they have to follow the rules and the policy. So, yeah, it’s not a bad thing to me because if, if, they have these stricter rules, then the sellers will need to improve the quality of their products. They have to make
[00:15:33] everything qualified to do that certifications. So it’s not a bad thing. Yeah. Maybe this, this, this could eliminate the fact, how do you say it? Yeah, the bad sellers or the bad quality, bad quality companies. Do they need to have, I think they have to have a Europe company now to import, or somebody has to be an importer.
[00:16:08] The need a local, VAT number to import in the destination country. I think there’s good, a good side is that the sellers and also the shipping company that we don’t need to pay the importer’s wage
[00:16:32] when the shipment is cleared into the country. But before the import work is very high, the customer need to pay before they sell. Now they do not need to pay the import wage, he doesn’t pay before the sales. Whereas products were paid on behalf of them. Great. Great. So that’s a question I’m just, you know, we have some different topics today about this changing times.
[00:17:02] You mentioned it already. I think many seller account, especially Chinese-based Amazon accounts have been getting closed. You’re obviously losing your clients bad, so what’s your reaction or what have you noticed with the closing of seller accounts in Amazon? The market knows Amazon indeed closed many accounts.
[00:17:24] But for shipping companies, it obviously is not affected by the closing of the accounts but of the high price of freight and you want to really control. I think, the reason Amazon closed the accounts because they want to educate the market, to regulate the market. You know in the the cross-border trade, really that maybe if a lot more sellers abide by the rules, it’s not a hard way.
[00:18:03] So the grow grow up. It’s not a lot of ways for compliance, there may or maybe not, not very good actions. So, so, so Amazon will manage your company. They’re a global company. So I think they need more, their customers, their, their sellers to have the same, the same vaue, the attitude on the how to grow them, grow their business.
[00:18:45] So if so you have some account with them, Amazon on match score. Yes. They sell well, very well, but they had different and not very good behavior or assigned
[00:19:10] I mean, they need more well educated sellers. They need to make and do more to
[00:19:23] educate the customers for the sellers to grow up with compliance. So you can see, recently, Amazon has opened a Chinese center in Guangzhou. I think they want to train with the own method and tool set is how to deal with compliance. . Interesting. Yes. There’s a Guangzhou training center. I know about that. Thanks for these insights.
[00:19:55] My next, my next question is I think you already touched on it, but inventory management now with the high shipping costs, you know, like I told you, I got a quotation for container from Thailand to east coast, US for 30,000USD, who has the, which seems normal now. We have to be very careful of how we manage our inventory, right?
[00:20:18] Because every dollar of shipping costs we can manage better. So you, I think you mentioned already, but I’d love to hear more people are splitting shipments, some said 3PL they keep, do they keep some in China? Do they send some to the US, Europe 3PL, Amazon FBA direct? Like what are, what are some tips or tricks people are doing now to manage the inventory costs and shipping costs?
[00:20:43] Many sellers now choose to choose to put the cargo in the warehouse back in China and some send them to the 3L warehouse.
[00:21:00] Because the Amazon limitations, so they must have some, you know, better stock and then you should net that, that stock, they need to get out of Amazon and to some warehouse, and then they can put a new stock inventories into the Amazon . So these days, many sellers, they choose to use that sort of warehouse.
[00:21:33] Got it. So do they send any to, so from China, probably all to 3PL USA, or did they send any to Amazon directly? Do they split from China or do they send all to the US 3PL and then to Amazon? Mostly they send it to the 3PL, unless they are okay to break the shipping plan of the Amazon seller
[00:21:56] so they were sent to Amazon. But due to the Amazon limit, they have to send the inventory to the warehouse first, then some’s available for their FBA warehouse. So they ship from their 3PL warehouse to their Amazon. Got it. Crazy times. Yeah. So it’s actually Q4, almost Q4. Q4 is the best time, best time for sales for sellers.
[00:22:27] Right. And I’m sure you have many shipments that need to go soon. What’s Q4 looking like so far for, for shipping?
[00:22:41] Like, you know, I mean, everyone, the cost must be higher in Q4. The demand to ship must be even higher now, the shipping costs are already high, so they’ll go higher now in October, you think? Yes, of course. It is always increasing in almost a few months and now is a little bit of a floating plus you’re at a higher level.
[00:23:06] So, so, so the Q4, still, the customers need to choose different shipping modes considering the impact demand of the goods and the inventory management. So they have to choose different shipping modes to separate the shipping. And the known delays these days. So there is a lot in the US and oversea parts.
[00:23:39] So they still separate the shipment. The dropshipper, just the one big shipment, they will ship it to warehouse. They will ship it more times and did the next less, this one, this time,
[00:24:00] Actually customer ship in September. So it’s already done. Yeah. Okay. Yeah, because there’s for the quarter. Alright. I don’t have, I, I I’m trying to launch a new brand, but I’m still delayed. So I didn’t launch. Sometimes October is last minute, but yeah, of course, September is better. And, port congestion is a cause of delay in US ports.
[00:24:34] Some other port, a lot of concerns. They ship earlier than before. Okay. My last kind of main question, it’s a new one. The electricity shortage or limitations in China now. It’s a brand new question. I’m just, I’m really just studying, and maybe you can explain it better than me. But there’s some new policy from the government to save energy or limit energy.
[00:25:03] So I’m seeing people talking about this and I thought it’d be great to hear some what you see or hear or think that’s going to affect the, affect, the situation more. I think any decision my, our government makes is for the great. We do not know why the government, they made the decision, but the.
[00:25:27] We found very interesting, the interesting to see is that after the electricity shortage, shortage policy and the ocean freight decreased a lot. Like last week, not just last week, one week before the ocean freight that from Shenzhen to Los Angeles is around 16,000. 16,000US for shipping container. But this week
[00:26:03] we can book at 9,000. Whoa, that is big, almost 50%. If I see if a government wants to cut power for us to save on the shipping cost and then that would be seen as very good. Great. Yeah. And there were definitely, you know, due to the limits. So the manage back factories, maybe the production. So I guess the, the, the, the, well, take more times to finish the ACOS and yeah.
[00:26:40] So maybe it’s that as near to make the plan to consider this. You know, I’m already thinking about China’s new year. It’s barely even, well, it’s a national holiday this week. Friday, we start in China. There’s the October holiday, but at the big haul, this is the second biggest, but the biggest is the Chinese lunar holiday, which is in, I don’t know, I think it’s in February next year, but now I’m just thinking of limits of energy and a leap.
[00:27:12] I mean, when do you got to place your order before Chinese new year, I mean, five months, six months? Yeah. It’s challenging. There’s the production and the shipping and the limitations of inventory. Like, well, it keeps getting more challenging. Yes. All right. And you end up putting youth to that.
[00:27:38] We’ve seen the ocean freight decreased.
[00:27:44] Do you think that’s connected to the energy? Or what, where do you think that’s coming from? Or just general market this year? The market can not be predicted. What are the factors make, make the change? Great management raising and worrying. We don’t know when to not know what happened, then what will happen tomorrow because the market is very different.
[00:28:15] It’s like they say it is about China business and for foreigners and many books. It’s like the dragon you’re trying to ride the dragon is I feel like this is a dragon, just throwing it. We’re trying to ride this dragon. And then like this, you know, like it’s, we’ll be talking about this times forever. I hope it’s gonna get.
[00:28:37] More stable for the logistics, the market, wherever you step or so we would, when we are not, these ports are hot right now, or the people in the shipping area and export is nice. Then you’d put in. Maybe that will, uh, entity in the cose for the same business as I can imagine. Okay. I think we’re getting to the wrap up.
[00:29:05] Is, is there a last tips or input you’d like to share about, you know, about what today’s talk. Just anything you’d like to add about? I think you’ve kind of just said like, it’s, hopefully they get more stable. Is there any last things, any last tips for sellers or for people to hang in to. To optimize their logistics and it seems like they really need to plan.
[00:29:32] Right. I think planning is so we always need to plan. But now more than ever, you have to prepare how many products when forecasts right. Is probably a main, a main lesson to today. And then that strategy. Okay. And so of course, let’s talk about Forest Shipping. Maybe we’ll do a little, add a little for the video.
[00:29:58] We can maybe do a little tour after, after. But forestshipping.com is the best place. How can people know? It’s a very popular website. We attract customers everyday. Yeah, you do good. Your website marketing is great. And if your site’s well done and clear, so that’s great. And then people could just contact you through the website.
[00:30:21] Yes. Back to this logistics. I’d love to hear a little bit more. If you have more, more juicy details about your shopee Is there any like any, any, any mix-ups or huge delays or problems that you can share?
[00:30:39] I think the most troubled order that I got is I ordered a small silk screen for my, for my clay project. And then it’s only from Cagayan de Oro which is only eight hours, oh no, not eight hours. Yeah, eight hours drive from here to our city. And it took me 21 days to get, receive the parcel. And I was like, why is it happening?
[00:31:06] I badly needed the thing for my project and then why is it that from I, or I choose that store because it’s only based in Cagayan. So I was expecting that three or five days I would receive that. But unluckily sad to say, it’s the opposite. Do you know if it really shipped from there? Or maybe, I don’t know if you did ship from there and that I even chatted the seller, and then he said that we are so sorry.
[00:31:37] There was a holdup because we were unlocked out. We can go out and deliver your parcel to J&T which is our courier. That’s that’s what happened. And then when that, when the parcel arrived at the J&T warehouse, one of the J&T employees was tested positive. So the J&T closed for a week. And then my parcel was there.
[00:32:04] I think that’s the most bad experience I have with Shopee. My, my turn. I don’t know if you know, but I had to evacuate. I went to. I wish that you know it, you know, hopefully you can go to our next retreat. We did a retreat in Bohol for the Shadstone parent company, our parent company, and Alvin was with us and lockdown started when I arrived to Bohol from Manila.
[00:32:30] Cause I was living in Manila and I had my, all my stuff in Manila, my apartment. I read the blog. You read that. Yeah, that was nuts. Right. And you’re talking about J&T. I went to J&T in Bohol on the island. And I was like, can you ship my keys back to Manila to my friend? They’re like, no more shipments. I’m like, no more like, no more, like, what does that mean?
[00:32:54] We can’t ship. Is that real? Yeah. Alvin was, I literally asked Alvin. He was with next to me, literally physically next to me. And they’re like, we locked down. Everything’s locked down. Nothing can be shipped. So I had to leave my keys with a friend in Cebu, and I flew back to China barely before the border closed. I mean, I still will be locked out of China.
[00:33:16] I think if I didn’t go then. And finally, after one month, I think finally he could send it to a grab, to a J&T and the J&T sent it to Manila. And it’s insane. It was like a month I think the key was stuck waiting in my friends. Unbelievable. Right. Unbelievable times. Yeah. So, I mean, I’m sure listeners all have their issues and they’re a prob you know, I mean, we’re all just trying to get through this.
[00:33:43] It’s just, it’s just unbelievable. It’s been over a year and a half now, like March 2020, and we’re in like, we’re in October, almost 2021. And just, it’s unbelievable. And this is still not the same here in our, here in our area. I think things just started, started to, uh, Oakland. No, so start the, the positive cases are just started, rising up
[00:34:15] Oh, no. Yeah, we’re getting a hundred daily in our province. We were just so late. Yeah. I was hoping you meant, started to go down. Our province they say is a late bloomer for COVID. Bad, bad luck. Well, I mean, I, I think. Well, I mean, luckily we can work online. We get to still see, you know, see each other online. And our team, you know, the company here has gotten, we were always lucky we were always working online. But now we’re even, you know, improving our skills to work online.
[00:34:57] Our tools. So I guess we just got to keep adjusting to this new, new normal. And, but I mean, e-commerce, you know, for the listeners, that is booming, you know, I think it will continue to boom, because people can’t buy in stores and people can’t buy the old way anymore. So e-commerce, it’s the best type for the e-commerce to bloom even clothes,
[00:35:18] thrift clothes are being sold online. Unbelievable. Yeah. So it’s with, you know, with changes opportunity, we’ve got to think of the positive and we got to adapt ourselves and our, our business. So, you know, it was always, we’ll have these show notes. I’ve got to double check with the URL. It’s globalfromasia.com/balancing/.
[00:35:40] logistics. So I think Alvin will put that on the screen and it’s been a real pleasure. So, you know, I didn’t know. You’re, you’re like a pro, no scripts and we just did this and it was fun. I enjoyed having you here. Yeah. Okay. Thanks again. And that’s a wrap. Okay. Thank you so much too.
[00:36:04] Okay. To get more info about running an international business, please visit our website at www.globalfromasia.com. That’s www.globalfromasia.com. Also be sure to subscribe to our iTunes feed. Thanks for tuning in.