A research report from China Securities Co., Ltd. indicates that cross-border e-commerce logistics is undergoing a profound transformation from "cross-border" to "localization." The overseas warehouse model is projected to surpass direct mail for the first time in 2026, becoming the mainstream approach. This shift is primarily driven by new tariff policies in Europe and the US—such as the US canceling the $800 duty-free threshold and the EU eliminating the €150 exemption—which undermine the cost-effectiveness of direct mail and force platforms and sellers to adopt localized fulfillment.

Additionally, a structural gap in US last-mile delivery, caused by the strategic retreat of traditional giants like UPS, FedEx, and USPS, has become a key competitive barrier in cross-border e-commerce logistics. Going forward, single-service logistics providers will face pressure, while end-to-end integrators with full-chain capabilities—including China-origin direct mail, overseas warehousing, and local last-mile delivery—are expected to emerge as the ultimate winners.

Key Insights from the Report

Over the past five years, China's cross-border e-commerce logistics industry has grown at a compound annual growth rate (CAGR) of 11.9%, while SHEIN's gross merchandise value (GMV) surged at a 43.3% CAGR, reflecting a structural dividend. According to Frost & Sullivan data, the overseas warehouse model is expected to achieve a CAGR of 12.0% over the next five years, surpassing the direct mail model's 10.7% CAGR. By 2026, the overseas warehouse market size is set to overtake direct mail for the first time, accounting for 50.6% of the total.

The core competitiveness of the direct mail model lies in "small parcel duty-free treatment and zero inventory." However, new tariff policies in Europe and the US—such as the US eliminating the de minimis exemption in May 2025 and the EU removing the €150 exemption in July 2026 while imposing fixed tariffs—directly erode its cost advantage. The direct mail model also faces three major weaknesses: low gross margins (around 7%), high dependence on major clients (e.g., Yanwen's largest client accounted for 51.9% of revenue in 2023), and volatile air freight costs.

To address these challenges, cross-border e-commerce platforms are implementing three key adjustments: localized fulfillment, multi-brand tiering, and supply chain relocation. This is driving a surge in demand for overseas warehouses. By 2025, overseas warehouse shipments accounted for 88% of total deliveries, and the growth rate of overseas warehouse numbers has accelerated to 40% under the impact of tariffs. SHEIN's revenue structure changes also confirm this trend, with semi-managed and POP model shares increasing as the company expands its local warehouses in the US and Europe.

Why SHEIN's Per-Shipment Cost Far Exceeds Yanwen's Price

In 2025, SHEIN's per-shipment fulfillment cost was $18.3, compared to Yanwen's per-shipment price of just $6.2—a gap of about $12. This disparity can be attributed to four factors. First, differences in service scope: SHEIN covers the entire chain from factory to consumer, while Yanwen primarily handles cross-border trunk lines and customs clearance, which account for only 35-40% of total chain costs. Second, package characteristics: SHEIN's packages are heavier (due to multi-item orders) and serve 160 markets, including high-cost destinations in Latin America and the Middle East, whereas 90% of Yanwen's business is concentrated on mature North American and European routes. Third, pricing power: Yanwen offers extremely low prices to secure major clients like TEMU, resulting in gross margins of just 3% for large clients—far below those for small and medium clients. After the withdrawal of a major client in 2024, Yanwen's overall gross margin actually improved. Fourth, tariff responsibility: SHEIN includes tariffs in its fulfillment costs, with an estimated per-shipment tariff impact of $0.2 in 2025, potentially rising to $1 under new EU policies. Yanwen, in contrast, only provides customs clearance services and does not bear tariff costs. Quantitative analysis suggests that differences in service scope account for 45-70% of the gap.

Industry Accelerates Investment in US Last-Mile Delivery

China's cross-border e-commerce logistics market is highly fragmented, with a top-five concentration ratio of only 8.1%. This is largely because most companies operate only as a single segment within the supply chain. Within the full chain, trunk transport, overseas warehousing, and last-mile delivery are the core value segments. Last-mile delivery, due to its strong localization requirements and reluctance from overseas companies, has become a key competitive focus for Chinese firms.

The US last-mile market is experiencing a "once-in-three-decades" structural shift. On one hand, platforms like SHEIN and TEMU generate massive volumes of low-value small parcels (approximately 3 million per day), demanding extremely low last-mile delivery costs of $3-5 per parcel. On the other hand, traditional giants UPS, FedEx, and USPS are strategically retreating due to low profits and union costs, with USPS facing significant losses. This has created a structural supply-demand gap. New players such as GoFo, UniUni, and Yanwen are leveraging an asset-light model of "self-operated sorting plus crowd-sourced delivery capacity," proven to be scalable, and entering the market at prices lower than USPS. The competitive dimension in the industry is shifting from "price" to "last-mile control" capabilities.

Risk Analysis

Risks include the continued tightening of tariff policies in Europe and the US, along with the potential for a "double whammy" effect; volatility in air freight costs and declining profitability of the direct mail model; and intensified industry competition, high customer concentration, and investment return risks from new business ventures.