20 March 2024
Here are some important updates to keep in mind.
(i) Container Rates will remain steady
They peaked in late January / early February and have been slightly trending downwards. We follow the Drewry World Container Index (WCI) as a price predictor, and the index will have to drop to around 2000 pts before we are able to reduce prices again (currently it is over 3000). Container costs represent only a fraction of the total costs of a shipment, so a 10% drop in container prices does not mean all expenses drop down 10%.
(ii) Amazon FBA is now enforcing a more rigid inventory placement program
As of March 2024, creating shipments to FBA are more complicated. Amazon offers 2-3 placement options (fully distributed, 1 destination, or 2 destination), and then offers 3 locations (east, west, or central). Combined with fluctuating prices with the dates and times, this makes shipment planning more difficult, and prices more expensive. There are severaloptions for upcoming shipments starting with 2406:
1. Allow us to pack your items.
We will first create the shipment for you at the cheapest possible rate (normally fully distributed, case-pack) and then pack the items according to amazon’s plan. This will incur extra packing fees from our side, but they will be considerably cheaper than using Amazon placement. Currently a flat rate of 125 THB per outer box will be assessed for having usboth plan your shipment and pack your items (note that each item must be ready-for-sale, including barcoded). We will need to receive the items at least 2-3 days additional in advance for this, so we have time to plan and pack.
2. Allow us to make a shipment plan for you, and you can pack your items and send us the boxes. We’ll charge additional for the shipment plan, as it takes some time to work through multiple scenarios. This will start at 500 THB per shipment and may go up depending on the complexity (number of SKUs and boxes) of the shipment.
3. You can create the shipment yourself and either pre-label or have us apply the labels for you. There is no additional cost.
4. Amazon is also pushing its AWD (warehousing) system – which can send items into FBA. In this way, our warehouse can serve as a cross-dock and we can forward your pallets to the AWD system.
Amazon will receive and then replenish your FBA stock according to their own algorithms – with the advantage of removing placement fees. There is a disadvantage in that you will not be able to fully control when your stock is replenished. There are also other inbounding and storage fees to consider. Prior to March, AWD would not have been cheaper.
However, in some scenarios now, given Amazon’s new placement fees, using AWD – especially for complicated shipments involving multiple SKUs – may become cheaper.
5. We are currently exploring promising Amazon registered software options that will generate several combinations of date / quantities / destinations to give the optimum price, but we would recommend this only for high volume sellers (able to send 2 or more pallets per month) due to the high cost of the software. It is a feature we are looking to implement shortly.
(iii) Please be patient over the next few months as we deal with both container pricing and rapidly changing Amazon landscape.
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