Amazon builds China warehouses to aid sellers amid US customs scrutiny

Amazon is expanding its warehousing capabilities in China, establishing new facilities near major ports to cater to Chinese sellers navigating increased scrutiny at U.S. customs. The company's Global Warehousing and Distribution (GWD) program, launched with a Shenzhen site in April, aims to streamline cross-border logistics, customs clearance, and delivery to Amazon's U.S. fulfillment centers.

The initiative offers significant cost savings, with storage costs potentially reduced by up to 45% compared to Amazon's U.S.-based bulk storage services. Furthermore, by integrating with Amazon Global Logistics (AGL), inventory can reach U.S. fulfillment centers up to seven days faster, allowing sellers to bypass third-party freight forwarders.

This expansion comes at a time when Chinese sellers represent a substantial portion of Amazon's active seller base and new registrations. The move addresses challenges posed by changes in U.S. trade policy, including the end of the de minimis trade exemption, which previously allowed duty-free entry for packages under $800. Amazon's program allows sellers to keep inventory in China until needed, potentially avoiding pre-payment of duties and reducing the risk of goods sitting in U.S. warehouses for extended periods.

Amazon plans to open more GWD locations in China, including a facility in the Shanghai Yangtze River Delta region, to support shipments to its European and Japanese fulfillment centers. The program is designed for sellers to list products once and manage inventory from origin for global sales, with positive feedback reported from sellers during the trial phase.