The Quiet Logistics Revolution Reshaping Global E-commerce
J&T Express earnings, exporting logistics expertise, and more
Logistics has not been the main story when looking at cross-border and go-global trends. In this post, I will examine how logistics infrastructure reshapes global retail and what this means for consumers.
The global logistics infrastructure battle will determine which e-commerce business models will succeed in the next decade. For consumers, this means a continued evolution toward faster, more transparent delivery systems, but with the growing pains of service consistency and environmental impact.
China's logistics ecosystem has become a competitive advantage in global e-commerce because a number of related players are exporting their expertise to markets elsewhere. One of them, J&T Express, just released its earnings last week, and it’s profitable for the first time, with an adjusted net profit of USD 200 million in 2024. The earnings have some good nuggets, so I am taking the opportunity to write about the logistics space.
J&T Express in a nutshell
I have critiqued companies attempting to shed or redefine their Chinese identity in global markets. J&T Express offers an interesting counterexample because it was born in Southeast Asia and made its way back to China.
J&T founder Jet Lee previously helped Chinese phone maker OPPO enter Indonesia. In 2015, Lee left OPPO to start J&T Express. The timing was not accidental—it coincided with the rise of Shopee and Lazada. E-commerce and cross-border commerce and the underlying infrastructure were being built. J&T’s pricing strategy made it a sought-after choice for e-commerce platforms, and it was able to collaborate with Shopee, Salla, Noon, and Amazon from early on. Parcel volume meant J&T could expand swiftly across Southeast Asia—Vietnam, Malaysia, the Philippines, Thailand, Cambodia, and Singapore.
In 2020, J&T entered China, a market already dominated by established players. The timing was again impeccable because it was a time of a reshuffle in e-commerce platform power dynamics. In 2019, China's National Postal Administration data showed that non-Taobao-affiliated e-commerce orders surpassed 50% for the first time. Platforms like PDD, Douyin, and Kuaishou were becoming serious contenders. J&T was a factor in PDD's rapid rise, subsidizing shipping costs for local Pinduoduo merchants in Yiwu, leading to delivery prices as low as RMB 1 ($0.15) for both large and small parcels.
By 2022, the company had expanded to Saudi Arabia, the UAE, Mexico, Brazil, and Egypt. Fast forward to today, J&T achieved full-year profit for the first time in 2024; its China parcel volume growth outpaced the industry while maintaining its number one position in SEA.
Two key takeaways: increased parcel volumes and hard-earned profitability. From the earnings report, it's clear several trends are reshaping the consumer experience,
￮ Local Adaptation: Successful logistics providers must balance global efficiency with local advantages, including payment methods, cultural norms, and geographical challenges.
￮ Rising Expectations: As e-commerce penetration increases (e.g., 22% in Southeast Asia in 2024), consumers demand more reliable, transparent, and faster delivery services.
￮ Social Commerce Integration: The rapid growth of social e-commerce (45.8% of the total e-commerce retail market in SEA) creates new logistics requirements focused on impulse purchases and influencer-driven consumption patterns.
China Domestic Logistics: The Scale Advantage
Elon Musk recently proposed privatizing the US postal service, and maybe he should look to China's logistics sector for inspiration. Why? The numbers tell the story.
Chinese logistics networks achieve remarkable efficiencies through unprecedented package density, parcel volume, and a market-oriented approach. J&T is not even the biggest player in China, and its parcel volume is close to 20 billion, an increase of ~30% YoY. That's the scale of China. To put it in perspective, the US shipped 21.7 billion parcels in 2023, USPS handled 6.6 billion parcels, and Amazon Logistics processed 5.9 billion.
Growth in parcel volume can improve the utilization efficiency of key infrastructure, such as sorting centers, outlets, and vehicle deployment. This supports the scale effect across China's delivery networks and further reduces the cost per parcel. When package density reaches critical thresholds, previously uneconomical delivery routes suddenly become viable. The fierce competition in the domestic Chinese market, with leading players like SF Express, ZTO, and YTO, has driven improvements in routing efficiency and warehouse automation, though often at the expense of working conditions and service quality in some market segments.
Exporting Expertise
The Chinese logistics playbook is being deployed in Southeast Asia, Latin America, Africa, and the Middle East. It’s not just increasing geographic footprint—it's exporting operational methodologies and systems perfected in China's unique environment.
We are seeing that recurring theme, don't we? TikTok's algorithm was built on top of Douyin's trial and error in China and exported to the US market; Temu's low-cost strategy and e-commerce gamification take a page from its parent PDD's humble beginnings…the list goes on.
Taking the U.S. and Southeast Asia for example, the existing legacy logistics systems struggle with inefficiencies:
￮ In the U.S., postal services operate under rigid, administrative routing—packages follow fixed paths rather than real-time demand
￮ SEA's logistics landscape is fragmented, with underdeveloped infrastructure and a patchwork of small regional providers
￮ Both markets lack centralized optimization, leading to higher costs and slower deliveries
SEA's diverse geography—spanning islands, dense urban centers, and rural areas—makes traditional centralized routing inefficient. It takes deep pockets and commitment to invest in regional fulfillment hubs and flexible last-mile networks tailored to each country's terrain. The dominance of cash-on-delivery (COD), which slows fulfillment and increases risks, also needs to be optimized through partnerships with fintech providers for smoother transactions.
Companies are overcoming these inefficiencies by prioritizing market-responsive logistics, where routes and delivery schedules are determined by real-time demand rather than administrative pre-set schedules. Unlike Western logistics firms, which focus on standardized services with clear geographic boundaries, companies in China continue to expand their scope, adding fulfillment centers, cross-border shipping, and last-mile innovations to create a virtuous cycle of efficiency and scale. Case in point: J&T's cost per parcel in China decreased by around 12% to US$0.30.
Even Cheaper Shipping Costs
When consumers marvel at a $5 dress on Shein or a $3 gadget on Temu and get free shipping, they're benefiting from decades of optimization in cross-border logistics that have systematically reduced shipping costs. That $2 phone case you ordered arrived through a complex ecosystem designed specifically for ultra-low-cost items.
When a $9 shirt arrives from China in the EU in under two weeks, it reflects both shipping speed and cross-border integration. As early as 2021, Cainiao invested 100M Euros in building a smart logistics hub in Belgium. Logistics providers have built systems that aim to minimize customs delays through pre-clearance, electronic documentation, and strategic routing through optimized ports of entry. It's also about building these logistical "bridges" and owning the entire flow.
In Southeast Asia, e-commerce retail transaction value increased by 25.7% year-on-year in 2024, reaching US$238.25 billion, with e-commerce penetration reaching 22.0%.
For shoppers, this transformation is tangible. That next-day delivery option that was once the premium is becoming standard. The ability to track your package in real-time—once a luxury—is now expected.
J&T noted in earnings:
"high cost-effective express delivery service can effectively help e-commerce companies and sellers stand out in fierce competition."
This transition puts logistics at the center of brand differentiation. The back-end has become the front-end. Where consumers once focused primarily on product selection and price, they now increasingly evaluate brands on delivery speed, tracking transparency, and ease of returns.
Beyond Business Strategy: Regionalized Trade
Global trade is evolving in response to geopolitical tensions, supply chain vulnerabilities, and the emergence of regional economic blocs. As trade patterns increasingly fragment into regional networks rather than purely global ones, companies like J&T are positioning themselves as critical connective tissue between these regional spheres.
Express logistics is a direct indicator of regional economic vitality, with parcel delivery demand rising in lockstep with economic growth and prosperity. In this context, J&T represents a new class of companies that must adopt—where regional expertise and cross-cultural operational knowledge become paramount competitive advantages. Their progress signals that future winners in global commerce will likely be those who can bridge regions rather than simply operate across them.
The construction of logistics infrastructure creates opportunities and challenges for global retail. J&T’s earnings report indicated that the demand for express delivery in SEA continues to expand, with total parcel volume reaching 15.98 billion parcels in 2024, a 25.2% year-on-year increase.
However, this rapid growth comes with significant challenges:
Service Quality Growing Pains: Despite technological advances, many cross-border logistics operations struggle with customer service issues, mishandled deliveries, and tracking inconsistencies. Relying on complex networks of contractors and subcontractors in the last-mile delivery often results in variable service quality that frustrates consumers.
Regulatory Hurdles: As these networks expand globally, they face increasing scrutiny over labor practices, environmental impact, and tax compliance.
“With the gradual maturity of the express delivery industry... e-commerce platforms, merchants, and consumers have higher requirements for timeliness and service experience,” noted J&T. Meeting these expectations remains difficult for many providers.
So, what’s next?
The global logistics infrastructure battle is more than just a business story—it's reshaping how consumers experience e-commerce worldwide. The companies succeeding in this space are those that can bridge Chinese operational efficiency with local market adaptability.
The winners will be those who can deliver not just packages but trust through reliable performance.
In a fragmenting global economy, these logistics bridge-builders may ultimately determine which e-commerce models thrive in the years ahead. The invisible infrastructure behind our online purchases might just prove more consequential than the platforms themselves.
1) Not aware of any logistics company that started in SE Asia able to successfully expand into Mainland China--by the most competitive logistics market in the world. J&T may be the first.
2) "Elon Musk recently proposed privatizing the US postal service, and maybe he should look to China's logistics sector for inspiration."
The key word is inspiration. China has a much larger blue collar labor force and higher population density than the US, which makes it much easier to put a ceiling on costs.
Perhaps with extensive automation, the US logistics sector can become much more efficient, but even implementing that is questionable given the power of labor unions there.