The rapid rise of fast-fashion e-commerce retailers such as Shein and Temu is transforming the global air cargo industry, according to more than 10 industry sources, as both companies woo consumers with short transit times. competition for limited air cargo space is increasing.
Shine, PDD Group PDD.O Temu and ByteDance's TikTok shops, which recently launched online shopping in the United States, ship most of their products directly to shoppers by air from factories in China in individually addressed packages.
And its growing popularity (according to a June 2023 report from the U.S. Congress, Mr. Shein and Mr. Tem together send almost 600,000 packages to the United States every day) has led to air freight costs from hubs are rising and off-peak airfares are rising. Officials say the season is almost gone and there is a lack of production capacity.
Basil Ricard, director of Greater China operations at freight forwarder Bollore Logistics SDSC.CI, said: “Right now, the biggest trend impacting air cargo is not the Red Sea, but Chinese e-commerce companies like Shein and Tem. ” he said.
According to data compiled by Cargo Fact Consulting, Tem ships about 4,000 tons per day, Shane 5,000 tons, Alibaba.com BABA.N 1,000 tons and TikTok 800 tons. This is equivalent to about 108 Boeing 777 cargo planes per day, the consultancy said.
Driven by strong demand for low-priced apparel such as $10 tops and $5 biker pants, Shein alone accounts for one-fifth of the global fast fashion market as measured by sales, and China's e-commerce industry It is said to be promoting the growth of Core site research.
Fast fashion now accounts for half of China's total cross-border e-commerce and about a third of the world's long-haul cargo aircraft, according to cross-border transportation media company Baixiao Net.
Shein and Tem's growth is squeezing space for other industries on air cargo planes, just as the Red Sea disruption has left global companies scrambling to find alternative logistics options.
“When the Suez Canal (crisis) happened, there was no room to buy, because e-commerce took over everything,” said an executive at an air freight forwarding company, requesting anonymity due to industry sensitivity.
Sources said air cargo demand from fast fashion began to increase significantly in the second half of last year.
German logistics officials say even big tech companies like Apple Inc AAPL.O only transport up to 1,000 tonnes a day, and the growing demand for cargo from fast fashion means that traditional air transport capacity will be vying for limited air transport capacity. He said long-term customers could be forced out.
A spokesperson for German logistics company Schenker said some air cargo carriers are responding to increased demand for e-commerce by adding charter capacity, adding that they are “already highly booked for the long term. “There is,” he said.
Apple declined to comment. TikTok Shop did not respond to messages seeking comment.
“Shane is continually optimizing its efforts to ensure the best customer experience and fulfillment efficiency,” a Shein spokesperson said, without providing further details.
Pursuit of capacity
The surge in demand for fast fashion that began last year has increased air freight rates from China, raising concerns about a long-term shortage of shipping capacity.
“From what we have seen so far, this model of (air) e-commerce is not sustainable either from a profit or environmental point of view,” said Guillermo Ochobo, director of Cargo Facts Consulting.
He said that both Shein and Tem are currently focusing on sea transport due to the high cost of air transport, and are considering opening warehouses outside China to reduce transit times to other regions. He said there was.
Shein has started shipping products to warehouses in the United States to speed up delivery times.
In a presentation at Boeing BA.N's Air Cargo Forum in China in December, Baixiao founder Wang Yongqiang said the increasing supply of long-haul cargo planes would support the growth of cross-border e-commerce. He said he couldn't catch up.
In its 2023 commercial market outlook, Boeing estimated that China's air cargo fleet will more than triple to 750 aircraft from 2022 to 2042, but Boeing declined to comment.
E-commerce companies are seeking capacity directly from airlines, said an executive at Unique Logistics UNQL.PK, a major air cargo carrier.
“We understand that Tem is looking to lease 12 widebody cargo vessels. They are scouring the market for aircraft. We have also received requests for our website,” Unique Air Cargo Mark Schlossberg, executive vice president, told Reuters.
Tem told Reuters in a statement that it is looking for sellers based in the United States and Europe “to reduce shipping distances and delivery times” for shoppers.
Airlines and freight forwarders are also weighing how much capacity to set aside for Mr. Thame and Mr. Shein's business as shipping volumes and prices fluctuate.
Niall van de Woug, chief air cargo officer at air and sea freight benchmarking platform Xeneta, said that although fast fashion brands leave Hong Kong in large volumes, volumes are “significantly reduced when they return”. He said it was causing a “trade imbalance.” Across the Pacific Ocean. ”
The impact of China's emerging e-commerce giants is “game-changing,” Schlossberg said. “They are…emerging as the most important driver in the industry.”
(Reuters)
