NEW YORK/SHANGHAI. The rapid rise of fast-fashion e-commerce retailers such as Shein and Temu is upending the global air cargo industry, as they increasingly vie for limited air-cargo space to woo consumers with rapid transit times, more than ten industry sources said.
“Shein is continually optimizing its efforts to ensure the best customer experience and fulfillment efficiency,” a Shein spokesperson said, declining to elaborate.
THE HUNT FOR CAPACITY
The sudden spike in demand from fast fashion that began last year has lifted air-cargo rates from China and is raising concerns about longer-term capacity shortage.
“Based on what we have seen, this model of (airborne) e-commerce is not sustainable, neither from a profit or environmental standpoint,” said Guillermo Ochovo, director at Cargo Facts Consulting.
He said both Shein and Temu are now looking more at sea freight due to the high cost of air freight and considering opening warehouses outside of China to shorten transport times to other regions.
Shein has started sending goods to U.S. warehouses to speed up shipping times.
According to Baixiao founder Wang Yongqiang, in a presentation to a Boeing air cargo forum in China in December, supply growth of long-distance freighters cannot keep up with the growth of cross-border e-commerce.
In its 2023 commercial market outlook, Boeing estimated China’s air cargo fleet would more than triple to 750 aircraft between 2022 and 2042. Boeing declined to comment.
E-commerce firms are trying airlines directly to secure more capacity, according to the executive at a major air cargo carrier and Unique Logistics.
“Temu, we understand, is looking to lease 12 wide-body freighters. They are scouring the market for any aircraft they can find. We even received a request to our website,” Marc Schlossberg, executive vice president of Air Freight at Unique, told Reuters.
Temu told Reuters in a statement that it is looking for sellers based in the U.S. and Europe “to reduce shipping distances and delivery times” to shoppers.
Airlines and freight forwarders are also contemplating how much capacity to set aside for Temu and Shein’s business as shipments and prices fluctuate.
Niall van de Wouw, chief air freight officer for air and ocean freight rate benchmarking platform Xeneta, said fast- fashion brands are causing a “trade imbalance” with large amounts of cargo leaving Hong Kong but merchandise volumes being “much lower on the journey back across the Pacific.”
The impact of China’s new e-commerce giants is “game-changing,” said Schlossberg. “They … are emerging as the most important drivers in the industry.”
This story was first published by Reuters.
Paraluman P. Funtanilla
Paraluman P. Funtanilla is Tutubi News Magazine's Marketing Specialist and is a Contributing Editor. She finished her degree in Communication Arts in De La Salle Lipa. She has worked as a Digital Marketer for start-up businesses and small business spaces for the past two years. She has earned certificates from Coursera on Brand Management: Aligning Business Brand and Behavior and Viral Marketing and How to Craft Contagious Content. She also worked with Asia Express Romania TV Show.
