The meteoric rise of fast-fashion giants such as Shein and Temu is significantly reshaping the dynamics of the global air cargo industry.
With their aggressive push for rapid delivery times, these e-commerce behemoths are commanding an ever-increasing share of air-cargo space, directly from factories in China to consumers' doorsteps, predominantly in individually addressed packages. This surge in demand is manifesting in escalated air-freight costs from key Asian hubs and a blurring of traditional off-peak seasons, leading to notable capacity constraints.
According to industry insiders, the combined might of Shein and Temu sees almost 600,000 packages daily dispatched to the United States alone, a testament to their burgeoning popularity and the resultant strain on air freight resources, as reported by Reuters. Basile Ricard of Bollore Logistics highlighted the significant impact of these companies on the air freight sector, eclipsing even geopolitical tensions like the Red Sea crisis in terms of immediate influence on cargo dynamics.
Data from Cargo Facts Consulting underscores the scale of this phenomenon, with daily shipments from Temu and Shein amounting to approximately 4,000 and 5,000 tonnes respectively. This level of activity equates to the capacity of around 108 Boeing 777 freighters each day, underscoring the vast logistical operations underpinning the fast-fashion industry's supply chain.
The allure of low-priced apparel is driving robust demand for Shein and Temu's offerings, propelling Shein to command a significant share of the global fast-fashion market. This trend is not only fueling the growth of China's e-commerce sector but also accounting for a substantial portion of the world's long-distance cargo aircraft utilization.
The ripple effects of this demand surge are being felt across various sectors, with industries scrambling for alternative logistics solutions, especially in the wake of disruptions like the Suez Canal crisis. The fast-fashion sector's insatiable appetite for air freight began escalating dramatically in the latter half of the previous year, prompting concerns among traditional long-term customers about being edged out due to the fierce competition for limited air cargo capacity.
In response to this burgeoning demand, some air-freight carriers are extending additional charter capacities, although these are quickly being snapped up on long-term bookings. Amidst rising air-cargo rates from China and looming concerns over sustainable capacity, both Shein and Temu are exploring alternatives like sea freight and establishing warehouses outside China to mitigate transport times and costs.
Boeing's projection of China's air cargo fleet expansion indicates a significant growth trajectory, yet the pace of cross-border e-commerce growth poses challenges in matching supply with demand. E-commerce firms are increasingly engaging airlines directly to secure more capacity, with Temu reportedly in the market to lease wide-body freighters to bolster its logistics capabilities.
The fast-fashion sector's impact on the air cargo industry is profound, introducing a trade imbalance characterized by high outbound cargo volumes from Hong Kong against significantly lower inbound flows. This paradigm shift, driven by the rapid ascent of e-commerce platforms like Shein and Temu, heralds a new era in the air freight sector, with these entities emerging as pivotal drivers of industry trends and dynamics.
