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, PDD Group's Temu and ByteDance's TikTok Shop, which recently began online shopping in the U.S., ship the majority of their products directly from factories in China to shoppers by air in individually addressed packages. And their growing popularity - Shein and Temu together send almost 600,000 packages to the United States every day, according to a June 2023 report by the U.S. Congress - is boosting air-freight costs from Asian hubs like Guangzhou and Hong Kong, making off-peak seasons almost disappear and causing capacity shortages, the sources said. "The biggest trend impacting air freight right now is not the Red Sea, it's Chinese e-commerce companies like Shein or Temu," said Basile Ricard, director of Greater China operations at freight forwarder Bollore Logistics. According to data aggregated by Cargo Facts Consulting, Temu ships around 4,000 tonnes a day, Shein 5,000 tonnes, Alibaba.com 1,000 tonnes and TikTok 800 tonnes. That equates to around 108 Boeing 777 freighters a day, the consultancy said. Driven by robust demand for their low-priced apparel like $10 tops and $5 biker shorts, Shein alone accounts for one-fifth of the global fast-fashion market, measured by sales, and has fueled growth of China's e-commerce industry, according to Coresight Research. Fast fashion now accounts for half of China's total cross-border e-commerce shipments and takes up about one-third of global long-distance cargo aircraft, according to cross-border transportation media firm Baixiao.com. Shein and Temu's growth is squeezing out space for other industries on air freighters, just as global firms are scrambling to find alternative logistics options due to the Red Sea disruptions. "When the Suez Canal (crisis) hit, there was no capacity to be bought, because e-commerce has bought it all," said an executive at an air cargo carrier, who requested anonymity due to industry sensitivities. Pronounced demand for air freight from fast fashion started increasing dramatically in the second half of last year, several sources said. A German logistics source said even large tech firms like Apple transport only 1,000 tons maximum a day and the growing cargo demand from fast fashion could push out traditional long-term customers, as they vie for limited air capacity.
