Shein Becoming a Bigger Player in Ocean Freight
Shein is ocean freighting more goods into the U.S. for storage in on-shore warehouses, according to Reuters.
Citing data provided by ImportGenius, Reuters found that the ultra-fast-fashion company shipped 312,385 pounds of goods into the U.S. using container ships in 2021. That number is up to 6.8 million pounds so far this year, according to Friday’s report. Before 2020, Shein didn’t ocean freight any apparel, according to the data.
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The move aligns with Shein’s recent efforts to get closer to customers. The company has invested in localized production in Brazil and other nearshoring strategies. Storing goods on American shores benefits end-customer shipping times. The company’s standard shipping is nine to 12 business days, 77.1 percent delivered in less than 10 days.
Sourcing Journal reached out to Shein for comment.
“Virtually all” of the shipments ocean freighted into the U.S. came from China, where Singapore-headquartered Shein relies on a network of suppliers across 6,000 factories to produce quick-turn merchandise and ship to 150 markets worldwide.
The ImportGenius data didn’t provide detailed descriptions for Shein products imported on container ships. The company collects this data for shipments entering the country by ocean from the U.S. Department of Homeland Security.
Shein still air freights most of its merchandise directly to consumers in individual packages. These shipments often qualify under the de minimis trade provision, exempting packages valued at $800 or less from tariffs as long as they’re addressed and shipped to individuals.
U.S. lawmakers have said that the loophole gives companies like Shein and rival Temu an unfair leg up in trade. They’ve reintroduced a bill aimed at preventing businesses operating out of China and Russia from using the provision.
In a June report, a U.S. House of Representatives committee estimated that Shein and Temu combined bring in nearly 600,000 packages daily under the de minimis exemption.
Shein, which is said to be looking to acquire bankrupt U.K.-based fast-fashion retailer Missguided’s intellectual property, operates a warehouse in Whitestown, Ind., where inventory ships to customers in four to seven business days.
The Indiana fulfillment center that was completed last year is Shein’s largest in the U.S. The company is expanding the facility to grow its capacity. Shein also has a second warehouse in Los Angeles, where its U.S. headquarters is located.
Shein has largely been tight-lipped about its U.S. warehouse investments. The former Rolling Stones collaborator is expected to open a Cherry Valley, Calif. facility before the end of this year. Another in the Northeast is set to follow.
And while the company has never confirmed it, Reuters also reported in May that Shein is exploring plans to build a factory in Mexico to localization apparel production and shorten delivery times.
In November, Gen Z’s favorite fashion brand opened a 170,000-square-foot office and warehouse in the greater Toronto area, which the retailer said will cut shipping times for Canadian customers while reducing the number of packages in the shipping pipeline.
Latin America is drawing much of Shein’s attention. After launching new marketplaces in the U.S. and Brazil, Shein is investing $150 million across 2,000 local factories in Brazil, providing manufacturers with training to convert their traditional production models to the digital player’s on-demand production model.
Shein, which said in July that it turned its highest-ever profit in the first half, has long been the subject of IPO speculation after multiple reported go-public attempts that ended up getting shelved.
Reuters reported in June that Shein filed confidentially with the U.S. Securities and Exchange Commission regarding plans to trade on the New York Stock Exchange, but a Shein spokesperson denied the report to Sourcing Journal at the time.
After raising $2 billion in May, the e-tailer once valued at $100 billion is now worth about $66 billion, according to the Wall Street Journal.
