Shein and Temu Are Hoovering Up Air Cargo Capacity

Glenn Taylor
·4 min read

Air cargo capacity for apparel retailers importing merchandise out of China may be in for a bumpy ride in 2024 if e-commerce fashion giants like Shein and Temu have anything to say about it.

Shein ships roughly 5,000 metric tons a day, while Temu is moving about 4,000 metric tons daily, according to data aggregated by Cargo Facts Consulting shared in a Reuters report on Wednesday. Shein and Temu together send almost 600,000 packages to the U.S. every day, or 210 million packages per year, according to a June 2023 report by U.S. Congress.

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But they’re not the only firms with ties to China that are flying goods out at a rapid rate. Another e-commerce giant, Alibaba.com, ships 1,000 metric tons daily, and TikTok airs 800 metric tons per day.

When combining all four online businesses, the amount shipped would fill 108 Boeing 777 freighters a day, the consultancy said.

“There is not enough air cargo capacity during the peak season to meet the demands of the e-commerce players, and they are willing to pay more than the traditional retailers, so I think that the traditional retailers need to understand this and plan accordingly,” said Marc Schlossberg, executive vice president of air freight at freight forwarder Unique Logistics. “There’s not going to be available capacity, in my opinion, from September to November, or early December.”

Schlossberg told Sourcing Journal that retailers looking to compete for air cargo space in the peak season will need to find another way to secure capacity earlier, such as utilizing air freight more frequently over a longer period of time.

In one such instance, Schlossberg recommended one of his larger customers identify three or four markets where they can ship air freight every week.

“Let’s lock into a price of 20 tons a week, every week all year round,” Schlossberg said. “If they buy that space, they own that space, and that won’t change. So at least when the peak season comes, they will have some capacity at a fixed cost that is not going to burn them. They can blend that into the higher costing that comes later.”

Shein and Temu, where shoppers can find dresses for under $10 and jackets for under $20, ship low-cost apparel directly to U.S. addresses via air freight, presumably to get around the oft-criticized de minimis provision that exempts packages valued at less than $800 from tariffs. Members of Congress have been critical of the provision, calling for reform based on unfair trade advantages for Chinese and other foreign businesses.

A recent DHL report from February seemed to back up the brewing sentiment that companies like Shein and Temu will continue to dominate air freight, saying that in the second quarter, “Chinese e-commerce fast-fashion companies are set to play a pivotal role in the global air cargo industry.”

On top of that, the timing is concurrent with an expected slowdown in the wider air cargo market after the conclusion of Lunar New Year, the logistics giant said—effectively giving the e-commerce companies more overall share of capacity in the period.

The DHL report highlighted what it called “strong” growth in air cargo traffic from China to kick off 2024, as shippers rushed to get goods shipped before the Lunar New Year period starting in early February.

“Overall capacity was tight with increased rates prior [to] LNY, driven by strong rise in demand and network disruptions,” the DHL report said. “Both demand and rates are expected to stabilize in second half of February.”

But according to Schlossberg, despite how the market dynamics of air freight shifted during the pandemic, many retailers simply haven’t caught up to the impact of companies like Shein, Temu and TikTok across the transportation mode.

Although 2023 was the first year of the post-pandemic era where freight rates had started to normalize, with cargo yields dipping 32 percent from year-prior levels, according to the International Air Transport Association (IATA), Schlossberg pointed out that even that wasn’t a normal year as more retailers were busy offloading excess inventory from 2022.

“You had an inventory overhang and air freight demand levels in the first half of 2023 were historically low—their lowest level since 2016,” Schlossberg said. “However, you had the e-commerce players quietly in the background filling up all the demand. Fast forward to the peak season, and now all of a sudden inventory levels had right-sized, mall players were starting to ship and there was no capacity to be had.”