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The global air cargo industry is experiencing a significant transformation, largely driven by the innovative direct shipping strategies of Chinese e-commerce powerhouses SHEIN and TEMU. These platforms are revolutionizing air freight by sending products directly from Chinese manufacturing hubs to consumers in Europe and the United States. This streamlined approach is rapidly depleting available air freight capacity, raising alarms about potential shortages and escalating freight costs as the busy year-end shopping season approaches.

E-commerce Titans Redefining Air Freight

SHEIN and TEMU have fundamentally changed the traditional air cargo framework by eliminating multiple logistics intermediaries. Instead of following conventional shipping routes, these platforms send goods straight from Chinese factories to end-users in key markets like Europe and the U.S. This efficient method not only speeds up delivery times but also significantly boosts the volume of air freight needed to satisfy consumer demand.

Rapid Expansion and Consumer Magnetism

The year 2023 has been exceptionally successful for SHEIN and TEMU, particularly within the U.S. market, where their competitively low prices have attracted a large and loyal customer base. According to a survey by Omnisend, 70% of American shoppers engaged with global and Chinese online platforms in 2023. Of these consumers, 57% purchased from TEMU, 43% from SHEIN, and 33% from TikTok. This surge in consumer activity has directly fueled a substantial increase in air freight volumes as these platforms strive to meet the growing appetite for affordable products.

Rising Air Freight Costs and Limited Capacity

The surge in direct shipments from SHEIN and TEMU has heightened competition for available air freight space, driving up shipping costs. Typically, June is a quieter month before the holiday shopping spike. However, in 2023, air freight rates jumped by around 40% year-over-year during this period. Data from Xeneta shows that by late June, the average spot price for air freight from Southern China to the U.S. had reached $5.27 per kilogram, more than double the rates seen in 2019. This sharp increase highlights the strain that rising demand from these e-commerce platforms is placing on air cargo resources.

Strategic Shifts Among Key Players

SHEIN and TEMU’s emphasis on low-cost apparel and home goods is increasingly occupying air cargo space traditionally reserved for high-value items like smartphones and perishable goods. Reports indicate that these two companies alone ship nearly 600,000 parcels to the U.S. daily, necessitating the use of approximately 88 Boeing 777 freighters to manage their global logistics. This shift not only underscores the scale of their operations but also highlights changing priorities within the air freight industry.

Industry Response and Future Projections

In response to the growing demand for air freight capacity, major logistics providers are urging retailers and manufacturers to secure air freight contracts early to avoid missing out during the peak season. Companies like Atlas Air and Korean Air are expanding their flight capacities to meet the increasing needs of Chinese e-commerce platforms. Despite these efforts, air freight capacity remains constrained, and the market is expected to continue facing pressure over the next five to ten years as e-commerce continues to expand.

Rising Competition

Amazon has also entered the direct shipping space, launching a new section on its main website dedicated to products priced under $20, which are shipped directly from China to U.S. consumers. This strategic move is widely seen as a direct response to the competitive threat posed by TEMU and SHEIN. As the year-end shopping season approaches, competition for air freight space is expected to become even more intense, further straining the already limited capacity.

Conclusion

Chinese e-commerce platforms like SHEIN, TEMU, TikTok, and AliExpress are significantly reshaping the global air cargo market, challenging traditional logistics models, and driving changes in air freight dynamics. The ability of the air cargo industry to adapt to these shifts will be crucial in maintaining efficient supply chains and managing costs effectively. As the peak shopping season nears, strategic planning and early contract negotiations will be essential for businesses aiming to navigate this evolving landscape successfully

At Price2B, we stay ahead of these industry trends to provide you with the latest insights and strategies to optimize your logistics and supply chain operations. Understanding the implications of direct shipping models is key to effectively managing the challenges and opportunities presented by the changing air cargo market.