Shein and Temu are creating a shortage in the freight market due to the abundance of orders.
The rapid expansion of Chinese e-commerce, driven by online marketplaces such as Shein and Temu, is fundamentally reshaping the traditional freight industry, according to the vice president of supply chain operations at UPS China.
Singapore-based Shein and Temu, which is owned by China’s PDD Holdings, have locked in a lot of cargo space in advance, creating a shortage in the market and driving up shipping rates, Gu Zhenzhong told Yicai at the seventh China International Import Expo yesterday.
International express delivery and logistics giants such as UPS, FedEx, and DHL participated in the five-day CIIE trade show held in Shanghai, concluded yesterday.
E-commerce now constitutes half of air cargo at YTO Express, a shift that began in the second half of last year, Chen Jiajia, head of air freight at the Shanghai-based company, told Yicai.
According to research from Cargo Facts Consulting, Temu and Shein combined ship around 9,000 tons of cargo worldwide every day, or approximately 88 Boeing 777 freighters filled to the brim.
The vast volume has sent air freight rates through the roof, but the two companies have been willing to subsidize fast shipping as they grow globally.
Ordinary products, not just high-value goods, now require faster delivery times as a result of the growth of e-commerce platforms, noted Poh-Yian Koh, senior vice president at FedEx and president of FedEx China.
Many of these goods are manufactured in China’s smaller, second- and third-tier cities, which has accelerated the company’s expansion into these areas, he said.
Before the pandemic, global courier and logistics giants mainly focused on China’s first-tier cities, with FedEx’s initial four centers for international gateway operations located in Beijing, Shanghai, Guangzhou, and Shenzhen. But FedEx recently established new centers in Qingdao and Xiamen, opening new cargo routes from these cities to the United States.
Source: Yicai Global
