The Financial Times article on December 14, original title: The West's love for SHEIN and Temu platforms has driven the e-commerce boom of cargo airlines
The booming demand in Western countries for fast-fashion and e-commerce goods sold on Chinese online platforms such as Temu and Shein has pushed up air freight rates and sparked stiff competition among logistics companies shipping from Asia.
During the pandemic, consumers in the United States and Europe began to buy more goods from Chinese e-commerce platforms, with some orders being delivered within a week. This continued demand has supported air freight rates** and supported logistics companies in an otherwise weak freight market. In some cases, some logistics executives said, some e-commerce platforms are willing to pay nearly twice as much as regular freight customers to ensure they have enough capacity to adhere to strict delivery schedules. Jacob Cook, co-founder and CEO of e-commerce consulting firm WPIC, said, "Consumer behavior has changed......Apps such as temu and shein are the most abundant apps (in the US). And these (the platform's transactions) are all done by air. ”
Air freight and logistics executives say the impact of China's e-commerce boom can be seen in a comparison of air and ocean freight rates. Air freight rates have risen significantly in the second half of 2023, while ocean freight rates have dropped sharply since the disruption caused by the pandemic has been resolved.
This year, the air freight market in South China, in particular, has been relatively strong in recent months, largely driven by strong e-commerce business. Wilson, editor of air freight data provider TAC Index, said e-commerce could account for around 40 to 50 percent of freight traffic on most routes, and in some cases as much as 70 percent.
Chandler Su, head of North Asia freight at France's GEODIS International Group, said platforms such as Temu and Shein, which attract Western customers with cheap fast-fashion designs, have unearthed the "hidden needs" of European and American consumers. "This e-commerce model has also created demand for air cargo, which we have never seen before. He said.
Global cargo airlines are investing more in e-commerce management and reallocating aircraft to meet rising bookings. At the same time, China's e-commerce platforms have expanded their freight services, and some domestic producers are chartering flights to deliver goods.
The growing reliance on Chinese e-commerce has also raised concerns among logistics groups, which are grappling with a worrisome U.S.-China relationship. However, some established freight groups are confident that the demand for e-commerce and fast fashion will continue to provide a driving force.
*: Global Times.