How the rise of Temu and Shein created a logistical nightmare for the air freight industry

Summary

Post-pandemic shopping habits have led to a surge in ultra-fast fashion apps like Shein and Timo, driving major growth in e-commerce, particularly among younger, budget-conscious consumers. This boom has significantly impacted the air cargo industry, with Shein and Timo together sending nearly 600,000 packages daily to the US. The rise in demand for cheap, fast fashion is causing air cargo capacity shortages, and experts predict a future surge in e-commerce deliveries. While some companies expand to meet demand, the environmental costs of this growth are becoming a growing concern for advocates of sustainable fashion.

Takeaways

• 😀 Ultra-fast fashion apps like Shein and Temu have become dominant players in e-commerce, especially among younger, budget-conscious consumers.
• 😀 The rise of Shein and Temu has created significant turbulence in the air cargo industry due to the increasing volume of their shipments.
• 😀 Shein and Temu, primarily offering affordable clothing and goods from China, have seen a massive spike in shipping volume over the past two years.
• 😀 A 2023 US Congress report revealed that Shein and Temu combined send nearly 600,000 packages to the US every day.
• 😀 The International Air Transport Association (IATA) warns of a potential e-commerce growth 'tsunami' in air cargo, with parcels purchased online projected to increase from 20% to 33% by 2027.
• 😀 The air cargo industry is struggling to keep up with the growing volume of shipments from companies like Shein and Temu, leading to capacity issues.
• 😀 Amazon is responding to the surge in delivery demand by leasing its own jets to carry packages.
• 😀 Shein is expanding its warehouse capacity in Canada to better manage the growing shipment volume.
• 😀 The increase in ultra-fast fashion and e-commerce is raising concerns about sustainability, with advocates for slow fashion highlighting environmental impacts.
• 😀 Retail analysts predict that the current high demand for cheap, fast fashion will become the 'new normal' in retail, despite concerns about its sustainability.

Q & A

What is the main factor behind the rapid growth of Ultra Fast Fashion apps like Shein and Timu?

The main factor driving the growth of Ultra Fast Fashion apps like Shein and Timu is the post-pandemic shopping habits, particularly among younger, budget-conscious consumers. These apps offer rock-bottom prices and a wide variety of trendy clothing and goods.

How have Shein and Timu affected the air cargo industry?

The volume of shipments from Shein and Timu has skyrocketed in the past one to two years, taking up a significant portion of air cargo capacity. This surge in demand is causing major disruptions for other industries relying on air freight.

What is the combined volume of packages sent by Shein and Timu to the US every day?

Shein and Timu combined send nearly 600,000 packages to the US every day, according to a 2023 report by the US Congress.

How has the cargo volume changed for the air cargo industry in the past year?

The air cargo industry has seen a 200% increase in cargo carried year-to-date. For example, in the previous year, about 37 million pounds of cargo were carried, while this year it has already surpassed 110 million pounds.

What warning did the International Air Transport Association (IATA) issue regarding air cargo?

The IATA warned of an incoming 'tsunami' of e-commerce growth in air cargo. They predicted that one out of every five parcels currently purchased online will increase to one out of every three by 2027.

How is the air cargo industry responding to the growth in e-commerce demand?

The air cargo industry is expanding its capacity to keep up with the growing demand. For instance, Amazon is leasing its own jets to manage its delivery needs, and Shein is expanding its warehouse capacity in Canada.

What is expected to happen in the air cargo industry due to the surge in demand?

The surge in demand is expected to become the 'new normal.' As a result, analysts predict that the air cargo industry will continue to expand, but it may face sustainability challenges in the long term.

What are the concerns raised by proponents of the slow fashion movement?

Proponents of the slow fashion movement are raising awareness about the environmental impact and other hidden costs associated with ultra-fast fashion, such as its carbon footprint, waste, and exploitation of labor.

What role does China play in the production of goods sold by Shein and Timu?

The goods sold by Shein and Timu are mostly manufactured in China, which is a key factor in the low prices and rapid production timelines that these companies offer.

How might the demand for ultra-fast fashion impact consumer behavior in the future?

The demand for ultra-fast fashion is likely to continue growing, but the increased awareness of its environmental and social impacts might lead to a shift in consumer behavior. Some consumers may choose more sustainable options or be influenced by movements like slow fashion.