Millions of packages per day: Chinese cheap goods clog cargo planes

Million packages – per day
Cheap Chinese goods clog cargo planes

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Temu and Shein fly out thousands of tons of goods every day. Even Apple can’t keep up. Other companies have to fight for freight space due to the volume – this drives up prices. For some, the parcel glut is now more consequential than the Houthis’ attacks on cargo ships in the Red Sea.

The rapid growth of the Chinese companies Temu and Shein is not only flooding the European and US markets with cheap clothes. It is now causing bottlenecks in global air transport and driving freight rates to record highs. “Demand from China was still very weak in mid-2023, but from the end of the year it suddenly increased massively,” says a German logistics expert. “It turned out there were two companies behind it: Temu and Shein.” The planes would hardly be able to accommodate additional quantities if the companies wanted to transport some goods by plane because of the Houthi attacks on ships in the Red Sea.

“The biggest trend affecting air freight is not the Red Sea, it is Chinese e-commerce companies like Shein and Temu,” says Basile Ricard, responsible for the China business at Bollore Logistics. With shirts and pants for a few euros, but also with household goods and toys, the companies have created a strong position for themselves in the Internet business. According to market observers such as Coresight Research, Shein alone controls around a fifth of the global fast fashion market. Shein and Temu together ship 600,000 packages to America every day, according to a June 2023 US Congress report. In Germany the number is now estimated at around 400,000 per day.

Safety concerns with many products

Since all goods arrive within a few days directly after ordering, this has serious consequences for air freight. According to data from industry experts, Shein and Temu each fly out 4,000 to 5,000 tons of goods every day. In other words: over a hundred Boeing 777 freighters have to take off every day just for this purpose. For comparison: Large tech companies like Apple only manage 1,000 tons per day. According to industry sources, they are already having to fight for cargo space on the planes. Apple declined to comment when asked.

Shein and Temu’s strategy seems clear: both companies deliver directly from China and have the goods delivered to your home in Berlin, New York or Rio de Janeiro. There are no middlemen, nor are there logistics centers or warehouses. Shirts, toasters or toys that are returned will be destroyed. Some of the apps are designed like games that are intended to encourage new purchases. Data protection advocates consider them questionable. But consumer advocates also warn against many products due to safety concerns.

Goods are packed below the customs limit

The goods are also cheap because the companies make sure to pack everything below the respective customs borders of the countries. “A pen for Brazil was broken down into four parts and packaged individually,” says a logistics expert. In order to avoid the comparatively strict Chinese regulations for exports of electrical products, the goods are now transported to Vietnam by truck and then flown out from Hanoi. Even Thailand was a target because many passenger aircraft there still had cargo capacity in their belly and the air freight rates were correspondingly lower.

In addition, the companies are now trying to procure aircraft themselves: “We heard that Temu is looking for twelve large transporters to lease. They are searching the market for every aircraft they can get. We even received an inquiry directly on our website “, reports Marc Schlossberg, Vice-President at the air freight transport company Unique Logistics. Temu explained that they are looking for intermediaries in the USA and Europe to shorten transport routes and delivery times. Shein has already started using warehouses in the US. “Shein is constantly working to improve and become more efficient for customers,” the company said.

However, logisticians do not expect the freight boom from China to subside quickly. Although some freight lines have expanded their capacities, these are also already booked for the long term, says a Schenker spokesman. “We expect strong demand to continue in the coming months.”

However, what should actually bring joy in the industry is also viewed critically. It is uncertain whether the business with Temu and Shein will be permanent, says the Asia manager of a logistics company. There is a risk that customers who have been reliable for years will now be pushed out. “And in terms of environmental friendliness and sustainability, the deal with Temu and Shein is a disaster anyway.”

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