Temu and Shein, between them, are flying some 4,000 to 5,000 tons of goods across the world on a daily basis, seriously impacting available air freight for other businesses. This is due to their difference in operations compared to traditional marketplaces.
Generally, marketplace fulfilment is carried out locally from fulfilment centers located across the UK, Europe, the US and other countries where the marketplaces operate. Other sales are fulfilled direct from merchants. What this means is that the goods are shipping in bulk, often via container ship but Temu and Shein are fulfilling orders from warehouses based in China which means everything is going by air.
Wirthschafts Wosche reports that there are now 600,000 packages shipped daily by Temu and Shein to the US, and 400,000 daily shipments to Germany. While we don’t have numbers, the UK probably receives a similar 6 figure number of daily shipments, and this deluge for air freight parcels is having a bigger impact on global transport that the impact on Red Sea freight from terrorists.
There has to come a time when these two marketplaces open up local fulfilment – indeed Shein has already started to open warehouses in the US and Temu has announced that UK/European/US brands will soon be able to sell direct on their marketplace.
Temu is reported to be looking for a dozen large transport planes to lease and if growth continues, driven by cutting out all the middle men and enabling Chinese manufacturers to sell direct through Temu with no retailers or distributors taking a profit cut, the pressure on air freight won’t let up any time soon.
One can’t help but wonder what would have happened if Temu growth had come a few years earlier when planes were grounded during the Covid pandemic? Reliance on air freight may have advantages in offering low cost goods direct from manufacturer to consumer, but it’s totally dependent on being to fly the goods rather than a sea journey taking weeks, and it’s probably an environmental disaster compared to bulk shipping containers by sea.
