As Air Cargo Demand Rises, Shein and Temu Put Upward Pressure on Rates

Air cargo demand soared in May, seeing its highest year-over-growth since January as global e-commerce giants like Shein and Temu bolster freight volumes and spark an industrywide battle for cargo capacity.

According to the International Air Transport Association (IATA), cargo tonne-kilometers (CTKs), rose by 14.7 percent in May, marking the sixth consecutive month of double-digit year-over-year growth in the metric.

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Air cargo demand on international routes had an even bigger year-over-year jump at 15.5 percent, with flights out of Africa leading the way at an 18.2 percent increase and those originating from the Asia Pacific region coming right behind at 18.1 percent.

The Asia Pacific boost is impressive when accounting for the fact that it has the largest global share of outgoing cargo demand, at 29.8 percent. Shein and Temu, both of which are headquartered in the region and operate factories out of China, are likely pulling plenty of the weight in the increasing movement of product via air.

Temu and Shein combined ship around 9,000 tons of cargo worldwide every day, while Alibaba ships 1,000 metric tons daily and TikTok airs 800 metric tons per day, according to February research from Cargo Facts Consulting.

When combining all four online businesses, the amount shipped would fill 108 Boeing 777 freighters a day, the consultancy said. By comparison, Amazon has a fleet size of 93 aircraft as of June 30, according to data from Planespotters.

The air freight competition out of China could get even more fierce if Amazon has anything to say about it. According to various reports from the end of June, the tech titan is debuting a new marketplace that will enable Chinese merchants to ship discounted, unbranded merchandise across fashion and home goods directly to U.S. customers. The reported move appears to take a direct shot at Temu and Shein, with the inventory sold expected to cost less than $20 per item.

As a result of the constant competition, air freight rates are continuing to rise worldwide, and heavily out of the Asia Pacific region. According to weekly data from WorldACD, which calculates rates based on more than 450,000 transactions per week, rates have increased 9 percent from the year prior to $2.54 per kilogram of cargo, from $2.31 in 2023’s Week 25.

For flights originating in the Asia Pacific, rates have escalated 19 percent over 2023. And when comparing the past two weeks with the preceding two weeks before that, rates from the Asia Pacific region to North America jumped 3 percent—yet another indicator of a hastened rush to fly products over the Pacific Ocean, particularly ahead of the peak shipping season as back-to-school shopping begins.