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Temu and Shein, two major players in the Chinese e-commerce industry, have been shipping large amounts of cargo to various markets worldwide through airfreight.

This surge in demand has resulted in limited capacity for other customers and increased prices in the airfreight industry.

Impact of Temu, Shein's Airfreight Dominance on Global Shipping Costs

According to research from Cargo Facts Consulting in February, Temu and Shein managed to ship an impressive 9,000 tons of cargo worldwide every day. To put it in perspective, that's roughly equivalent to filling up 88 Boeing 777 freighters to their maximum capacity, according to Reuters' report in February.

Temu specializes in selling clothing and housewares, while Shein, originally a fast-fashion retailer, has expanded its offerings to include consumer electronics and kitchen items, with a focus on Chinese brands.

The presence of Temu and Shein is negatively impacting local retailers in the countries they are expanding into, including Australia. As per a report by ChannelNews, Temu is experiencing a significant rise in popularity in Australia.

During Black Friday, the Chinese online giant managed to ship millions of dollars worth of goods. What sets them apart is their incredibly low prices, which make the so-called discount pricing at stores like Drummond Golf or Kogan seem like a joke. Not only are their prices ridiculously cheap, but the quality of their goods is also excellent.

According to recent data, Temu has gained a significant number of customers in Australia and the US. In December of last year, it was estimated that Temu had over 1.5 million customers in Australia.

Additionally, by the end of October 2023, Temu had built a user base of 48.2 million monthly average users in the US.

Global Retailers Turn to Sea Cargo Amid Skyrocketing Airfreight Costs

Amid rising airfreight costs, global retailers are increasingly relying on cargo ships to procure their merchandise. However, even these prices are on the rise.

This increase is due to the significant rise in shipping costs caused by ongoing issues in the Red Sea, where ships are being targeted by the Houthis.

Additionally, the cost of 40-foot containers has been skyrocketing. Sea cargo rates continue to offer a significantly more affordable option for shipping goods compared to air transportation.

In the era of online retailing, the dominance of industry giants such as Amazon has reshaped consumer expectations.

The pandemic has further solidified the demand for fast and efficient delivery, with next-day service now being the norm rather than a luxury.

Many businesses have had to adapt to the significant changes brought about by this shift. However, some companies are experiencing longer wait times for deliveries and increased shipping costs for items originating from China, Inc. reported.