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AAPL: NEW RECORD DHL: BOTTOM FISHINGF: DOWNSIDE RISKAMZN: ANOTHER HIGH WMT: ON A ROLLHON: INVENTORY UNLOCKBA: MORE OF THE SAMEGXO: HAMMEREDMAERSK: BOUNCING BACKDSV: FLIRTING WITH NEW HIGHS AMZN: NEW HIGH IN RECORD MARKETS WMT: RECORD IN RECORD MARKETSDSV: UPGRADEGM: BIG CHINA IMPAIRMENTCHRW: DEFENSIVEKO: GENERATIVE AI VISION
AAPL: NEW RECORD DHL: BOTTOM FISHINGF: DOWNSIDE RISKAMZN: ANOTHER HIGH WMT: ON A ROLLHON: INVENTORY UNLOCKBA: MORE OF THE SAMEGXO: HAMMEREDMAERSK: BOUNCING BACKDSV: FLIRTING WITH NEW HIGHS AMZN: NEW HIGH IN RECORD MARKETS WMT: RECORD IN RECORD MARKETSDSV: UPGRADEGM: BIG CHINA IMPAIRMENTCHRW: DEFENSIVEKO: GENERATIVE AI VISION
The Loadstar has launched a series of reports on the ecommerce sector, which has been driving growth in air cargo. But are there clouds on the horizon that should worry air cargo stakeholders in particular?
“The biggest trend impacting airfreight is not the Red Sea [crisis], it’s Chinese ecommerce,” Bollore’s director of Greater China operations, Basile Ricard, told Reuters earlier this year.
Indeed, the sudden rise of platforms like Shein and Temu, not to mention the entrance of TikTok into online sales, has been wreaking havoc on global supply lines, with small and medium-sized shippers feeling particularly aggrieved.
One logistics manager told The Loadstar the ability of these platforms to book space for orders far larger than most SMEs could, was leaving them unable to compete, and struggling to find capacity.
Part of this is down to the approach these businesses have taken when expanding into foreign markets. The more established ecommerce operators like Amazon and Alibaba sought to develop warehousing capabilities in the markets they sell in – the latter having recently penned a $1.1bn investment deal in South Korea – while TikTok has based its model on striking partnerships with local 3PLs to cover warehousing and fulfilment.
Ditching this traditional model, Shein and Temu did not seem bothered with building local footprints in their target markets, instead favouring a model where they ship direct to customers.
Those questioning the viability of this approach need only look at the numbers. Data from CargoFacts claims Temu was shifting some 4,000 tonnes a day; Shein boasting daily volumes of 5,000 tonnes. The daily figures plummet to just 1,000 tonnes for Alibaba and 800 tonnes for TikTok.
Of course, Chinese ecommerce is no new phenomenon, Alibaba established itself nigh on a decade ago. But it has taken Shein and Temu less than a year to be moving four and five times as much as the Chinese legacy outfit, growth driven by a sudden explosion in demand for “fast fashion”. Shein is responsible for 20% of all global fast fashion sales, with many linking this to surging new user numbers on TikTok – the app being both a social media and ecommerce platform – and the preponderance of influencer culture pushing new outfits daily.
Nia Hudson, research analyst at Transport Intelligence, suggested that, if one wanted to argue in favour of Chinese ecommerce models, they could point to their “sheer innovation, particularly when it comes to things like embracing a mobile-first and social commerce strategy”.
However, sources in South Korea told local outlets that, without massive state intervention – including access to cheap Chinese airfreight capacity and questionable labour practices – the likes of Shein and Temu would not be able to take such an aggressive approach. Furthermore, western regulators have increased their scrutiny of Chinese business practices – particularly those pertaining to civilian data.
This week, US legislators will vote to force the hand of Bytedance (TikTok’s parent) to either sell the platform – which saw a 16% increase in new users last year and is looming close to 2bn worldwide – or face a ban.
Ms Hudson, though, believes the situation in Europe and the US should not be read as sympatico. She cited research – “admittedly commissioned by Alibaba” – that revealed that, “across 27 European countries, sales to China via Alibaba Group’s platforms totalled about €32.3bn ($34.46bn) in 2022 – up a third since 2019”.
These figures have, purportedly, influenced some of the discussions swirling around efforts to regulate the platforms, with Ms Hudson noting that, given the current economic challenges, it was entirely plausible that “some countries in the west may not want to stifle ecommerce trade with China”.
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