The rapid rise of fast-fashion e-commerce retailers such as Shein and Temu is upending the global air cargo industry, as they increasingly vie for limited air-cargo space to woo consumers with rapid delivery times, industry sources say.
Shein, PDD Group’s Temu and ByteDance’s TikTok Shop, which recently launched online shopping in the U.S., ship the majority of their products directly from factories in China to shoppers by air in individually addressed packages.
Shein and Temu together send almost 600,000 packages to the United States every day, according to a June 2023 report by the U.S. Congress, and their growing popularity is boosting air-freight costs from Asian hubs like Guangzhou and Hong Kong, making off-peak seasons almost disappear and causing capacity shortages, the sources said.
“The biggest trend impacting air freight right now is not the Red Sea, it’s Chinese e-commerce companies like Shein or Temu,” said Basile Ricard, director of Greater China operations at freight forwarder Bollore Logistics.
According to data aggregated by Cargo Facts Consulting, Temu ships around 4,000 tonnes a day, Shein 5,000 tonnes, Alibaba.com 1,000 tonnes and TikTok 800 tonnes. That equates to around 108 Boeing 777 freighters a day, the consultancy said.
Driven by robust demand for their low-priced apparel — like $10 Cdn tops and $5 biker shorts — Shein alone accounts for one-fifth of the global fast-fashion market, measured by sales, and has fuelled growth of China’s e-commerce industry, according to Coresight Research.
CBC News has reached out to Shein and Temu for comment.
The fast-fashion online retailer Shein is growing rapidly and experts say it could eventually rival Amazon. But as its profit margins grow — so do the environmental concerns.
Fast fashion now accounts for half of China’s total cross-border e-commerce shipments and takes up about one-third of global long-distance cargo aircraft, according to cross-border transportation media firm Baixiao.com.
Shein and Temu’s growth is squeezing out space for other industries on air freighters, just as global firms are scrambling to find alternative logistics options due to disruptions in the Red Sea.
The crisis emerged when Yemen’s Houthi militia group began attacking shipping vessels in the Red Sea, forcing companies to reroute around the Suez Canal, one of the world’s most important shipping lanes.
“When the Suez Canal [crisis] hit, there was no capacity to be bought, because e-commerce has bought it all,” said an executive at an air cargo carrier who requested anonymity due to industry sensitivities.
Shein and Temu together send almost 600,000 packages to the U.S. every day, according to a June 2023 report by the U.S. Congress. (Yuichi Yamazaki/AFP/Getty Images)
Pronounced demand for air freight from fast fashion started increasing dramatically in the second half of last year, several sources said.
A German logistics source said large tech firms like Apple only transport about 900 tonnes maximum a day and the growing cargo demand from fast fashion could push out traditional long-term customers, as they vie for limited air capacity.
Some air-freight carriers have responded to the increased e-commerce demand by providing additional charter capacity, “which is already heavily booked for the long term,” said a spokesperson for German logistics firm Schenker.
Apple declined to comment. TikTok Shop did not return messages seeking comment.
“Shein is continually optimizing its efforts to ensure the best customer experience and fulfilment efficiency,” a Shein spokesperson said, declining to elaborate.
The hunt for capacity
The sudden spike in demand from fast fashion that began last year has lifted air-cargo rates from China and is raising concerns about longer-term capacity shortage.
“Based on what we have seen, this model of [airborne] e-commerce is not sustainable, neither from a profit or environmental standpoint,” said Guillermo Ochovo, director at Cargo Facts Consulting.
He said both Shein and Temu are now looking more at sea freight due to the high cost of air freight and considering opening warehouses outside of China to shorten transport times to other regions.
A user opens the Temu app to a Victoria Day promotion on May 19, 2023. (Aloysius Wong/CBC)
In its 2023 commercial market outlook, Boeing estimated China’s air cargo fleet would more than triple to 750 aircraft between 2022 and 2042. Boeing declined to comment.
E-commerce firms are approaching airlines directly to secure more capacity, according to the executive at a major air cargo carrier and Unique Logistics.
Shein has started sending goods to U.S. warehouses to speed up shipping times. Temu told Reuters in a statement that it is looking for sellers based in the U.S. and Europe “to reduce shipping distances and delivery times” to shoppers.
Airlines and freight forwarders are also contemplating how much capacity to set aside for Temu and Shein’s business as shipments and prices fluctuate.
The impact of China’s new e-commerce giants is “game-changing,” said Marc Schlossberg, executive vice-president of Air Freight at Unique. “They … are emerging as the most important drivers in the industry.”
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
