What: International logistics costs are driven up by the success of fast fashion in the Western world.

Why it is important: For department stores, the news is important for two reasons: there is a disconnection between customers’ demands for sustainability and appetite for fast fashion, and logistic costs being up again is not exactly good news.

The booming demand for fast fashion and e-commerce goods from Chinese brands like Temu and Shein is driving up air freight rates, creating intense competition among logistics companies for Asia-West shipping routes. This trend emerged during the pandemic and has continued, with e-commerce platforms often paying nearly double the rates of general cargo to meet rapid delivery schedules.

While air freight rates are rising, especially on transpacific routes, sea freight rates have fallen significantly post-pandemic. E-commerce goods now account for a substantial portion of air freight volume, leading to a shift in the logistics industry's focus.

The surge in demand is limiting traditional customers' negotiation power for lower rates in China. Cargo carriers are responding by reallocating resources and expanding e-commerce capabilities. However, there are concerns about the impact of fluctuating China-US trade relations on this sector. Despite potential challenges, the outlook for the air freight market remains strong due to sustained e-commerce and fast fashion demand.

West’s love for Shein and Temu drives ecommerce boom for air freighters