Shein and Temu’s Impact on US Logistics Networks

The rise of ultra-fast fashion and discount marketplace apps has changed how Americans shop, but the consequences extend far beyond full closets. Shein and Temu have fundamentally altered global air freight dynamics. Their model of shipping individual packages directly from factories in China to doorsteps in the United States is creating a bottleneck in air cargo capacity, driving up prices, and straining logistics infrastructure.

The Scale of the Surge

To understand the impact on US logistics, you have to look at the sheer volume of goods moving through the sky. Unlike traditional retailers that ship bulk containers via ocean freight to US warehouses, Shein and Temu rely almost exclusively on air cargo to maintain their speed.

Recent industry data suggests that Shein and Temu combined send approximately 600,000 to 1 million packages to the United States every single day. In terms of weight, logistics consultants estimate these two companies alone account for nearly 9,000 tons of cargo daily worldwide. This volume is roughly equivalent to 88 Boeing 777 freighters filled to capacity every single day.

This massive demand creates a shortage of space for other industries. When tech giants like Apple prepare to launch a new iPhone, or when pharmaceutical companies need to move sensitive medicine, they are now competing for cargo space against $5 t-shirts and $2 kitchen gadgets.

How the "Direct-to-Consumer" Model Breaks the Mold

The traditional logistics model for companies like Walmart, Target, or Gap involves long lead times. These retailers order massive quantities of goods months in advance. These goods travel slowly across the Pacific Ocean on container ships, arrive at ports like Long Beach or Los Angeles, and are trucked to distribution centers.

Shein and Temu operate differently:

On-Demand Production: They produce small batches of items and only ramp up production if an item sells well.
Individual Shipping: Once a US customer places an order, the item is often packaged in China and flown directly to a US cargo hub.
Speed Requirement: Because customers expect delivery in 10 to 14 days, ocean freight is too slow. Air freight is the only option.

This reliance on air transport has spiked demand at key exit points in Southern China, specifically Hong Kong and Guangzhou. As a result, air freight rates from Asia to North America have remained elevated even during typically slow seasons.

The "De Minimis" Loophole Explained

A major factor fueling this logistics clog is a US trade provision known as the “de minimis” rule. Under Section 321 of the Tariff Act of 1930, individual packages imported into the US are exempt from tariffs and undergo less rigorous customs inspection if they are valued under $800.

Because Shein and Temu ship individual orders directly to consumers, the vast majority of their shipments fall under this $800 threshold. This allows them to avoid the steep import taxes that traditional US retailers must pay when importing bulk containers.

However, this loophole creates a massive headache for US Customs and Border Protection (CBP). Customs facilities at major hubs like Los Angeles International Airport (LAX) and John F. Kennedy International Airport (JFK) are overwhelmed by the millions of small packages that need processing. Instead of inspecting one container with 50,000 shirts, agents must technically account for 50,000 individual packages. This volume slows down the clearance process for all cargo moving into the country.

Impact on Freight Prices and Availability

The aggressive consumption of air cargo space by these e-commerce giants has established a “floor” for air freight pricing. In the past, air cargo rates would dip significantly during the summer months before rising for the holiday peak season. Now, the constant flow of e-commerce parcels keeps prices high year-round.

For example, spot rates for air cargo from China to the US have frequently hovered around $5 to $6 per kilogram, prices usually reserved for peak shipping times. This creates a financial burden for other shippers. Exporters of perishable goods, such as cherries from Washington state or seafood from New England, struggle to find affordable space to fly their products to Asian markets because the return planes are fully booked or too expensive.

The Response from Logistics Carriers

Major carriers and freight forwarders are adjusting their strategies to handle this influx. Atlas Air, UPS, and FedEx have seen their networks heavily utilized by this cross-border e-commerce trade. Some freight forwarders are even chartering planes specifically to handle Shein and Temu volumes to prevent their regular clients’ cargo from being bumped.

However, relying on this business is risky for logistics companies. If the US government decides to close the de minimis loophole or if consumer spending slows, the volume could evaporate overnight. Additionally, there are environmental concerns. Flying cheap goods is carbon-intensive. The logistics industry is under increasing pressure to reduce emissions, yet the business model of fast fashion relies on the most polluting form of transport.

Frequently Asked Questions

Why don’t Shein and Temu use ships like other retailers? Ocean freight takes 30 to 45 days. The business model for Shein and Temu relies on quickly reacting to trends and getting products to customers within two weeks. Ocean shipping is too slow for their on-demand inventory strategy.

What is the “de minimis” rule? The de minimis rule allows packages valued under $800 to enter the United States duty-free and with minimal inspection. This was originally intended for souvenirs or small gifts, but e-commerce giants use it to import billions of dollars in merchandise tax-free.

How does this affect American shoppers who don’t buy from these apps? It can lead to higher prices for other goods. When companies like Apple or medical suppliers have to pay more for shipping due to limited capacity, those costs are often passed down to the consumer. It can also lead to shipping delays for other international packages caught in the customs backlog.

Are US lawmakers trying to stop this? Yes. There is bipartisan support in Congress to alter the de minimis rule. Proposals include lowering the threshold from $800 to a much lower amount or banning certain countries from using the exemption entirely. This would force Shein and Temu to change their logistics strategy significantly.