- China eased COVID restrictions Wednesday following protests and economic pain from lockdowns.
- More flights to and from China could make sending packages from China to the US faster and cheaper.
China’s travel rule relaxation means more space for cargo on passenger planes — and a big boost for Chinese retailers like Shein, reports Business Insider.
Travel is poised to rebound
China’s move to ease COVID restrictions is garnering cheers from the e-commerce industry.
As the country gradually rolls back quarantine and testing requirements, travel is poised to rebound. More passenger flights means more cargo capacity, which adds up to cheaper, faster shipping for Chinese e-commerce companies like Shein and Alibaba and the US logistics companies helping them take a bite out of the American market.
Air cargo costs skyrocket
Though there are plenty of dedicated cargo flights in and out of China, more than half of air cargo worldwide travels in the belly of passenger planes. Without regular passenger flights, the price to move cargo via plane in and out of China has been sky-high. The fall has started though, and experts expect rates to keep going down.
Gap is one retailer already enjoying easing of air freight rates. The retailer told investors on its November 17 earnings call that falling air freight rates boosted its profit margins — and it expects the benefits to continue as rates fall even more next year.
Chinese online retailers stand to benefit even more, said Brian Bourke, chief commercial officer of Seko Logistics, a freight forwarding company that manages transportation for Shein, among other US and Chinese e-commerce giants.
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Source: Business Insider