(Yicai) Nov. 11 -- The rapid expansion of Chinese e-commerce, driven by online marketplaces such as Shein and Temu, is fundamentally reshaping the traditional freight industry, according to the vice president of supply chain operations at UPS China.

Singapore-based Shein and Temu, which is owned by China’s PDD Holdings, have locked in a lot of cargo space in advance, creating a shortage in the market and driving up shipping rates, Gu Zhenzhong told Yicai at the seventh China International Import Expo yesterday.

International express delivery and logistics giants such as UPS, FedEx, and DHL participated in the five-day CIIE trade show held in Shanghai, concluded yesterday.

E-commerce now constitutes half of air cargo at YTO Express, a shift that began in the second half of last year, Chen Jiajia, head of air freight at the Shanghai-based company, told Yicai.

Ordinary products, not just high-value goods, now require faster delivery times as a result of the growth of e-commerce platforms, noted Poh-Yian Koh, senior vice president at FedEx and president of FedEx China.

Many of these goods are manufactured in China’s smaller, second- and third-tier cities, which has accelerated the company’s expansion into these areas, he said.

Before the pandemic, global courier and logistics giants mainly focused on China’s first-tier cities, with FedEx’s initial four centers for international gateway operations located in Beijing, Shanghai, Guangzhou, and Shenzhen. But FedEx recently established new centers in Qingdao and Xiamen, opening new cargo routes from these cities to the United States.

Last month, FedEx announced the upgrade of its international express and cargo hub in Shanghai to an intercontinental transit hub, expanding routes that connect Shanghai with second- and third-tier cities across China.

Another strategic focus for these logistics giants is to follow Chinese companies in their international expansion. In June, YTO Express partnered with Kazakhstan’s national postal service to launch a cross-border logistics service between China and the Central Asian country, marking Kazakhstan as YTO’s first market in Central Asia. 

In addition, the first China-made cargo aircraft, the ARJ21, introduced by YTO Express also chose Central Asia as the destination for its maiden commercial flight.

Editor: Tom Litting