Imagine your eagerly awaited overseas bargain purchases flying across oceans to reach you. What you might not realize is that the international air freight enabling these affordable deals is experiencing a significant price surge. Recent data shows air cargo rates from China to Europe and North America have jumped 50% from recent lows. What's driving this increase, and will it affect your cross-border shopping?
E-Commerce Demand Overwhelms Air Cargo Capacity
The explosive growth of cross-border e-commerce platforms , particularly budget-focused marketplaces like Temu and Shein, has created unprecedented demand for air freight capacity. This surge in exports has led to severe cargo space shortages, inevitably pushing prices upward.
According to the TAC Index, as of November 20, air freight rates from Shanghai to North America reached $5.94 per kilogram - a 50% increase since early July. Similarly, Shanghai-to-Europe rates climbed to $4.64/kg, up 53%. Hong Kong-originating shipments showed comparable trends, with North America and Europe routes increasing by 32% and 37% respectively.
Pandemic Aftereffects Continue to Disrupt Supply Chains
Air cargo capacity primarily depends on passenger aircraft belly space and dedicated freighters. When COVID-19 grounded countless passenger flights in 2020, air freight capacity plummeted. Concurrent ocean shipping challenges - including container shortages and port congestion - further strained logistics networks, sending freight rates soaring.
While partial recovery occurred in 2022 as passenger flights resumed and maritime shipping normalized, the air cargo market never fully regained equilibrium. The current e-commerce boom has placed intense pressure on this fragile system , with reports of Chinese shippers aggressively bidding up charter flight rates to secure space.
Western Consumers Shift Toward Budget Purchases
This pricing dynamic reflects broader changes in Western consumer behavior. Persistent inflation and monetary tightening have weakened purchasing power, leading retailers to struggle with excess inventory and reduced demand for conventional imports. In this environment, competitively priced Chinese goods appear increasingly attractive.
This suggests Western markets may be experiencing a "trading down" phenomenon , where shoppers prioritize value over brand prestige. Budget e-commerce platforms have capitalized on this shift, driving export volumes that indirectly contribute to rising air freight costs.
Japan Emerges as Unexpected Transit Hub
The export surge has created ripple effects across regional logistics networks. Despite Japan's ongoing export declines, spot freight rates from Japan to North America rebounded starting September. Analysts attribute this to significant volumes of Chinese goods being routed through Japanese airports before transshipment to North American destinations.
Potential Impact on Cross-Border Shoppers
For international online shoppers, the air freight surge will likely translate to higher prices. While merchants may absorb some cost increases, most will eventually pass these expenses to consumers through modest price adjustments.
The exact impact will vary by product category, weight, and shipping distance. However, frequent shoppers - particularly those using value-oriented platforms - should anticipate gradual price increases in coming months.
This complex situation stems from multiple factors: lingering pandemic disruptions, explosive e-commerce growth, and evolving Western consumption patterns. For consumers, staying informed about market developments and making considered purchasing decisions remains the best approach.