China’s e-commerce giants hit by Iran war fuel costs

China’s Cross-Border E-Commerce Giants Face Double Blow From Iran War Fuel Costs and EU Tariffs

China’s e-commerce export engine is faltering as surging jet fuel costs driven by the Iran war and weakening consumer demand in the West squeeze profits for Temu, Shein, and AliExpress, according to Reuters reporting published on Sunday. The platforms, which built their business models on flying cheap goods directly from Chinese factories to doorsteps across the United States and Europe, now face a compounding challenge: new EU customs duties set to take effect on July 1.devdiscourse

Rising Fuel Costs Erode the Air-Cargo Model

The Iran conflict, which began in late February, has driven jet fuel prices up sharply. In March, U.S. airlines spent 56.4% more on jet fuel than in February, according to Department of Transportation data reported by CNBC. The Eno Center for Transportation noted that U.S. jet fuel prices rose from $2.50 a gallon to $4.88 a gallon between late February and early April — an increase of more than 100%.cnbc

The International Air Transport Association nearly halved its 2026 industry profit forecast to $23 billion, down from an earlier estimate of $41 billion, citing fuel costs and Middle East disruptions. Logistics companies including DHL Express have implemented substantial fuel surcharges, directly raising costs for platforms that rely on air freight to deliver low-value parcels worldwide.reuters

Compounding the supply-side pressure, weaker demand from lower-income consumers in the U.S. and Europe — whose household budgets are strained by inflation and rising petrol prices — is threatening the growth momentum these platforms enjoyed in recent years.devdiscourse

EU Customs Duties Loom

From July 1, the European Union will abolish its longstanding €150 de minimis customs duty exemption, replacing it with a flat €3 duty on all low-value parcels entering the bloc from non-EU countries. The measure, agreed by EU finance ministers in December 2025, targets the flood of cheap parcels from Chinese platforms that have undercut European retailers.euronews

Industry analysts suggest the duty is unlikely to halt Temu and Shein’s advance. The platforms are reportedly adapting by leveraging the EU’s Import One-Stop Shop VAT system to handle customs clearance at the point of purchase, reducing friction for consumers.shopappy

Shein Doubles Down on European Logistics

Despite the headwinds, Shein continues expanding its European logistics network. The company opened a 376,000-square-foot warehouse in Cannock in the UK Midlands last month, creating 450 jobs and bringing its total UK logistics workforce to 1,000. On Sunday, RTÉ reported that Shein is opening a new 16,000-square-foot facility in Rathcoole, south county Dublin, supporting up to 30 jobs.rte

“Ireland plays an important role in our wider European growth strategy and this investment strengthens our ability to provide improved, more efficient services for customers across the country,” Shein’s Corporate Communications Director Robin Kiely told RTÉ. The company also expanded its primary European distribution hub in Wrocław, Poland, where it now employs 5,000 people.rte

The shift toward regional warehousing reflects a broader industry pivot away from direct air shipment from China — a model that rising fuel costs and new tariffs are making increasingly untenable.devdiscourse