The explosive growth of discount e-commerce shipments out of China is transforming the air cargo market, and the busiest part of the year is still months away. The big volumes are coming from online merchants including Temu and Shein, the bargain shopping apps that are eating space on aircraft and fueling double-digit gains in airfreight traffic this year. The WSJ Logistics Report’s Paul Berger writes the volumes are also creating competition for capacity, with Xeneta measuring prices out of South China to the U.S. that are up 40% from prepandemic levels. The surge in demand from diversions of ocean shipments because of the Red Sea crisis is adding to the squeeze—and to concerns over capacity to handle peak-season volumes later this fall heading into the holidays. That has freight forwarders and shippers weighing whether to lock in capacity early, a potentially costly decision if consumer demand falls short.

• A.P. Moller-Maersk withdrew from the bidding for German freight forwarder DB Schenker. (Air Cargo News)

The battle over labor exploitation in supply chains is reaching into the glamorous world of luxury goods. An investigation by Milan prosecutors into working conditions at local factories found workshops making handbags and other leather goods for Dior and Armani used exploited foreign labor to produce the high-end products at a fraction of their retail price. The WSJ’s Nick Kostov reports that recent raids in Italy exposed the contrast between the glitzy surfaces of Milan’s catwalks and some of the harsh realities of luxury-goods production. In one case, Dior paid a supplier roughly $57 apiece to assemble handbags that it sells in stores for about $2,780. Court rulings stemming from the investigation criticized the luxury companies for failing to adequately oversee their supply chains. The companies don’t face charges. But some of the independent suppliers could face charges for worker exploitation and employing workers without proper documentation.

A measure of U.S. factory activity remained in contraction in June for the third straight month. (MarketWatch)

Construction spending in the U.S. slipped in May, the first month-to-month decline since October 2022. (WSJ)

Boeing clinched a deal to buy supplier Spirit AeroSystems, taking back a troubled fuselage maker that it split off two decades ago. (WSJ)

Clothing supplier Delta Apparel filed for chapter 11 bankruptcy with a deal in hand to sell its Salt Life brand. (WSJ)

The Philippines is courting western investment to develop its nickel reserves as an alternative to China-dominated minerals supply chains. (Financial Times)

Vietnam’s economic growth accelerated to 6.9% in the second quarter. (VietnamPlus)

BYD’s electric-car sales jumped in June but vehicle exports fell 28% from the month before. (Barron’s)

Tata Steel workers at two plants in Wales canceled strike actions in favor of continued contract talks. (Reuters)

U.S. seaports are urging the Biden administration to withdraw a proposed 25% duty on Chinese-made gantry cranes. (Bloomberg)

Teamsters-represented Canadian rail workers voted to reauthorize a strike against the country’s two big railroads. (The Loadstar)

Microsoft closed all its bricks-and-mortar stores in China. (South China Morning Post)

Pitney Bowes sharply increased its cost-savings target to up to $160 million. (MarketWatch)

Bombardier agreed to settle a bondholder lawsuit which alleged the Canadian business jet manufacturer breached certain debt covenants. (Dow Jones Newswires)

Paul Page is editor of WSJ Logistics Report. Reach him at paul.page@wsj.com.

Follow the WSJ Logistics Report team: @PaulPage, @bylizyoung and @pdberger. Follow the WSJ Logistics Report on X at @WSJLogistics.