After the United States canceled its “de minimis exemption” tariff policy, air cargo volumes between China and the U.S. sharply declined. Industry groups and analysts have reported that since early May, air cargo volumes from Asia to the United States have decreased by double digits.
The International Air Transport Association (IATA) Director General Willie Walsh stated in a report released on Monday (June 30) that IATA data shows a 10.7% decrease in air cargo demand from Asia to North America in May compared to the same period last year.
Starting from May 2, the U.S. revoked the tariff exemption for packages valued below $800 known as “de minimis.” Small packages from mainland China and Hong Kong were subject to a 145% tariff, which was later reduced to 30% from mid-May. This move has impacted Chinese cross-border e-commerce platforms like Shein and Temu under Pinduoduo.
Industry experts noted a significant decrease in cheap goods exported from China to the U.S. through cross-border e-commerce platforms in May. According to estimates by air cargo consultancy firm Aevean, the volume of such shipments dropped by 43% compared to the previous month, while cargo volumes to other major export markets such as Europe and Southeast Asia increased.
Marco Bloemen, Managing Director of Aevean, mentioned that it remains unclear whether this substantial decline will persist as businesses have adjusted to the tariff changes for small packages, with rates lowered in mid-May. He added that the uncertainty in U.S. trade policies could drive cross-border e-commerce to shift focus to other markets, potentially impacting shipment volumes.
“We anticipate this trend to continue. It is expected that more cross-border e-commerce will shift towards Europe in June, and also target markets like Latin America,” he said.
Aviation cargo consultancy firm Rotate indicated that e-commerce platforms are redirecting their focus to other markets to compensate for the lost U.S. demand, with significant growth in exports to the EU and Asia Pacific region.
In recent years, the share of cheap e-commerce products from Asia in global air cargo transportation has been steadily increasing, driving business for airlines. Aevean data shows that last year, these goods accounted for 55% of air cargo shipped from China to the U.S., totaling 1.2 million metric tons compared to just 5% in 2018.
With the reduced demand from Asia to the U.S. in May, airlines are withdrawing freighters from trans-Pacific routes and reallocating them to other regions.
Experts mentioned that despite the partial recovery of demand due to the U.S. pausing high tariffs on multiple countries, flight frequencies have decreased.
Cirrus Global Advisors, an aviation cargo consultancy firm, stated, “Some larger corporations previously had three dedicated charter flights per week, now reduced to two.”
According to data from Rotate, air cargo capacity on direct routes between China and the U.S. decreased by 11% in June compared to March, offsetting the capacity increase on these routes over the past year.
Dimerco Express, a freight forwarding company with a focus on Asia, estimated that its e-commerce orders plummeted by 50% in May and June. The company reported that they are continuing to cancel regular cargo flights.
Although the U.S. “de minimis exemption” dates back to 1938, U.S. lawmakers criticized it as a policy loophole allowing cheap goods from mainland China to bypass U.S. tariffs, leading to the illicit flow of drugs and fentanyl precursors into the country without proper scrutiny.
(Translated from an article referencing Reuters)