Air freight capacity between China and the United States has dropped nearly 30% following the suspension of the “de minimis” tariff exemption for low-value shipments. This change significantly impacts Asian airlines that heavily relied on e-commerce cargo, particularly from fast-fashion retailers like Shein and Temu.
Airlines adjust routes amid declining demand
Carriers such as Cathay Pacific, China Southern, Air China, and Korean Air are experiencing a downturn in demand due to the new tariff regulations. These airlines, previously benefiting from high-volume shipments, are now rerouting capacity and diversifying into sea shipping to adapt to the changing landscape.
E-commerce air cargo faces significant challenges
E-commerce air cargo, which once accounted for 55% of total shipments by tonnage, has been particularly affected. The removal of the “de minimis” exemption has led to a decline in low-value shipments, prompting major freight operators to adjust their strategies and explore alternative markets.
Potential shifts in manufacturing and trade routes
Countries in Southeast Asia could benefit if manufacturers shift operations away from China due to ongoing trade tensions. However, these nations also face new tariff challenges, and the industry is bracing for continued volatility. Air cargo is becoming a less reliable revenue stream amid economic uncertainty and shifting trade policies.
While a recent tariff détente between the U.S. and China offers temporary relief, the long-term outlook remains uncertain without the reinstatement of duty-free access. Airlines and freight operators must navigate this evolving environment to maintain stability and growth.