Air freight volumes from Asia have dropped significantly since the US ended its tax exemption for low-value packages coming from China, as noted by trade groups and analysts.
According to data from the International Air Transport Association, demand for air freight from Asia to North America decreased by 10.7% in May compared to the previous year, which indicates the impact of changing US trade policies.
Packages valued under $800—frequently sent via air to customers using budget e-commerce platforms like Shein or PDD’s Temu—were previously tax-exempt under the De Minimis rule.
However, starting May 2, cargo from China and Hong Kong is being taxed at a hefty rate of 145% due to the ongoing trade tensions between the US and China.
Recently, both countries have been in talks, allowing China to ease certain export restrictions on software, ethane, and aerospace materials this week, instead of waiting for the US to reimpose steep tariffs on July 9.
Experts in the industry reported that there has been a notably sharp decline in low-value e-commerce shipments from China to the US during May.
The volume fell by 43% from April, according to estimates from Aievean Aire freight consultancy, although shipments to other major export markets like Europe and Southeast Asia saw an increase.
It’s hard to predict if this dramatic drop will persist. Aevean’s managing director, Marco Bloemen, expressed expectations for a slight recovery, especially considering that tariff rates were reduced mid-month.
Bromen raised an interesting question: “Will these e-commerce companies start sending items back to the US now that they face a 30% duty instead of none?” He suggested that the uncertainties of US trade policy might prompt businesses to look to other markets.
He added, “We’re hoping this trend continues. In June, markets in Latin America are expected to expand significantly, similar to Europe.”
According to air freight consultancy Rotate, e-commerce platforms are focusing on markets outside the US, significantly increasing their exports to the European Union and the Asia-Pacific region as a result.
Neither Shein nor PDD responded to requests for comments.
Cargo Cutback
Low-value e-commerce has been an essential driver in the global air cargo market, providing significant boosts to airline freight operations.
In 2022, these shipments made up 55% of the total items transported from China to the US, a remarkable rise from just 5% in 2018, per Aevean’s data.
With the decline in demand from Asia to the US in May, airlines began reallocating cargo capacity away from specific routes, experts noted.
Although there has been some recovery in demand as businesses utilize tariff suspensions between the US and various countries, the frequency of flights has decreased.
“Some larger companies that initially chartered three flights a week have reduced to two,” commented a consultant from Cirrus Global Advisors.
A report showed that direct freighter capacity between China and the US in June was 11% lower than in March, erasing the year-over-year capacity growth for these routes.
Dimerco Express, primarily an Asian freight carrier, estimated a 50% drop in e-commerce bookings during May and June, likely resulting in continued cancellations of scheduled freighter flights.
The De Minimis rules, which date back to 1938, have faced criticism from US lawmakers as a loophole that allowed Chinese products to skip US tariffs and has contributed to the illegal trafficking of opioid precursors like fentanyl.
