 Tariffs, deminimis changes spark air cargo capacity shifts |
Source |
American Shipper |
Post Date |
06/18/2025 |
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The countries of origin on Transpacificroutes are changing as shippers move production out of China.
As airfreight volume plummets, carriers areredeploying capacity to keep pace with shippers?moves to mitigate tariffs,experts told Supply Chain Dive.
Since the Trump administration announced its reciprocal tariffs inApril, China-U.S. cargo volumes ped by up to 60%, Tariffs have impactede-commerce bookings in particular, which typically account for up to 60% ofChina-U.S. shipments and 20% of global air cargo. E-commerce bookings pedby 50% in May.
Besides e-commerce, the tariff changes havehad the broadest impact on automotive volumes, fast fashion, consumerelectronics and toys, which are goods often shipped via air, experts said.
The May 2 of the de minimis exemption forimports from China and Hong Kong also resulted in falling volumes andexcess air freight capacity.
With volumes down ?especially as de minimisitems alone accounted for 50% of air freight volumes ?shippers are cancelingblock space agreements and ters, The air cargo sector is currently facingan estimated $22 billion revenue loss over the next three years as it battlestrade uncertainty.
To accommodate the changes, carriers areredeploying capacity to native routes, including Southeast Asia to theU.S.
?hile routes aren? changing completely,capacity is shifting as demand fluctuates,?that cargo volumes saw an upticksince the 90-day pause on tariffs was announced.The increase has helped to stabilize previously low rates and fill some of thatexcess airfreight capacity out of China.
For the week of May 27, air freight ratesfrom China to North America were down 7% week over week to $5.14 perkilogram, Freightos reported. Rates were at their lowestlevel since March.
Although shippers are still usingTranspacific routes, the countries of origin for the flights are changing asmore companies look to push production away from China as a buffer against U.S.tariff policies, Kronenberger said.
But moving procurement networks is no easytask.
?oving production and redefining companyownership to align with a new country of origin takes time, but we?e seeingthat clients are willing to reshape their strategies if it means creating amore resilient supply chain in the face of continued regulatory changes,?
Changing trade regulations have made it difficult to fore the next fewmonths. many clients are ?ariff shopping,?or looking for native ways tomitigate tariff impacts. For some, this might look like moving production awayfrom China or opting to use bonded warehouses to hold cargo upon arrival.
?n consumer technology especially, we?eseen some of our clients shift production out of China into Southeast Asiancountries or India,?he said. ?n these cases, some have already notified usthat up to half of what they?e currently shipping out of China is going tostart shipping from other countries.?
Shippers continue to struggle to understandhow the various tariff provisions are stacking up or canceling out, Theconfusion has led to ongoing changes in scenario planning, which can freezebusiness decisions, he warned.
?hippers are telling us they?e taking a?ait and see?approach?ontinuing to cancel orders from China,?But the realquestion is: what happens when the safety stock they?e been relying on runsout??
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