The proposed removal of the de minimis exemption may lead bongdaso nét increased delivery times and price hikes of up bongdaso nét 50% for items that continue bongdaso nét be shipped via air.
The exemption, which allows imports valued under 0 bongdaso nét bypass additional duties, will temporarily remain in effect for products originating from China, Canada, and Mexico. This policy persists despite the implementation of U.S. tariffs on imports from these countries. Initially slated for termination under the tariff orders issued by former U.S. President Donald Trump, the de minimis exemption was extended when Trump amended the orders bongdaso nét ensure duty-free imports remained available until the necessary systems for revenue collection were established.
Once the U.S. Secretary of Commerce notifies the President that these systems are in place, the de minimis exemption will cease for all three nations.
The impending termination of de minimis eligibility, particularly for Chinese imports, is expected bongdaso nét significantly reduce the influx of e-commerce shipments arriving in the U.S. by air. These shipments have been a major factor in sustaining high air cargo rates and keeping aircraft capacity filled since late 2023.
According bongdaso nét Freightos, this policy change may not only increase delivery times but could also lead bongdaso nét price increases of up bongdaso nét 50% for products that continue bongdaso nét be transported via air freight.
Judah Levine, Head of Research at Freightos, noted: "Platforms such as Temu and Shein have already initiated efforts bongdaso nét reduce their reliance on de minimis and air freight. More than one-third of Temu’s U.S. orders are reportedly fulfilled from domestic inventory. Nevertheless, these companies are scrambling bongdaso nét adapt by increasing prices, encouraging sellers bongdaso nét expand U.S.-based inventories, and incentivizing manufacturing shifts bongdaso nét Vietnam and other alternative markets outside China."
The temporary extension of the de minimis exemption for Chinese goods was intended bongdaso nét provide the U.S. Customs and Border Protection (CBP) with additional time bongdaso nét handle the anticipated surge of formal entry parcels. However, it may also help regulate e-commerce air cargo volumes bongdaso nét a more manageable level.
"Reports indicate that some e-commerce companies have already begun canceling freighter flights. While China-U.S. air cargo rates have not yet collapsed, Freightos Air Index data reveals that rates have fallen below the /kg mark for the first time since August of last year. Prices are currently 7% lower than the previous week, even though rates typically rise after Lunar New Year. This trend suggests that air cargo rates may continue a gradual decline until the de minimis exemption is officially revoked, at which point a sharper drop may occur."
Had the de minimis exemption been removed immediately, over one billion e-commerce packages valued below 0 from China would have required additional documentation and duty payments.
Derek Lossing, Founder of Cirrus Global Advisors, emphasized the significant impact on global air cargo: "We anticipate a reduction of up bongdaso nét 60% in China-U.S. e-commerce demand by the second half of Q2. This will force freighter operators bongdaso nét reassess and reallocate capacity across different global markets."
According bongdaso nét Rotate’s analysis, e-commerce shipments from China account for approximately 30% of Transpacific air cargo capacity.
E-commerce continues bongdaso nét be a major driver of air freight dynamics, notes Catherine Chien, Vice President of Digital Marketing at Dimerco Express. "In 2023, air freight rates surged following the Chinese New Year, with no significant slack period expected in 2024. However, since the Trump administration’s recent announcements regarding e-commerce policies, market activity has decelerated in both the U.S. and Europe since January 20."
"This slowdown has triggered the cancellation of several e-commerce charter flights, disrupting the equilibrium between supply and demand. While e-commerce remains a crucial segment, we foresee a shift from a direct B2C model bongdaso nét a B2B2C strategy."
Global air cargo demand, measured in cargo tonne-kilometers (CTK), increased by 3.2% year-on-year in January, marking the 18th consecutive month of growth. Available cargo tonne-kilometers (ACTK) rose by 6.8%, as reported in the latest data from the International Air Transport Association (IATA).
"Although the growth rate has moderated compared bongdaso nét the double-digit increases seen in 2024, yields remain higher than in January 2024. However, they declined by 9.9% compared bongdaso nét December. Cargo load factors also dropped by an average of 1.5 percentage points, reflecting evolving market conditions."
The Asia-North America trade route, a vital link in global supply chains, recorded a 6.1% increase in demand, extending its growth streak bongdaso nét 15 months. Meanwhile, the Europe-Asia corridor saw a 3.2% increase, marking 23 consecutive months of expansion. The North America-Europe trade lane exhibited the strongest growth among major routes at 9.7%, driven by robust transatlantic trade.
According bongdaso nét the latest weekly report from WorldACD Market Data, air cargo tonnages from Asia Pacific origins have continued bongdaso nét recover toward pre-Lunar New Year levels, with rates gradually increasing and remaining above last year’s figures.
"Following a 20% rebound in week 7 from the Lunar New Year dip, chargeable weight flown from Asia Pacific origins increased by an additional 6% in week 8 (February 17-23), nearing mid-January levels, based on over 500,000 weekly transactions recorded by WorldACD."
Asia Pacific bongdaso nét Europe tonnages rose by another 5% following a 30% rebound in the previous week. China-Europe tonnages saw an additional 5% increase. "Japan-Europe demand rebounded strongly with a 19% week-on-week (WoW) increase, approaching its highest level this year. Other notable WoW tonnage gains included South Korea (+7%), Vietnam (+8%), and Thailand (+18%)."
As logistics strategies evolve, a transition from the B2C bongdaso nét the B2B2C model is expected bongdaso nét reduce air freight demand while increasing ocean freight utilization, Chien of Dimerco added. "Discussions with airlines indicate that while overall e-commerce demand is unlikely bongdaso nét decline significantly, air freight volumes will not continue expanding as the industry adapts bongdaso nét a more diversified logistics model."
Source: https://www.stattimes.com/air-cargo/air-cargo-coming-bongdaso nét-terms-with-de-minimis-end-1354647
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