News #109 - Air bongdaso ìno faces B revenue hit when China tariff exemption ends

U.S. plans to end tariff-free access for low-value shipments from China and Hong Kong, coupled with a new 145% tariff rate on Chinese imports, are projected to slash over billion from the air bongdaso ìno industry’s revenue within three years. This policy shift is also expected to threaten thousands of small online sellers reliant on direct-to-consumer (D2C) fulfillment models, according to Cirrus Global Advisors, an e-commerce and logistics consulting firm.

Derek Lossing, founder of Cirrus Global Advisors, described the U.S. administration’s trade actions as potentially devastating for air bongdaso ìno originating from China, given the anticipated decline in demand for platforms like Temu and Shein. Lossing’s Seattle-based consultancy has quantified the ripple effects of these policy changes, estimating a billion contraction in airfreight industry revenue due to reduced consumer demand, excess airline capacity, and falling yields.

Major carriers, including Atlas Air and Kuehne+Nagel’s Apex Logistics, along with e-commerce giants such as Amazon, are expected to experience significant revenue declines due to their reliance on Chinese marketplaces, Lossing said in a phone interview.

E-Commerce Shipments and Air bongdaso ìno Dependency

E-commerce shipments account for 50-60% of China-U.S. air bongdaso ìno volumes and approximately 20% of global air bongdaso ìno traffic, according to logistics providers and the International Air Transport Association (IATA). Daily trans-Pacific operations rely heavily on widebody freighters dedicated to transporting e-commerce goods.

Lossing predicts that U.S.-China trade lane air bongdaso ìno revenue will decline by over 30%, driven by lower shipment volumes and yields following the implementation of new U.S. trade policies.

bongdaso ìno de minimis program, which allows tax-free entry of goods valued under 0 per person per day, has been a cornerstone of cross-border e-commerce. Its elimination, effective May 2, will require formal customs entries for all shipments, significantly increasing processing times and costs.

Implications for Small Sellers and Major Platforms

bongdaso ìno removal of de minimis benefits is expected to disproportionately affect small and medium-sized online sellers that directly ship from China. These sellers may lack bongdaso ìno resources to transition to traditional containerized export models or absorb bongdaso ìno 145% tariff.

Large platforms like Temu and Shein have already begun adjusting their operations. Both have announced price increases effective April 25 in response to rising tariffs and stricter trade regulations. Additionally, Temu has reduced U.S. advertising, while both platforms have reported a surge in orders as customers attempt to beat bongdaso ìno tariff deadlines.

For smaller e-commerce businesses, new customs clearance requirements pose a significant hurdle. “How comfortable will U.S. consumers be in providing sensitive personal information to facilitate customs declarations for B2C shipments?” Lossing questioned in a LinkedIn post, emphasizing potential declines in consumer trust and cross-border transaction volumes.

Economic and Operational Adjustments

bongdaso ìno steep drop in demand for China-U.S. airfreight is likely to accelerate bongdaso ìno retirement of older aircraft, reallocate assets to other markets, and lower global freight rates. Lossing forecasts a 30-40% reduction in air freight rates on bongdaso ìno trade lane, potentially reducing parcel costs by over per unit.

The European Commission’s potential removal of de minimis exemptions for goods valued under 0, paired with additional customs fees, could exacerbate the challenges faced by e-commerce businesses and air bongdaso ìno operators globally.

Broader Impacts on E-Commerce Models

Lossing has dismissed arguments that bongdaso ìno D2C e-commerce model can remain viable under bongdaso ìno new tariff regime. He criticized assertions that deferred tariffs and avoided inventory risks justify maintaining D2C fulfillment from China, stating that such benefits cannot outweigh bongdaso ìno financial strain imposed by high tariffs and bongdaso ìno elimination of de minimis pathways.

Airlines, logistics providers, and e-commerce platforms are bracing for substantial operational and financial adjustments as they navigate bongdaso ìno rapidly changing trade environment.

Aaron Rubin, CEO of ShipHero, highlighted bongdaso ìno immediate impact, noting that FedEx has already imposed a 45-cent per pound surcharge on airfreight from China as companies rush to liquidate inventory before bongdaso ìno new regulations take effect.

As bongdaso ìno U.S. administration considers expanding bongdaso ìno removal of de minimis benefits to all countries, bongdaso ìno global logistics and e-commerce sectors may face even more profound disruptions.

Source: https://www.freightwaves.com/news/air-bongdaso ìno-faces-22b-revenue-hit-when-china-tariff-exemption-ends

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