Latest news with #Asia-to-US
The Sun
a day ago
- Business
- The Sun
Air cargo shipments from Asia to US slump
SHANGHAI: Air cargo shipment volume from Asia has declined by double digits since the US cancelled a tax exemption for low-value packages from China early in May, trade groups and analysts said. Air cargo demand from Asia to North America declined 10.7% in May versus the same month a year earlier, showed data from the International Air Transport Asso-ciation (IATA), illustrating 'the dampening effect of shifting US trade policies,' IATA director-general Willie Walsh said in a report published on Monday. Shipments valued under US$800 (RM3,375) – often sent by air to US customers of low-cost e-commerce platforms such as Shein and PDD's Temu – fall under the so-called de minimis, or too-small-to-matter, tax exemption. Since May 2, shipments sent from China and Hong Kong have been taxed at a rate initially as high as 145% before settling to as low as 30% after a mid-May trade detente between the US and China. The pair continue to negotiate on trade, with the US relaxing export restrictions on software, ethane and aerospace to China this week, ahead of July 9 when the US plans to re-impose a range of steep tariffs targeting multiple countries. The volume of low-value e-commerce shipments from China to the US in May saw a particularly steep decline, industry experts said. Such shipments fell 43% in May from the previous month, showed estimates from air cargo consultancy Aevean, but rose to other main export markets including Europe and South-east Asia. It is not clear whether such dramatic declines will continue, said Aevean managing director Marco Bloemen, given businesses had anticipated the de minimis halt and because the tariff rate was lowered mid-month. 'Will those e-commerce players bounce back to the US now they're paying 30% duties instead of zero duties?' Bloemen said. Firms turning to other markets due to US trade policy uncertainty is also likely weighing on shipment volume, he said. 'That's a trend that we're expecting to continue – there's more Europe-destined e-commerce ex-pected in the month of June, also to markets like Latin America.' Air cargo consultancy Rotate said e-commerce platforms were focusing on other markets to replace lost US demand, with significant export growth to the European Union and Asia-Pacific region. Shein and PDD did not immediately respond to Reuters' requests for comment. Low-value e-commerce out of Asia has been taking an increasing proportion of global air freight and boosting airlines' cargo businesses. Last year such shipments – at 1.2 million metric tons – made up 55% of goods shipped from China to the US by air compared to just 5% in 2018, Aevean data showed. As Asia-to-US demand fell in May, airlines pulled freighter aircraft off trans-Pacific routes and placed them elsewhere, industry experts said. Some of that demand has now returned as firms take advantage of tariff pauses between the US and a number of countries, but flight fre-quencies are reduced, they said. 'Some of the larger players that were chartering three flights a week have cut back to two,' said e-commerce consultancy Cirrus Global Advisors. Direct freighter capacity between China and the US in June was 11% lower compared to March, wiping out growth in capacity over the past year on those lanes, Rotate data showed. Asia-focused freight forwarder Dimerco Express reported a significant decline in its e-commerce bookings, estimating a 50% drop in both May and June. This sharp decrease in demand has led to on-going cancellations of scheduled freighter flights, as the firm faces logistical challenges and adjusts its operations in response to the weaker market conditions, according to their latest report. The de minimis rule, which dates to 1938, had been a target of criticism from American lawmakers as a loophole that lets Chinese products skirt US tariffs and allows illegal drugs and precursors to make opioid fentanyl to enter the US unscreened. – Reuters
RTHK
a day ago
- Business
- RTHK
Plunge in small parcels takes toll on air shipments
Plunge in small parcels takes toll on air shipments As Asia-to-US demand fell in May, airlines pulled freighter aircraft off trans-Pacific routes and placed them elsewhere. File photo: RTHK The volume of air cargo shipments from Asia has declined by double digits since the United States cancelled a tax-free exemption for low-value packages from China early in May, trade groups and analysts said. Air cargo demand from Asia to North America declined 10.7 percent in May versus the same month a year earlier, data from the International Air Transport Association showed, illustrating "the dampening effect of shifting US trade policies," association director general Willie Walsh said in a report. Shipments valued under US$800 – often sent by air to US customers of low-cost e-commerce platforms such as Shein and PDD's Temu – fall under the so-called de minimis, or too-small-to-matter, tax exemption. Since May 2, however, such shipments sent from mainland China and Hong Kong have been taxed at a rate initially as high as 145 percent before settling to as low as 30 percent after a mid-May trade detente between the United States and China. The pair continue to negotiate on trade, with the United States relaxing export restrictions on software, ethane and aerospace to China this week, ahead of July 9 when Washington plans to reimpose a range of steep tariffs targeting multiple countries. The volume of low-value e-commerce shipments from China to the United States in May saw a particularly steep decline, industry experts said. Such shipments fell 43 percent in May from the previous month, showed estimates from air cargo consultancy Aevean, but rose to other main export markets including Europe and South-East Asia. It is not clear whether such dramatic declines will continue, said Aevean managing director Marco Bloemen, given businesses had anticipated the de minimis halt and because the tariff rate was lowered mid-month. "Will those e-commerce players bounce back to the United States now they're paying 30 percent duties instead of zero duties?" Bloemen said. Companies turning to other markets due to US trade policy uncertainty is also likely weighing on shipment volume, he said. "That's a trend that we're expecting to continue – there's more Europe-destined e-commerce expected in the month of June, also to markets like Latin America." Air cargo consultancy Rotate said e-commerce platforms were focusing on other markets to replace lost US demand, with significant export growth to the European Union and Asia-Pacific region. Low-value e-commerce out of Asia has been taking an increasing proportion of global air freight and boosting airlines' cargo businesses. Last year such shipments – at 1.2 million tonnes – made up 55 percent of goods shipped from China to the United States by air compared to just 5 percent in 2018, Aevean data showed. As Asia-to-US demand fell in May, airlines pulled freighter aircraft off trans-Pacific routes and placed them elsewhere, industry experts said. Some of that demand has now returned as companies take advantage of tariff pauses between the United States and a number of countries, but flight frequencies are reduced, they said. (Reuters)
New Straits Times
a day ago
- Business
- New Straits Times
End of tax-free loophole for low-value goods disrupts air shipments to US from China
SHANGHAI/SEOUL: Air cargo shipment volume from Asia has declined by double digits since the US cancelled a tax-free exemption for low-value packages from China early in May, trade groups and analysts said. Air cargo demand from Asia to North America declined 10.7 per cent in May versus the same month a year earlier, showed data from the International Air Transport Association (IATA), illustrating "the dampening effect of shifting US trade policies," IATA Director General Willie Walsh said in a report published on Monday. Shipments valued under US$800 – often sent by air to US customers of low-cost e-commerce platforms such as Shein and PDD's Temu – fell under the so-called de minimis, or too-small-to-matter, tax exemption. Since May 2, however, such shipments sent from China and Hong Kong have been taxed at a rate initially as high as 145 per cent before settling to as low as 30 per cent after a mid-May trade détente between the US and China. The pair continue to negotiate on trade, with the US relaxing export restrictions on software, ethane and aerospace to China this week, ahead of July 9 when the US plans to re-impose a range of steep tariffs targeting multiple countries. The volume of low-value e-commerce shipments from China to the United States in May saw a particularly steep decline, industry experts said. Such shipments fell 43 per cent in May from the previous month, showed estimates from air cargo consultancy Aevean, but rose to other main export markets including Europe and South-East Asia. It is not clear whether such dramatic declines will continue, said Aevean Managing Director Marco Bloemen, given businesses had anticipated the de minimis halt and because the tariff rate was lowered mid-month. "Will those e-commerce players bounce back to the US now they're paying 30 per cent duties instead of zero duties?" Bloemen said. Companies turning to other markets due to US trade policy uncertainty is also likely weighing on shipment volume, he said. "That's a trend that we're expecting to continue – there's more Europe-destined e-commerce expected in the month of June, also to markets like Latin America." Air cargo consultancy Rotate said e-commerce platforms were focusing on other markets to replace lost US demand, with significant export growth to the European Union and Asia-Pacific region. Shein and PDD did not immediately respond to Reuters' requests for comment. Cargo cut-backs Low-value e-commerce out of Asia has been taking an increasing proportion of global air freight and boosting airlines' cargo businesses. Last year such shipments – at 1.2 million metric tons – made up 55 per cent of goods shipped from China to the US by air compared to just five per cent in 2018, Aevean data showed. As Asia-to-US demand fell in May, airlines pulled freighter aircraft off trans-Pacific routes and placed them elsewhere, industry experts said. Some of that demand has now returned as companies take advantage of tariff pauses between the US and a number of countries, but flight frequencies are reduced, they said. "Some of the larger players that were chartering three flights a week have cut back to two," said e-commerce consultancy Cirrus Global Advisors. Direct freighter capacity between China and the US in June was 11 per cent lower compared to March, wiping out growth in capacity over the past year on those lanes, Rotate data showed. Asia-focused freight forwarder Dimerco Express estimated its e-commerce bookings were down 50 per cent in May and June. As a result, scheduled freighter flights continue to be cancelled, it said in a report. The de minimis rule, which dates to 1938, had been a target of criticism from American lawmakers as a loophole that lets Chinese products skirt US tariffs and allows illegal drugs and precursors to make opioid fentanyl to enter the US unscreened.
Yahoo
03-04-2025
- Business
- Yahoo
FedEx CEO Hints at Big Plans for China as Xi Makes Foreign Investment Case
As a trade war threatens U.S.-China relations and global supply chains alike, FedEx is paying no mind. The Memphis, Tenn.-based logistics giant plans to further expand its presence in China, president and CEO Raj Subramaniam told a group of international executives and trade association leaders at a roundtable hosted by Chinese President Xi Jinping on Friday. More from Sourcing Journal Can Shein Improve Garment Workers' Lives Without the 'Flashy PR Play'? Asia-to-US Air Cargo Buoying Global Demand, Rates China's Antitrust Regulator Preps Probe of Panama Ports Deal Subramaniam was one of seven executives who spoke at the event held in Beijing, where Xi made the case for foreign investment in the country in the wake of the tariffs levied against it by the Trump administration. There were 40 executives in attendance, with Subramaniam sitting alongside Pfizer CEO Albery Bourla, Eli Lilly CEO David Ricks, Blackstone chairman Stephen Schwartzman and Bridgewater Associates founder Ray Dalio among others. FedEx, which opened a new and expanded China headquarters in Shanghai last year, already operates more than 100 retail branches and over 100 ground stations across the country, along with 3,000 vehicles. It also operates more than 300 international flights in China per week. 'FedEx remains committed to investing in markets that are critical to the future of global commerce,' said Subramaniam. 'We acknowledge China's influential role in global trade and seek to build strong, transparent and mutually beneficial partnerships that support shared innovation and long-term success.' Subramaniam did not elaborate on the specifics of FedEx's investment, but the package delivery firm has recently been making more moves that will undoubtedly grow the company's footprint in the market. At the end of 2023, the company broke ground on a new south China operations center in Guangzhou that will supplement the company's Asia Pacific hub at Guangzhou Baiyun International Airport. Slated to begin operating in 2027, the 440,000-square-foot facility will be able to sort up to 25,000 packages and documents per hour—three times the current FedEx Guangzhou gateway capacity. The Guangzhou gateway handles approximately 40 percent of the hub's import and export cargo volume. The expansion is designed to improve FedEx's capacity and efficiency in processing import and export shipments in south China, and connect Asian customers to FedEx's North American and European networks. The Asia Pacific hub also currently hosts a 155-acre, 873,000-square-foot air sorting and handling facility that could sort 36,000 packages per hour. Last year, FedEx also upgraded another one of its gateways in Shenzhen, equipping an import warehouse with an advanced intelligent warehouse management system and an additional sort belt. With the enhancements, the gateway expanded its footprint by 48 percent to over 48,400 square feet, doubling the sorting capacity of packages and documents, while increasing freight handling capacity by 50 percent. And at Shanghai Pudong International Airport, FedEx plans to expand its Shanghai International Express and Cargo Hub, so that there are more air transit lanes connecting Shanghai with China's second- and third-tier cities. This is aimed at connecting these cities with more international markets. In November, FedEx opened two new gateways in Xiamen and Qingdao, and also increased international flight frequency out of both cities from once a week to five times per week. Both services will stop in Memphis. FedEx is also upgrading its capabilities within China to support e-commerce delivery. In early March, FedEx launched a picture proof of delivery service for express residential deliveries on the Chinese mainland, where signatures upon delivery are not required. With recipient authorizations, FedEx couriers can deliver the parcel to customers' doorsteps and take a real-time photo showing its exact position, according to the company. This gives consumers the location of where their shipment was left, and can also show a picture of a door tag in the event of a missed delivery. If there's a major American exec who would understand the potential benefits of a closer relationship between the U.S. and China, Subramaniam would be on the short list. The FedEx CEO also serves as the chair of the U.S.-China Business Council, a nonprofit organization comprising over 270 American businesses that is aimed at promoting trade between both countries. According to a report from China Daily, Subramaniam said the meetings held with Chinese leaders significantly reinforced his 'unwavering' confidence in China's long-term growth. He also emphasized the need for governments and businesses to bolster supply chain flexibility and resilience by streamlining processes and reducing regulatory trade barriers. In the Friday roundtable, Xi acknowledged problems encountered by foreign investors in China, saying that the country plans on lowering the market access threshold, maintaining fair competition and strengthening service guarantees for international businesses exiting the market. 'In recent years, foreign investment in China has also encountered interference from geopolitical factors, which involves international politics and diplomacy. I often say that blowing out other people's lights will not make your own light brighter; blocking other people's roads will only block your own road in the end,' Xi said, in an apparent swipe at President Donald Trump. Sign in to access your portfolio
Yahoo
31-03-2025
- Business
- Yahoo
Air Cargo Demand Declines for First Time Since July 2023
Air cargo demand saw a slight year-over-year contraction in February, the first such decline in demand since July 2023, according to the International Air Transport Association (IATA). Total demand, measured in cargo tonne-kilometers (CTKs), declined by 0.1 percent compared to February 2024 levels. The total got a little bit of help last year as well, with annual comparisons affected by the extra day in the year-ago month due to the leap year. More from Sourcing Journal Asia-to-US Air Cargo Buoying Global Demand, Rates Air Cargo Congestion 'Will Ripple Outward' After Heathrow Airport Closure French Shipping Tycoon Pledges $20 Billion to U.S. Logistics Industry After adjusting for seasonality, including the extra date, air cargo traffic would be 3 percent above the year prior. This is just under January's demand growth rate of 3.2 percent. On a month-over-month basis, seasonality adjusted demand fell 0.6 percent from January. 'Much of this is explained by February 2024 being extraordinary—a leap year that was also boosted by Chinese New Year traffic, sea lane closures and a boom in e-commerce,' said Willie Walsh, IATA's director general, in a statement. 'Rising trade tensions are, of course, a concern for air cargo. With equity markets already showing their discomfort, we urge governments to focus on dialogue over tariffs.' The IATA's plea comes ahead of April 2, or 'Liberation Day,' when President Donald Trump expects to impose a series of reciprocal tariffs on 'all countries.' Trump has already slapped 20-percent additional duties on products coming out of China, the primary market for cargo shipped via air to the U.S. Those tariffs have partly resulted in a mad dash for U.S. shippers to bring in goods from China via the cheaper ocean freight alternative. Major U.S. container ports are expected to continue to see elevated inbound cargo volume through the spring, but air cargo traffic hasn't mirrored the months-long uptick experienced by its sea-bound counterpart. The air cargo industry peaked in October 2024 at 24.4 billion CTKs, according to the IATA, but has entered a phase of gradual deceleration. At the time, demand saw its 15th consecutive month of annual growth. Air cargo volumes typically crest during the winter months as goods are shipped into the U.S. ahead of and during the holiday season before subsequently cooling down. Year to date, the air cargo market has thus remained tepid, with total demand growth of 1.5 percent. That increase is still well below the IATA's 6 percent expected growth for CTKs throughout 2025. Like data recently released from WorldACD, flights out of the Asia Pacific region are carrying the load for overall customer demand for air freight, push overall international CTK growth a modest 0.4 percent. That total is 3.5 percent when adjusted for leap year. Asia Pacific carriers led the February numbers with a 5.1 percent year-over-year gain, though they still decelerated from 7.5 percent in the prior month. The trans-Pacific corridor remained the busiest trade lane in the world despite the China tariffs, representing 24.4 percent of all flights and ticking up 0.1 percent year over year for its 16th consecutive months of growth. The trans-Atlantic route between North America and Europe saw expanded demand of 4.5 percent. Ceva Logistics is looking to capitalize on the trans-Pacific trade lane, introducing its own three times per week trans-Pacific charter this month. IAG Cargo, which handles cargo for British Airways, is expanding its upcoming summer schedule in the trans-Atlantic route, reinstating three times-weekly services from both Madrid and Barcelona to San Francisco. More will be added from Dublin to Denver, and London to Chicago, Vancouver and Washington, D.C. There is still plenty of uncertainty for e-commerce giants like Shein, Temu and others aiming to ship goods out of China to the U.S., as the duty-free de minimis trade provision remains under fire from the Trump administration. If that exemption, which enables packages with goods valued at less than $800 to enter the U.S. tax free, gets the axe, rates and demand are likely to spiral even further. Across all trade lanes, North American and European airlines reported their first year over year declines in February since late 2023, at 0.4 percent and 0.1 percent, respectively. As for capacity, it declined 0.4 percent year over year to 43.5 billion ACTKs in February, according to the IATA. When adjusting for seasonality, capacity fell slightly compared to January, while remaining 3.3 percent above the level observed a year ago. With overall demand declining, rates are falling as well. Global air cargo yields dropped by 6.1 percent month over month, reaching a 12-month low.
