US tariffs, including the ending of De Minimis exemptions, have significantly disrupted air cargo flow to the United States. This has had the greatest impact on e-commerce shipments, which account for about one-third of worldwide air cargo. After months of companies frontloading shipments to avoid the tariffs, demand growth has slowed year over year, as activity decreased on the Transatlantic and Transpacific trade lanes.
In the case of air cargo e-commerce exports from China to the United States, these have declined for the fifth straight month in September, falling 34% year-on-year. While the decline was less severe than the 49% slump seen in June, it highlighted the shift in trade dynamics between Asia, Europe and North America.
At the same time, e-commerce continued to propel Asia-Europe airfreight volumes as China’s e-commerce behemoths accelerated their market share outside the U.S. China Customs data shows low-value and e-commerce sales to Europe surged 62% year-on-year in September, double the growth rate of a year ago and far outpacing China’s overall e-commerce expansion of 18%.
This was also verified by the International Air Transport Association (IATA), which confirmed that slowed China-to-U.S. demand has been more than compensated for by strong growth within Asia and on routes linking Asia to Europe, Africa and the Middle East.
The shift is also evident as service providers update their existing services and pivot to where cargo capacity is required. In the case of UPS, they have enhanced aircraft capacity and ground infrastructure in their intra-Asia air network to support growing regional demand for goods transport, while dialling back Transpacific service to the United States.
For more information, contact David Lychek, Director – Ocean & Air Services.
