Air freight rates from China to the US have plummeted since Lunar New Year, driven by the typical post-holiday slowdown and uncertainty over new US trade restrictions on low-value imports under the “de minimis” threshold.

Though the sharp decline in spot prices has stabilized in March, average rates from Shanghai to the US were down 29% in February compared to January, according to Niall van de Wouw, chief air freight officer at Xeneta. He noted that shippers are seeking ways to navigate US tariffs while some anticipate further rate drops if e-commerce volumes decline.

Last year’s booming e-commerce demand kept China’s air freight sector in peak season mode, but recent US regulatory moves have unsettled the market. The de minimis rule allows duty-free imports of goods valued under $800 per shipment, but China’s dominance in low-value shipments—accounting for two-thirds of 1.36 billion such imports last year—has drawn scrutiny. The Trump administration’s temporary removal of these exemptions in February caused severe disruptions, forcing a rollback until a proper inspection and duty system is implemented.

Alan Beacham, managing director of Toll Group, described massive supply chain turmoil when low-value shipments were briefly excluded, with millions of parcels piling up at major US hubs. “The intersection of tariffs, customs regulations, and e-commerce growth is creating significant uncertainty,” he said at the TPM25 conference.

Kathy Liu of Dimerco Express Group reported that air cargo demand slowed sharply after Jan. 20 due to policy changes, prompting e-commerce platforms to cancel charters. She noted a shift from direct business-to-consumer (B2C) air shipments toward traditional fulfillment models, increasing reliance on ocean freight.

While Xeneta forecasts air freight growth of 4-6% in 2025, lingering trade tensions cast doubt over the outlook. Market analysts warn that while a temporary dip in demand may ease capacity constraints, long-term issues such as aging fleets, aircraft production delays, and regulatory hurdles will keep the air cargo market tight.

Cargo Facts, an air cargo consultancy, described the sector’s near-term outlook as uncertain. “Trade policies and supply chain disruptions are reshaping the industry,” it stated, highlighting the risk of capacity shortages if air freight growth slows while fleet expansion remains sluggish.

Source: joc.com