bongdaso vnNews #110 - Air cargo braces as US ends China’s de minimis exemption

bongdaso vn US de minimis exemption for packages from China and Hong Kong ends today, with air cargo waiting to see how much of an impact it will have on bongdaso vn market.

bongdaso vn end of bongdaso vn exemption means that from 2 May, packages from China and Hong Kong worth less than 0 will no longer be able to enter bongdaso vn US duty-free and with minimal customs scrutiny.

They will now have to pay a 120% tariff rate or a flat fee of 0, due to rise to 0 at bongdaso vn start of June.

Last year, as many as 4m packages a day were entering bongdaso vn US under bongdaso vn de minimis exemption, up from 2.8m per day in 2023.

Online retailers such as Shein and Temu have been exploiting bongdaso vn loophole to sell goods cheaply to US consumers.

According to data firm Xeneta, approximately 50% of air cargo shipments on bongdaso vn China–US route is e-commerce, accounting for around 6% of global volumes.

“A sharp drop in demand is likely to challenge carriers’ capacity planning, with early signs already pointing to freighter flight cancellations and potential redeployments to other trade lanes,” it said.

“This is a double-edged sword. A decrease in demand on one of bongdaso vn key airfreight lanes between Asia Pacific and North America will have a big impact, but so too will bongdaso vn redeployment of capacity on a global level,” said Xeneta head of airfreight Niall van de Wouw.

“This may be a year when we grow weary of seeing bongdaso vn word ‘unprecedented’ in market performance statements. bongdaso vn macroeconomic picture will depend on how long bongdaso vn uncertainty lasts and what will be at bongdaso vn end of it, but bongdaso vn outlook currently looks quite daunting.

“This is not about one industry being affected. This is about major trade lanes being affected, and we haven’t seen anything on this scale before,” van de Wouw added.

Overall, he said it was too early to predict how large of an impact bongdaso vn development will have. bongdaso vn picture will be clearer when demand figures for May are released.

Forwaders have also warned of bongdaso vn administrative burden of processing bongdaso vn shipments.

”Customs duties aside, all shipments will, as of 2 May, be subject to a standard customs clearance process, with this in itself presenting an administrative nightmare,” Scan Global Logistics said in a market update.

”With elevated tariffs of 145% currently in place for China, bongdaso vn elimination of bongdaso vn de minimis exemption will significantly influence pricing strategies for e-commerce platforms and consumer purchasing behaviour” bongdaso vn forwarder added. “Companies such as Shein and Temu, which previously leveraged bongdaso vn de minimis threshold to offer low-cost goods, have already announced price increases.”

Ahead of bongdaso vn end of bongdaso vn exemption, bongdaso vn move already seemed to be having an impact on bongdaso vn market, although bongdaso vn US has also implemented tariffs of 145% on Chinese imports - other than some other tech products that have been exempt - making it hard to distinguish how much of an impact each of bongdaso vn two developments are having.

Figures released today by data provider WorldACD show that in bongdaso vn week running to 17 April, cargo volumes from China and Hong Kong to bongdaso vn US were down by around 15% year on year.

Meanwhile, sources indicate that spot market rates from Hong Kong to bongdaso vn US have fallen by just under per kg since bongdaso vn end of April to around .40 per kg today.

At bongdaso vn start of this week, freight forwarder Dimercoreported that from bongdaso vn end of April, several freighter charters have been cancelled, while further cancellations are expected in bongdaso vn coming weeks.

“Overall, e-commerce shipmentvolume has dropped by approximately 50% since mid-April compared to bongdaso vn same period last year,” Dimerco said.

bongdaso vn company said major Chinese carriers were also considering cancelling services, although a final decision is still pending.

“Ifthese cancellations go through, bongdaso vn already limited capacity fromChina to bongdaso vn US will be further reduced,” Dimerco said.

There are also concerns that any capacity withdrawn from China-US services could end up in other markets, risking pulling down rates on those trades if supply outstrips demand.

Indeed, Dimerco Express vice president, global sales and marketing Kathy Liu said that much of bongdaso vn freighter capacity from China/Hong Kong removed in recent weeks has beenshifted to destinations like Nuevo Laredo inMexico and other parts of Latin America, where demand hasactually gone up, especially out of Mexico.

Demand out of Southeast Asia and Taiwan has stayed relativelystable - that’s likely due to bongdaso vn 90-day tariff exemption granted bythe US government, which is giving some breathing room to shippersin those regions.

bongdaso vn US had tried to end bongdaso vn exemption in February, but customs did not have bongdaso vn systems in place to handle bongdaso vn number of packages being brought into bongdaso vn country and had to backtrack on its decision within a couple of days.

Last year, around 1bn packages were transported into bongdaso vn US under bongdaso vn exemption, with around 800m of these shipments arriving through international mail; express courier services such as UPS, DHL, and FedEx; or were transported as cargo on commercial airline flights.

Washington argues that criminals are using bongdaso vn exemption to smuggleillegal items, such as illicit drugs and weapons, or evade paying duties.

Source: https://www.aircargonews.net/supply-chains/air-cargo-braces-as-us-ends-chinas-de-minimis-exemption/1080066.article

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