With the United States imposing additional tariffs on Chinese export goods, and the potential cancellation of the tariff exemption for e-commerce parcels valued under $800 from China to the U.S., the market growth for e-commerce parcels on China-U.S. routes faces significant challenges. These policy changes have triggered a chain reaction, not only affecting cross-border e-commerce logistics models but also having a profound impact on the international air freight market.

The implementation of U.S. tariff policies directly suppresses the market growth of e-commerce parcels on China-U.S. routes. E-commerce platforms are reevaluating the current fully-managed model that heavily relies on direct air shipment of small parcels. This model has driven rapid growth in cross-border e-commerce over the past few years, but its sustainability is now being questioned as a result of policy changes. The international air freight market is also facing concerns over excess capacity and declining rates.

Is it possible for international air freight rates to return to the levels seen before the 2020 pandemic? This question needs to be considered from multiple perspectives. Firstly, excessively high air freight rates are detrimental to the further development of the direct e-commerce small parcel model. If current air freight rates were to drop from around 40-50 RMB per kilogram to 20-30 RMB, it would significantly reduce the logistics costs for e-commerce direct shipment parcels. These reduced logistics costs could be reflected in sellers’ pricing and profits, helping to offset some of the cost increases due to U.S. tariffs.

A rational return of air freight rates would actually help the sustainable development of the cross-border e-commerce direct shipment logistics model. On the contrary, the current high rates are limiting the growth potential of cross-border e-commerce parcels. Therefore, adjustments to freight rates are not only a reflection of market demand but also a necessary condition for the healthy development of the industry.

Although the U.S. market faces challenges, the development of cross-border e-commerce is not limited to the United States. There is still sustained demand for air freight parcels in regions such as Europe, the Middle East, South America, Central Asia, Russia, Japan and Korea, Southeast Asia, and Australia. These markets still have incremental growth potential each year, and air capacity can be mobilized globally. As long as the overall cross-border e-commerce market continues to grow, we should remain confident about the future.

The next 2-3 years will be a period of concentrated aircraft capacity delivery in the market. Against the backdrop of a structural growth transformation in the industry, air freight rate adjustments and the redistribution and layout of capacity will undergo a process. The entire industry will undergo a redistribution of resources and a second adjustment of market supply and demand patterns. Industry expectations need to be recalibrated, and this adjustment may be more conducive to the sustainable development of the industry.

U.S. tariff policies have undoubtedly posed challenges to the international air freight market, but they also provide opportunities for industry adjustments and optimization. The rational return of air freight rates, the diversification of global markets, and the redistribution of capacity will lay the foundation for the sustainable development of cross-border e-commerce and the international air freight market. Despite facing short-term pressures, the industry remains full of opportunities in the long term.

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WeChat Public Account: Cross-Border E-Commerce Logistics Baixiaosheng