Will Air Cargo Face a "Seismic Shock" Amid Tariff Pressures? How Much Longer Can E-commerce Cargo Demand Last?

Global air cargo demand, long fueled by booming e-commerce shipments, is now bracing for a “seismic shock” following sweeping global tariff policies announced by the United States. No party stands to gain from this disruption—trying to plan effectively in the face of ever-shifting trade targets has become nearly impossible. So, is the demand growth we saw in March just “the calm before the storm”?

Image source: Xeneta

On April 2, the U.S. government confirmed that starting May 2, 2025, it will revoke the de minimis duty exemption for low-value imports from mainland China and Hong Kong. All parcels previously qualifying under the $800 de minimis threshold will be subject to a 30% tariff or a flat fee of $25 per item—set to increase to $50 after June 1, 2025. This announcement is one of many global tariff measures under former President Trump’s newly implemented trade policy, effective April 9, 2025.

Then on April 8, the White House issued another update, further tightening the “de minimis” policy for imports valued under $800 from China:

The ad valorem tariff rate will increase from 30% to 90%;

From May 2 to June 1 (Eastern Daylight Time), a flat duty of $75 per package will be levied; after June 1, this rises to $150 per package.

In short, after May 2, even goods valued at or below $800 that previously qualified for duty-free entry will be taxed at 90% of their value or a minimum of $75 per package (rising to $150 after June 1).

Image source: The White House official website

Niall van de Wouw, Chief Airfreight Officer at Xeneta, said:

“In my 30 years in the air cargo industry, I don’t recall any single unilateral trade policy decision that could impact the global market so profoundly. E-commerce has been the driving force behind global air cargo demand. If that demand support suddenly evaporates, it would cause a massive ‘seismic shock’ to the market.”

On the China–U.S. trade lane alone, e-commerce shipments account for nearly half of cargo capacity, representing about 6% of global air cargo demand. A disruption in this demand would free up significant eastbound cargo capacity and ripple across other markets.

March air cargo data indicates that shippers and freight forwarders are hedging their bets—delaying long-term capacity commitments as they await clarity on the impact of new tariffs and rising global trade tensions. Yet despite this uncertainty, March demand still rose 5% year-over-year, showing no signs of panic—at least not yet.

Global economic shifts could put additional downward pressure on airfreight rates. In March, global spot air cargo prices continued their steady trend, up 6% YoY—the slowest growth rate since June 2024.

Van de Wouw noted that while slowing rate growth usually prompts shippers to commit to longer-term capacity for better pricing, few seem willing to take that risk right now—and this is before the new tariffs have even impacted shipment volumes.

Considering the tense trade relations between the U.S. and its global partners, this hesitancy is understandable. The new wave of U.S. tariff policies will likely push this uncertainty to unprecedented levels. As businesses try to cope with the fallout and await reactions from other nations, shippers remain in the dark about the scale of challenges ahead. Making long-term plans now could mean higher long-term costs.

As shippers, forwarders, airlines, and consumers adjust to new import taxes and the looming threat of trade wars, the broader air cargo market is reassessing its outlook.

The impact on e-commerce cargo bound for the U.S. isn’t just about higher prices for consumers—it also risks overwhelming U.S. Customs and Border Protection (CBP), which may struggle to process a sudden influx of taxed goods. The U.S. Department of Commerce has tried to ease concerns, stating that existing systems can handle the roughly 4 million de minimis parcels entering the U.S. daily.

In March, global air cargo capacity rose 2% year-over-year, but this growth lagged behind demand, keeping the dynamic load factor steady at 60% compared to the same period last year.

Van de Wouw also pointed out that consumer sentiment seems to be shifting fundamentally as tariffs and cost increases loom. "What happens if summer transatlantic passenger travel drops?" he asked. Fewer passengers mean less luggage, opening up more belly cargo capacity. If both passenger and cargo demand dip, airlines may be forced to downgrade aircraft or redeploy capacity elsewhere.

For now, e-commerce shipment volumes remain strong—but how long can that last?

On regional trade lanes, Northeast Asia–Europe demand saw double-digit month-over-month growth in March, but with more capacity deployed, spot rates stayed flat at $4.28/kg. Thanks to robust e-commerce activity, rates were still up 14% YoY. In contrast, return leg volumes were down 2% MoM and 14% YoY, with rates falling to $1.37/kg.

Northeast Asia–North America spot rates rose 9% MoM to $4.17/kg, likely in response to the temporary tariff lift in early February. Similar to the Europe–Asia route, return leg volumes dipped slightly (1% MoM) and dropped 20% YoY.

So, was March's growth just the calm before the storm?

Van de Wouw summed it up:

"Market anxiety and uncertainty benefit no one—producers, consumers, airlines, or freight forwarders. It’s a chaotic environment, with risks on all sides. No one wins in a scenario where the rules keep changing—it’s nearly impossible to plan effectively."

Everyone is watching closely to see how the elimination of the $800 de minimis threshold, as well as current and upcoming global tariff policies, will affect trade volumes, and how quickly demand might fall—ultimately shrinking the air cargo market. While the future remains uncertain, we should brace for the possibility that things might get worse before they get better.

END
public account :Cross-border E-commerce Logistics Baixiaosheng