News #100 - Is cross-border e-commerce air cargo demand at risk?

23.02.2025

The looming demise of the de minimis exemption could spur higher costs and delays, said Xeneta’s Niall van de Wouw.

While the de minimis exemption has momentarily returned, a permanent move from President Donald Trump’s administration to nix the provision will significantly impact air freight capacity between the U.S., China and beyond, according to Xeneta’s Feb. 5 report.
With cross-border e-commerce shipments accounting for more than 50% of cargo capacity from China to the U.S., prohibiting import shipments from de minimis entry would raise costs, add “time-consuming” entry requirements and create customs delays, Xeneta reported.
“E-commerce products may be slightly more expensive if de minimis is removed, but they will still be cheaper than buying through retailers in the US – but delays in receiving the goods due to operational disruptions could have a bigger impact than price because it takes away the attractiveness for consumers,” Chief Airfreight Officer Niall van de Wouw said.

According to van de Wouw, it will “take a sledgehammer” to crack consumer demand — blocking de minimis alone won’t do it.

“China e-commerce was not set up to take advantage of de minimis loopholes - it has taken advantage of consumer demand for cheap, fast goods,” he said.

He added that China’s e-commerce giants “knew this day would come” and would not build a business model that would easily crumble under a collapse of the de minimis exemption.

“Even if de minimis is being blocked, the e-commerce retailers will still keep selling and shipping the goods. There may not be a significant impact on air freight rates in the short term in this scenario, even if it causes chaos at the receiving airport in the US.”

If the consumer decides that the cheaper price is not worth the longer wait to receive their goods, the air cargo market would most likely see a downward pressure on global air freight rates.

“Let’s wait and see. Maybe nothing changes,” he said.

Looking toward 2025

Van de Wouw reported no reason to change Xeneta’s 4% to 6% 2025 air cargo growth forecast, despite January seeing a lower-than-expected 2% year-over-year increase in air freight demand.

January By The Numbers

2%: YoY percentage increase in global air cargo volume
$2.65: The average spot rate per kilogram, up 17% YoY and down 11% compared to the month prior
57%: The global dynamic load factor, which measures the volume and weight of cargo flown, as well as available capacity

Source: Xeneta

According to Xeneta’s chief airfreight officer, January volumes were impacted by the earlier Lunar New Year celebrations, adding that anxiety over trade wars and tariffs are premature.

“The lower growth in air cargo demand in January was not down to President Trump, nor, entirely, the earlier Lunar New Year. It also compares to an unusually high comparison in January 2024,” van de Wouw said.

But planning will still be challenging as uncertainty is not beneficial for trade confidence, he noted. Van de Wouw advised that shippers should “not be rushing to make too many plans or take any drastic measures,” adding that teams should be flexible and patient to see how things play out.

“The implementation of tariffs by the US and the responses of China, Canada, and Mexico are just the start of a negotiation. It’s all transactional,” he said. “We could end up in a global trade war, but in the case of President Trump, we have someone who’s ready to negotiate everything and the rest of the world can influence the outcome, as we have already seen. The consistency here is he’s looking for a deal.”

Source: https://www.supplychaindive.com/news/xeneta-cross-border-e-commerce-air-cargo-de-minimis-risk/740392/