Cover Story
The sudden decline in e-commerce shipments disrupted cargo flows and capacity deployment and has clouded the outlook for the remainder of the year.
“ We just simply cannot predict how that is going to play out.”
FedEx, for example, said it could no longer provide a full-year forecast due to“ uncertain global demand” after China – US air freight volumes“ deteriorated sharply” in May.“ We just simply cannot predict how that is going to play out,” Chief Customer Officer Brie Carere told investors during a June 24 earnings call.
Global air cargo spot rates declined for a second consecutive month in June, falling 4 % year over year as capacity outstripped demand for the first time in 19 months, according to rate benchmarking platform Xeneta.
“ We are starting to see the longer-term effects of all this uncertainty because a lot of damage has been done,” Niall van de Wouw, chief air freight officer at Xeneta, said in a market update on July 4.
“ This might be the new reality for the foreseeable future as the industry is facing a much more challenging second half of the year. The air cargo market is losing altitude amid so much uncertainty,” he added.
After eliminating the duty-free exemption for low-value shipments from China valued at under $ 800 on May 2, the US on May 14 reduced the de minimis tariff on the low-value imports from 120 % to 54 %. Items sent via post from China to the US will be charged a flat fee of $ 100, regardless of value.
Replacement demand
US tariff deal lifts high-flying Vietnam air cargo demand
By Greg Knowler
Air cargo exports from Vietnam to the US are surging, with higher tariffs on China providing a powerful incentive for US importers to shift sourcing to the Southeast Asian manufacturing nation.
Air cargo volumes generated by frontloading ahead of“ reciprocal” tariffs in April and the subsequent 90-day pause on those tariffs in early May were piled on top of an already robust start to the year. Volumes from Ho Chi Minh airport to the US were up 62 % through April compared with the same period last year, with 97,000 tons of cargo carried across the Pacific, according to data from air cargo analyst Rotate.
Tim van Leeuwen, head of consulting at Rotate, said Vietnam was affected both by tariffs on its own imports as well those on other countries, notably China. The latest tariff framework agreement between the US and Vietnam, while still short on details, would likely result in Vietnam’ s volume growth continuing.
“ As long as China’ s tariffs remain higher than those in Vietnam, we expect... an increase in new US imports from Vietnam that will replace current US imports from China,” van Leeuwen told the Journal of Commerce in early July.
“ For instance, we may see a shipper who currently serves the US from China, and the Middle East and Europe from Vietnam, switch the two to optimize tariff impact,” he noted.
“ We expect... an increase in new US imports from Vietnam that will replace current US imports from China.”
Current US tariffs on Vietnam are 10 %, but the recently announced framework agreement will increase tariffs to 20 % on most Vietnamese exports. The deal includes a 40 % tariff rate on“ transshipment” aimed at countering the routing of Chinese exports through Vietnam, although no details regarding the definition and enforcement of that transshipment tariff have been released.
In return, Vietnam will impose zero tariffs on US imports and give preferential access to certain goods, such as large-engine automobiles.
In contrast, the US and China have a tentative agreement that will see US tariffs of 55 % on Chinese exports from Aug. 12, but the transshipment aspect of the US-Vietnam deal has again soured trade relations between Beijing and Washington, with retaliatory threats on both sides. Washington believes onethird of all Vietnamese exports to the US are actually Chinese products shipped through Vietnam.
Capacity boost
With its northern neighbor in a trade war with the US, Vietnam’ s air cargo sector has been capitalizing on its relatively low-tariff access to US markets.
A spokesperson for Kuehne + Nagel said Vietnam has emerged as a leading global growth market. The forwarder and its Asia-based subsidiary Apex operate 14 self-managed flights per week from Vietnam to the US, with demand driven by high-tech, electronics and semiconductor cargo.
Van Leeuwen said current direct capacity being deployed between Vietnam and the US was a significant increase on the past three years when there was almost no direct capacity.
“ However, most capacity out of Vietnam towards the US will make an intermediate stop along the way, so in that sense the capacity growth of 15 % to Northeast
12 Journal of Commerce | August 4, 2025 www. joc. com