Source: Supply Chain Dive
Date: 4th June 2025

Shippers shift strategies amid falling volumes, capacity redeployments, and de minimis changes

Air cargo networks are experiencing major adjustments as shippers move production away from China to mitigate the impact of new U.S. tariff policies.

Following the implementation of reciprocal tariffs and the end of the de minimis exemption for Chinese and Hong Kong imports, volumes on China–U.S. routes have dropped sharply, up to 60% in some cases.

This decline, especially in e-commerce, consumer electronics, fast fashion, and automotive shipments, has forced carriers to reassess their network strategies.

The sudden drop in volume has led to significant overcapacity, prompting shippers to cancel block space agreements and charters.

Air freight carriers are now reallocating capacity to alternative lanes, particularly between Southeast Asia and the U.S., as companies increasingly diversify sourcing to reduce exposure to trade disruptions.

While rates briefly stabilized during a tariff pause, they remain volatile, and the sector is facing projected revenue losses of $22 billion over the next three years.

With sourcing strategies in flux, businesses are cautiously exploring long-term moves—such as shifting manufacturing hubs to Southeast Asia or India, or using bonded warehouses—to protect supply chains from ongoing regulatory uncertainty.

However, many shippers remain in a holding pattern, relying on existing safety stock and scenario planning as they await clearer policy directions. The ripple effects of these changes may continue to evolve as companies race to adapt to an unpredictable trade landscape.