Demand drops further as de minimis exemption ends: WorldACD
Coming weeks will likely produce another twist in the plot after the unexpectedly swift pause in U.S.-China trade war.
Worldwide chargeable weight declined one percent in week 19 (May 5-11) compared to the previous week, marking a string of contractions since the first week of April that was only interrupted by stable volumes in week 17.
"The comparison of the last two weeks with the previous two weeks (2Wo2W) shows a worldwide tonnage decline of three percent, with Europe and North America being the only origin regions to see traffic growth of two percent and three percent, respectively, partly related to post-Easter recovery for those origins," according to the latest update from WorldACD.
The end of U.S. de minimis exemption of China-origin imports worth less than $800 effective May 2 reinforced the global downward trend in airfreight demand, showing a marked weakening of tonnage moving from China to the U.S, the update added.
"The decline in chargeable weight on a 2Wo2W basis was led by the Asia Pacific region (down eight percent), followed by Central and South America (CSA) where the end of the flower export spike for Mother’s Day resulted in a five percent drop in volume."
On a 2Wo2W basis, pricing declined most notably ex-North America to Asia Pacific (down five percent), ex-Asia Pacific to North America (down four percent), and ex-Europe to North America and CSA (both down three percent), the update added. "The slump in container shipping pushed down box rates, making airfreight less appealing to shippers. One stabilising factor was airfreight capacity, which contracted two percent globally 2Wo2W. With the exception of Europe, which registered a one percent increase, all other regions saw capacity decline, led by a five percent drop in the Asia Pacific region."
The coming weeks will likely produce another twist in the plot after the unexpectedly swift pause in the China-U.S. trade war, leading to expectations of front-loading that could stretch reduced container shipping capacity. Above all, the 90 days suspension of elevated tariffs has also reduced the duty on China origin parcels to the U.S., which could trigger a resumption of the use of airfreight. It should be noted, though, that parcels shipped outside postal networks have to undergo customs clearance, adding cost and transit time, which will affect the appeal of using airfreight to ship direct from China to the U.S, the update added.
