On April 2, 2025, the United States announced the cancellation of duty-free treatment for low-value imported products from China, the so-called "small package duty-free" policy below US$800.
The United States' duty-free policy for small packages began in the 1930s. This system facilitates American tourists to bring souvenirs back from abroad and reduce extra expenses.
This policy adjustment by the United States will be a difficult choice for air logistics companies.
We know that my country's air logistics companies, especially cargo airlines with wide-body aircraft, have been booming since 2020, with very good benefits, mainly because they caught up with two opportunities and made two waves of money:
One is the money from the shortage of the epidemic.
Affected by the epidemic, the global supply chain is tight, but Made in China continues to operate, providing the world with various materials. Air logistics companies have a certain advantage in outbound and speed. For a time, "it is difficult to transport goods and it is difficult to find a cabin", and air logistics companies make a lot of money.
The second is the money from cross-border e-commerce.
In recent years, with the development of information technology and logistics, more and more American people have purchased cheap and high-quality overseas goods through online platforms and enjoyed the dividends of the development of trade globalization.
Chinese aviation logistics companies transport cross-border e-commerce packages to the United States and finally deliver them to American consumers to meet their personalized consumption needs, help them reduce living costs and improve their quality of life.
Therefore, wide-body cargo aircraft transportation is in short supply.
Now, Trump has signed an executive order to cancel the "small exemption" clause applicable to low-value packages from China, and no longer allow companies to be exempted from import taxes on international shipments with a retail value of no more than US$800.
From May 2, packages with a value of less than US$800 sent from mainland China and Hong Kong to the United States through the international postal system will be subject to applicable tariffs, and will be subject to a tariff of 30% of their value or US$25 per piece (increased to US$50 per piece after June 1, 2025). This policy adjustment has brought an unprecedented impact on the cost, process and market structure of the aviation logistics industry.
1. Cost surge, profit margin squeezed
For a long time, the US tax-free policy for small packages has provided fertile soil for the development of cross-border e-commerce.
With this preferential policy, Chinese aviation logistics companies have efficiently delivered a large number of cross-border e-commerce small packages to American consumers.
Data shows that the number of packages entering the United States through this policy last year was nearly 1.4 billion, most of which came from China.
As the main force of cross-border e-commerce small package transportation, air logistics has achieved the rapid circulation of goods from China to the United States with its advantages of efficiency and speed.
Now that the "small package tax-free" policy has been cancelled, transportation costs have increased significantly.
Cross-border e-commerce small packages that used to enjoy tax-free benefits are now subject to tariffs, which directly leads to rising commodity costs. For cross-border e-commerce companies that rely on low-price strategies and have meager profits, raising the selling price of goods has become a helpless move to maintain profit margins. However, rising commodity prices will inevitably reduce consumers' willingness to buy, leading to a decline in cross-border e-commerce orders. The reduction in orders has led to insufficient air logistics supply, and the cargo load factor of many cargo flights has decreased, but the transportation cost has not decreased simultaneously. Instead, it has been further diluted due to insufficient cargo load factor, and the profit margin has been severely squeezed, falling into a vicious circle. 2. The customs declaration process is complicated, and efficiency and risks coexist. The customs declaration process has become more complicated and cumbersome, which is another problem brought about by the new policy. The new policy requires mail carriers to report shipping details to the U.S. Customs and Border Protection (CBP) and maintain international carrier bonds to ensure tariff payments. This means that air logistics companies need to invest more manpower, material resources and time to handle customs declaration matters, including sorting and submitting various documents, communicating and coordinating with customs, etc.
The extension of the customs declaration process not only increases the time cost of logistics, but also increases the risk of customs declaration errors or delays. Once a problem occurs, the goods may be detained, further affecting logistics efficiency and customer satisfaction.
Originally, the pursuit of efficient air logistics has greatly reduced its advantages in the face of cumbersome customs declaration procedures.
That is to say, the efficiency and speed advantages of air freight do not exist, and this impact is particularly huge for air logistics companies.
Third, the market structure has changed and industry competition has intensified
From the perspective of the industry as a whole, the cancellation of the "small package tax exemption" policy by the US will profoundly change the air logistics market structure.
Some air logistics companies that originally focused on cross-border e-commerce small package transportation may have to readjust their business direction and seek new market opportunities due to severe impact on their business. And those large logistics companies with comprehensive logistics service capabilities and one-stop solutions may be able to better cope with challenges in this transformation with their resource integration capabilities and diversified business layout, and even take the opportunity to expand their market share.
Industry competition will further intensify, and market concentration may increase. Aviation logistics companies without comprehensive solution capabilities, integrated guarantee capabilities, and upstream and downstream industrial chain support will face greater survival pressure.
The US's cancellation of the "small package duty-free" policy has brought an all-round and far-reaching impact on the aviation logistics industry.
This is not only a severe test of the operational capabilities of aviation logistics companies, but also a deep reshaping of the entire cross-border e-commerce industry chain.
However, aviation logistics is not without opportunities.
Customs data show that China's exports to the United States have dropped from 19.0% in 2017 to 14.7% in 2024.
The proportion of China's exports in emerging markets such as ASEAN, Latin America, and Russia is gradually increasing.
In 2024, China's exports to Brazil will be US$72.075 billion, a year-on-year increase of 22%.
In 2024, China's exports to Russia will be US$115.499 billion, a year-on-year increase of 4%.
Following the industrial chain and trade flows, emerging markets may be new opportunities for air logistics companies.
In the future, we will wait and see where air logistics companies will go!