In-depth Analysis of Air Freight Forwarding Industry Amid Trump's 2025 Tariff Hikes
In April 2025, former US President Trump announced a tariff increase on Chinese goods from 104% to 125%, compounded by a prior 20% levy imposed due to fentanyl issues, resulting in a total tariff rate of 145%. This policy has triggered severe disruptions in the global air freight forwarding sector, particularly impacting Sino-US trade routes.
1. Market Imbalance & Freight Rate Volatility
Post-tariff implementation, Shanghai Port data reflects market panic: US import bookings plummeted from 516,000 TEUs to 169,000 TEUs in the first week of April, with Chinese cargo volume shrinking 63.5% to 54,000 TEUs. South China forwarders report a projected 90% decline in general air cargo, while e-commerce parcels remain buffered by T86 policy exemptions.
Freight rates exhibit "short-term dislocation": TC Index data shows the Baltic Air Freight Index (BY00) dipping 0.1% w/w as of April 7, yet structural divergence persists. The Shanghai outbound index (BY80) surged 5.4% YoY, underscoring rigid demand for remaining cargo. Notably, tariffs on sub-$800 parcels escalated from 30% to 90% (phased implementation post-May 2), directly targeting 60% of civil aviation cargo volume.
2. Supply Chain Disruption & Logistics Reconfiguration
- Breakdown Risks: Detroit ports are clogged with Canadian-made vehicles due to 25% steel/aluminum tariffs, disrupting parts supply. Amazon has canceled orders from Asian suppliers, prompting some Chinese shippers to abandon in-transit cargo.
- Capacity Adjustments: Major Chinese carriers slashed US freight flights, while the Transpacific Alliance (ONE/HMM/Yang Ming) suspended new route launches. Hong Kong Airport data reveals a 42% w/w drop in air forwarding document issuance in early April, with forwarders halting quotations.
- Market Diversification: Chinese manufacturers are accelerating shifts to the Middle East and Latin America, with one automaker relocating 30% of capacity to Mexico. The EU demands US rollback of steel/aluminum tariffs within a 90-day grace period, threatening retaliatory measures.
3. Forwarder Survival Strategies
- Risk Hedging: A leading forwarder implemented a "tariff cost-sharing model," transferring 15% of duties to US clients via FOB terms. Some firms now offer "dual-track pricing" with tariff escalation clauses.
- Service Innovation: Shenzhen forwarders launched "tariff-exempt routes" via third-country transshipment. Shanghai enterprises developed "dimensional weight insurance" for lightweight cargo.
- Digital Transformation: Forwarders utilize COSAC systems for real-time flight tracking, while one firm achieved "documentless customs clearance" via blockchain, slashing clearance time from 72h to 8h.
4. Long-Term Industry Trends
- Trade Pattern Reshaping: Global effective tariff rates now exceed 1930s Smoot-Hawley levels, driving supply chain "decentralization." US importers are pivoting to Vietnam (46% tariff), Thailand (36%), and other nations.
- Technical Barrier Escalation: Stringent air transport requirements for dangerous goods (e.g., lithium batteries) necessitate IATA-certified handlers. Electronic air waybill (AWB) adoption has reached 89%, with paper documentation plummeting 63%.
- Policy Intensification: The Trump team proposes "Tariff Reciprocity 2.0," eyeing 100% duties on EU autos. The EU is preparing carbon border taxes under its CBAM framework.
This analysis underscores the profound systemic shifts reshaping air freight forwarding, as geopolitical tensions intersect with technological and regulatory transformations.
