A CRACKDOWN on e-commerce shipments could see the air cargo industry lose valuable volumes in the dawn of a new era of presidency in the US, writes London's Air Cargo News.
Judah Levine, head of research at Freightos, said there's a strong possibility that a new government led by the soon-to-be president Donald trump will, like the Biden Administration planned, act to close a de minimis exemption for imports into the US with a value of less than US$800.
This exemption allows goods to be imported with no duties applied and with less customs scrutiny.
Policy changes affecting the cost and speed of shipments may threaten the viability of sending e-commerce goods by air, he said.
Under the current plans from the Biden administration, goods that are subject to Section 301, Section 201, or Section 232 trade enforcement actions will no longer be eligible for the de minimis exemption, pointed out Mr Levine.
'I think it's very plausible that a Trump administration would take some kind of similar measure as well. So, if we talk about impact on air cargo, I would think the most likely impact would be changes to the de minimis rules, especially for Chinese imports.'
He added: 'We could see a big impact on air cargo with possibly a big drop in volumes.'
As well as costs, there would be more of an administrative burden and longer door-to-door shipment times, which would make airfreight less appealing because shippers would lose some of the speed advantage.
'De minimis packages can go through customs very quickly, so you could ship something from China to the US, and it could be with the consumer within seven to nine days, whereas, if it comes in with regular reporting requirements, it could take a week or so just to go through customs.
'So, you'd be talking two to three weeks in terms of delivery times, which was probably isn't so palatable to a lot of e-commerce consumers.'
Regarding costs, he further pointed out: 'De minimis packages have very minimal reporting and customs filing requirements, which means they have very low reporting and customs filing costs.
'Not only are you paying the tariffs, which are currently 7-25 per cent but could be higher under Mr Trump, but tariffs might not be the biggest cost. If these are low-value goods, those filing costs would rise from around approximately $15 to $50 which would really challenge the business model of moving something by air.'
SeaNews Turkey
Judah Levine, head of research at Freightos, said there's a strong possibility that a new government led by the soon-to-be president Donald trump will, like the Biden Administration planned, act to close a de minimis exemption for imports into the US with a value of less than US$800.
This exemption allows goods to be imported with no duties applied and with less customs scrutiny.
Policy changes affecting the cost and speed of shipments may threaten the viability of sending e-commerce goods by air, he said.
Under the current plans from the Biden administration, goods that are subject to Section 301, Section 201, or Section 232 trade enforcement actions will no longer be eligible for the de minimis exemption, pointed out Mr Levine.
'I think it's very plausible that a Trump administration would take some kind of similar measure as well. So, if we talk about impact on air cargo, I would think the most likely impact would be changes to the de minimis rules, especially for Chinese imports.'
He added: 'We could see a big impact on air cargo with possibly a big drop in volumes.'
As well as costs, there would be more of an administrative burden and longer door-to-door shipment times, which would make airfreight less appealing because shippers would lose some of the speed advantage.
'De minimis packages can go through customs very quickly, so you could ship something from China to the US, and it could be with the consumer within seven to nine days, whereas, if it comes in with regular reporting requirements, it could take a week or so just to go through customs.
'So, you'd be talking two to three weeks in terms of delivery times, which was probably isn't so palatable to a lot of e-commerce consumers.'
Regarding costs, he further pointed out: 'De minimis packages have very minimal reporting and customs filing requirements, which means they have very low reporting and customs filing costs.
'Not only are you paying the tariffs, which are currently 7-25 per cent but could be higher under Mr Trump, but tariffs might not be the biggest cost. If these are low-value goods, those filing costs would rise from around approximately $15 to $50 which would really challenge the business model of moving something by air.'
SeaNews Turkey
