Less than a year later, FedEx and UPS executives were talking about how they were dealing with flooding of packages from China to American consumers.
“Explosive” is a way UPS CEO Carol Tomé explained in July about the amount of shipments from e-commerce companies selling Chinese products in the United States. And FedEx’s chief customer officer, Brie Curraire, said in June that “no one can meet their entire needs.”
But that torrent is expected to be trickle-slow after President Trump closed a loophole that allowed him to enter the United States without paying tariffs on Friday.
The business of transporting hundreds of millions of low value cargo on as many as 60 cargo ship flights a day between China and the US can now wither.
Such a decline in shipments could potentially rob companies such as UPS, FedEx and DHL of major revenue streams. Airlines, mainly carriers that carry freight only, and small logistics companies can also suffer. Passenger Aviation also carries some of these packages, which could be a bit damaged.
Last week, UPS said it expects revenue from China-to-US shipping baggage (the most profitable trade lane) to fall by around 25% in the second quarter of the previous year. UPS also announced it would cut 20,000 jobs this year as part of its long-term plan to cut costs, saying “macroeconomic uncertainty” has prevented its 2025 revenue and profit forecasts from updating its 2025 revenue and profit forecasts.
Tome said UPS’s US business from China was responsible for 11% of the company’s international revenue. She suggested that the company could significantly reduce trade tensions when trade between China and the US declined during Trump’s first term, and when it rose between China and the rest of the world.
But as Trump is currently fighting a more aggressive and broader trade war, analysts said logistics companies may not be able to easily compensate for the loss of sales elsewhere, as they were possible during his first term.
“Last time it was a slightly bumpy ride,” said Jay Cushing, an analyst at Gimme Credit. “It took a little while for things to level out, but this would probably take more time.”
The tariffs Trump imposed on Chinese goods during his first term helped to induce the eruption of cheap goods from China.
To avoid these tariffs, Chinese sellers have increasingly sent their products to the US under a loophole that was closed on Friday for imports from mainland China and Hong Kong.
This loophole known as the De Minimis exemption allowed buyers to import goods under $800 without paying customs duties or filling out detailed customs documents. With the exemption gone, American shoppers will have to pay up to 145% tariffs on Chinese products, adding $14.50 to the cost of a $10 T-shirt.
Temu, one of the largest e-commerce companies selling Chinese products, said last week it no longer ships orders from China directly to American consumers. “Currently, all sales in the US are processed by locally based sellers and orders from within are fulfilled,” Temu said in a statement.
As the exemption ends loomed, Wall Street analysts pressed delivery companies to predict the impact.
When asked on the investor’s phone call in March, FedEx chief executive Raj Subramaniam said it was a “minority.”
FedEx spokesman Isabel Rollison refused to provide a more accurate estimate. “From a revenue perspective split by geography, we serve a highly diverse customer base in over 220 countries and territories,” she said in a statement.
DHL, based in Bonn, Germany, refused to say what percentage of its business came from the minimum shipment from China. “There’s only a small portion of the overall US volume and the overall business volume of the US market,” said Glennah Ivey-Walker, a spokesman for DHL.
Ending the exemption could have been worse for the airlines if it wasn’t due to a late change to rules by the Trump administration.
Low value items were set up to be subject to strict customs regulations requiring detailed documentation. However, the administration issued a waiver at the end of last month allowing for more generous handling of products.
Some trade experts said the administration’s change weakened tariff collection as importers deprived them of customs and border protections of the information needed to ensure that they pay the correct import operations.
“Unless you know exactly what the good is, it’s difficult to know what the right potential value is or what the right tariffs should be,” said Lori Wallach, director of the trade program at the American Economic Liberties Project, an organization that seeks to curb the power of large corporations.
However, some customs attorneys said detailed information is still needed even after the waiver.
The exemption came after DHL stopped shipping several of the documents’ requirements, and then spoke with members of the Trump administration.
DHL spokesman Ivey-Walker said the exemption “will not make it difficult to collect tariffs or in any way prevent the government from hampering ongoing efforts to protect borders.” She added that DHL spoke to the administration to highlight the delays that could occur if detailed documentary requirements were enacted.
Airlines could also shake up if low value shipments drop sharply.
Air freight shipments had already slowed down, even before the Friday exemption ended.
By mid-April, air freight traffic from mainland China and Hong Kong to the US had fallen by about 16% from the previous year, according to industry data company WorldACD. Experts say traffic is likely to be slower in the coming weeks.
“We’re looking forward to seeing you in the process of exploring e-commerce and supply chain consulting firm Derek Lossing, founder of Cirrus Global Advisors,” said:
The most active airlines in the e-commerce trade between China and the US include two US freight airlines, Atlas Air Worldwide and Karitta Airlines. Cathay Pacific Airways in Hong Kong. According to some air freight experts, the freight division of Chinese airlines.
US passenger aviation is less vulnerable as it operates relatively few flights between the US and mainland China and Hong Kong.
To make up for the loss, Chinese companies may try to sell more products to their customers elsewhere, such as Europe, Australia, New Zealand and Latin America, experts said.
There are already signs of such a shift. Air freight from China to the US had declined in weeks until expiration of the exemption, but flights to Miami, the hub of flights to Latin America, rose slightly, according to Debuke.
