Following a year of unexpectedly strong air cargo demand and pricing in 2024, the outlook for 2025 and beyond has become complicated by recent geopolitical events, driven by the arrival of an unconventional and unpredictable new US administration.
The potential implications of higher tariffs and counter-tariffs in the US and other markets, and changes to customs-free ‘de minimis’ rules, are discussed widely within this edition of CAAS, including in the North America report (page 4), the World Cargo Summit conference report (page 52), and several of the contributions within the Outlook 2025 report (page 10).
As various of the contributors highlight in their predictions, which were mostly written in January and February, it remains unclear to what extent the proposed or initially implemented tariffs are intended to be in place long-term, or form the basis of bilateral trade negotiations with the countries in question. But as several contributors observed, it seems clear that international trade will experience a new period of volatility as countries and businesses – and supply chain managers – adjust to new and evolving geopolitical and market dynamics.
The rapid growth of e-commerce air cargo business is also explored in some detail within the North America report, the Outlook 2025 contributions, and in the World Cargo Summit conference report – including the potential suspension of China’s access to US ‘de minimis’ customs exemptions for lower-value shipments to the US, and revisions to European rules. For the US market, there’s already some evidence of big Chinese e-commerce platforms adapting their supply models from ‘direct from China to consumer’ to regional consolidation models. But some believe the ‘direct from China to consumer’ model can continue longer-term, especially where digitalised processes can streamline and verify declarations and compliance of air logistics supply chains.
The digitalisation and streamlining of processes were already being sought by e-commerce platforms and their logistics suppliers, and that will surely now further accelerate. Alongside the efforts of logistics specialists, some leading air cargo handlers and carriers are also developing and expanding their e-commerce handling expertise, including developing specific e-commerce handling products, as highlighted in this edition’s e-commerce handling report on page 60. As well as offering competitive advantage, this may deepen the participation of handlers and carriers in e-commerce logistics supply chains – and increase their attractiveness as partners to e-commerce platforms and logistics specialists.
On the subject of partnership, the willingness of the new Trump administration to walk away from long-term partnerships and alliances has shocked many. But a new era of a highly transactional, strongly nationalist, unilateralist USA seems to be the new reality, and everyone will need to adjust quickly to that new paradigm.
