EXTRANS GLOBAL - Air Freight News - Week 07 2025

Air Cargo General

1)  Despite the suspension of e-commerce duty-free benefits, there will be no significant fluctuations in demand from China.

• Recently, the U.S. government announced the suspension of De Minimis duty-free benefits for goods from China, but it has been argued that there will be no significant changes in the Asian e-commerce market.
• During a press conference following the annual performance announcement of global logistics company DSV, CEO Jens Lund stated that the company is handling cargo through online retail platforms like Temu and Shein "very limitedly."
• He mentioned that the recent changes to the U.S. De Minimis regulations would not bring about significant changes in demand for e-commerce platforms.
• Even with the imposition of import duties, he predicts that e-commerce platforms can still maintain a cost advantage over traditional retailers.
• This allows for direct sales without going through intermediaries or wholesalers, he explained.
• He noted that this pricing competitiveness is a crucial factor in growing the e-commerce market. He also suggested the possibility of manufacturers relocating to other countries (e.g., Vietnam) that can continue to benefit from De Minimis, stating that the e-commerce market will continue to grow as it seeks new standards. Similar opinions have already been expressed by other industry experts.
• The vice president of e-commerce at Swissport mentioned, "The average value of e-commerce cargo is $15 to $18, and even with a 20% tax, consumers can bear it."
• He emphasized that China's e-commerce was not created to exploit De Minimis regulations but was formed to provide affordable and fast products that consumers want, predicting that it will still be cheaper than purchasing from retail stores even after duties are imposed.

2)  Outlook on the Air Freight Market Crisis Due to Strengthened U.S. Tariff Policies (1-1)

• The supply chain logistics platform Flexport explained that "goods simply transiting through countries subject to tariffs will not be affected," but warned that additional costs may arise if tariff regulations are not complied with.
• Additionally, it stated, "The goods affected by tariffs are those produced in the respective countries, not goods merely transiting through them," and noted that "there are no retroactive tariffs before February 4, but after that, if the system is not properly established, there is a possibility of retroactive application."
• While tariffs have an overall impact, e-commerce trade has also emerged as a major concern in the air freight industry.
• Yesterday, President Trump announced the elimination of duty-free benefits (De Minimis exemption) for imports from China valued at $800 or less. This measure is expected to apply to Mexico and Canada as well, and it is analyzed that actual implementation of tariffs on these countries will have an impact.
• Last year, the U.S. imported 1.2 million tons of e-commerce goods from China, indicating that e-commerce represents a significant volume in air freight. However, the value of individual items is relatively low compared to other types of goods.
• Industry officials pointed out that more technical details are needed to assess the overall impact on low-cost e-commerce cargo.
• Excluding e-commerce, according to Rotate's data, the U.S. is expected to import 1.1 million tons of general cargo from China in 2024.
• Cargo imported from the EU also reached 1.4 million tons, and the industry is focusing on whether tariff measures will be announced for these countries. In contrast, the import volumes from Mexico and Canada remain relatively low.

3)  Outlook on the Air Freight Market Crisis Due to Strengthened U.S. Tariff Policies (1-2)

• With the implementation of President Trump's tariff policies, significant changes in the global trade market are anticipated, and the freight transport market is also in a state of tension.
• However, it is essential to cautiously monitor the actual impact on the logistics market, as there is considerable skepticism regarding the contraction of demand in the supply chain market and the possibility of economic recession, contrary to media analyses.
• The tariff measures targeting Canada and Mexico have been postponed for a month, but these actions are expected to influence the trend of nearshoring (nearby outsourcing).
• Major media outlets have raised the possibility that companies operating in Mexico may consider relocating their production bases due to increased tariff burdens. However, analyses suggest that relocating to the U.S. would be practically difficult due to high labor costs.
• An economic expert pointed out, "Even if tariffs increase, relocating factories to the U.S. is unrealistic due to high costs; it may be more economical to endure the tariffs and remain in Mexico."
• Some argue that while the U.S. may seem to be countering China for now, it is impossible to artificially block logistics flows, and such measures could negatively impact supply chain stability and economic growth, potentially strengthening China's competitiveness.
• In the e-commerce sector, more stringent regulations, additional paperwork, and customs delays are expected. However, due to sufficient cost resilience despite the elimination of the minimum duty-free threshold, 'Altesh' is projected to avoid significant long-term impacts.
• There is a high likelihood that importers will revert to traditional bulk purchasing and distribution through U.S. warehouses, along with increased use of third-party logistics (3PL) providers for customs and warehouse operations, and expanded utilization of duty deferment programs.
• In fact, Temu has been encouraging Chinese sellers to store inventory in U.S. warehouses since the end of last year, and this trend is expected to accelerate.
• In conclusion, while there is a possibility that e-commerce demand may temporarily contract, the repercussions may not be long-lasting depending on the outcomes of U.S.-China negotiations. Notably, restrictions and regulations on Chinese e-commerce could also impact U.S. companies like Amazon, suggesting that U.S. pressure may be somewhat limited.

4) Daemyung Sonoh Strengthens Offensive Led by Former Korean Air Executive – The Direction of T'way

• Daemyung Sonoh Group is intensifying its efforts to secure management control of T'way Airlines by putting a former Korean Air executive at the forefront.
• Sono International recently filed two injunction lawsuits against T'way Airlines in the Daegu District Court and requested access to the shareholder register on the 22nd of last month, followed by an application for agenda items at the shareholders' meeting on the 31st of the same month.
• After failing to receive a response from T'way Airlines despite submitting a management improvement request, Sono International has opted for legal action. On the 20th of last month, they sent a shareholder proposal for the upcoming regular shareholders' meeting to T'way's CEO, Jeong Hong-geun, and also requested access to the shareholder register.
• Essentially, Daemyung Sonoh Group is actively exercising its rights as the second-largest shareholder of T'way Airlines.
• Notably, with the filing of these injunctions, a list of nine new board members proposed by Sono International has been revealed.
• The names of the remaining eight members, including Chairman Seo Jun-hyuk of Daemyung Sonoh Group, have been disclosed, including three internal directors (Lee Sang-yoon, Ahn Woo-jin, Seo Dong-bin) and four other non-executive directors (Seo Jun-hyuk, Lee Kwang-soo, Lee Byeong-cheon, Kwon Kwang-soo), along with two outside directors (Kim Jong-deuk, Yeom Yong-pyo).
• In particular, the three internal directors, being from the airline industry, are expected to play significant roles in Daemyung Sonoh Group's entry into the aviation sector.
• These three are core members of the 'Aviation Business Task Force' recently established by Sono International, including Lee Sang-yoon as the head executive (Senior Executive), Seo Dong-bin as the responsible executive (Executive), and Ahn Woo-jin as the head executive of Sales Marketing and Development (Senior Executive).
• Lee Sang-yoon and Seo Dong-bin are relatively recent recruits for the Aviation Business Task Force. While the previous positions held by Lee Sang-yoon are not confirmed, he is understood to be from Korean Air. Ahn Woo-jin, on the other hand, joined Sono International several years ago and is also known to have built his career at Korean Air.

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