EXTRANS GLOBAL - Air Freight News - Week 21 2025

Air Cargo General

1) Vietnam blocks Chinese ‘circumvent exports’ due to US tariff pressure

• As the trade war has entered a lull with the US and China agreeing to reduce tariffs for 90 days, US pressure on Southeast Asian countries such as Vietnam, which have served as a conduit for Chinese products, is increasing. -> China's exports to Southeast Asia in April surged by more than 20% YoY,increased in order of Indonesia (37.5%), Thailand (28.11%), Vietnam (22.96%), and Malaysia (14.58%).
• In the same month, ASEAN (Association of Southeast Asian Nations) accounted for 19.12% of China's exports, meaning that one out of five exports was destined for Southeast Asia.
• On the other hand, China's exports to the US continued to decrease: 14.72% in January, 12.91% in February, 12.76% in March, and 10.46% in April.
• China has been 'laundering the country of origin' by exporting Chinese products to the US via Southeast Asian countries. In other words, by 'transshipping' cargo at Southeast Asian ports, Chinese products are disguised as Southeast Asian products and exported indirectly.
• Although the US temporarily lowered tariffs on China to 30%, it is still high compared to the basic tariff of 10% applied to Southeast Asian countries, so this roundabout export is expected to continue for the time being.
• However, since the reciprocal tariff grace period ends on July 7, if no agreement is reached in trade negotiations with the US, reciprocal tariffs on Vietnam (46%), Thailand (36%), Indonesia (32%), and Malaysia (24%) will be revived.
• The US is demanding that Southeast Asian countries reduce the proportion of Chinese parts and raw materials, as well as strictly apply rules of origin that directly block export routes for Chinese products.
• The country most exposed to pressure is Vietnam, which has the third largest trade surplus with the US after China and Mexico. The Vietnamese Ministry of Trade has issued guidelines to issue “Made in Vietnam” certifications and strengthen the examination of imported goods, and Vietnamese Prime Minister Pham Minh Chinh emphasized that “the Vietnamese government is strengthening crackdowns on illegal roundabout exports.”
• Indonesia, Thailand, Malaysia The U.S. also promised to crack down on Chinese roundabout exports in tariff negotiations, but it is cautious about imposing direct sanctions on Chinese companies, as China is its largest trade and investment partner

2) ‘Air Cargo Europe 2025’, one of the world’s top 3 air logistics conferences, to be held in Munich, Germany in June.

• ‘Air Cargo Europe 2025’ will be held in Munich, Germany from June 2 to 5.
• This event is considered one of the world’s top 3 air logistics conferences along with WCS (World Cargo Symposium) and ACF (Air Cargo Forum), and serves as a key platform for discussing future strategies for the global air cargo supply chain.
• This year, it will be held concurrently with ‘Transport Logistic 2025’, the largest logistics automation and transportation system exhibition in Europe, allowing participants to experience the conference and exhibition at the same time and gain practical business opportunities.
• The main issues of the conference will consist of sustainable air logistics strategies, logistics innovation based on AI and automation, and restructuring of the cargo aircraft market. Global airlines, airports, forwarders, logistics IT companies, equipment manufacturers, etc. Various industry experts will participate to share industry trends and seek innovative solutions.
• C-level speakers from global logistics companies such as Hapag-Lloyd, HHLA, DB Schenker, Kuehne+Nagel, DHL, and ÖBB Rail Cargo will present strategies and innovative technologies to respond to the rapid changes in the air cargo market.
• Major domestic logistics companies such as Incheon International Airport Corporation, Korean Air, LX Pantos, and Hanjin will participate in Korea to strengthen the global position of the Korean logistics industry and search for new business opportunities.
• More than 2,500 global logistics companies will participate in ‘Transport Logistics 2025’ AI-based logistics system, smart cargo tracking, carbon-neutral transport solutions, etc.
• A large number of innovative technologies will be introduced.

3) US-China tariff grace period, signs of e-commerce recovery - Air cargo ‘rebound’ vs. continued ‘uncertainty’

• After the US-China tariff agreement, expectations and concerns coexist regarding the possibility of recovery in e-commerce logistics in the air cargo market.
• In the trade negotiations in Geneva, Switzerland on May 10-11, the US and China agreed to impose tariffs of 30% and 10%, respectively, with a 90-day grace period.
• US tariffs on China (30%): 20% fentanyl tariff (maintained) + reciprocal tariff of 10% (down from 125% to 115%p), China tariffs on the US (10%): reciprocal tariff of 10% (down from 125% to 115%p).
• There is still uncertainty as the 90-day grace period is not a complete settlement, but rather a 90-day grace period. However, economic and logistics market experts predict that the possibility of this measure being strengthened again is very low.
• Accordingly, expectations are growing in the global logistics and transportation market for increased trade volume on the US-China Pacific route.
• The tariff grace period provides an opportunity for Chinese e-commerce companies such as Shein and Temu to secure US inventory and adjust their strategies.
• Maritime demand already existed before the tariffs were implemented, with ‘pushing’ demand Unlike the container market, the air cargo market is expected to see a surge in demand, which had been on the wait-and-see side. As tariff negotiations have been concluded, there is a high possibility that large-scale e-commerce cargo using charter flights will resume in China.
• According to Rotate, the supply of cargo planes from China to the US increased by 60% during the 24 hours from the 11th to the 12th, and the supply of air cargo from the US to China and Hong Kong also increased by 35%.
• Before May 2, when de minimis was abolished, about 50% of air cargo transport on the China-US route was low-priced e-commerce products, and after de minimis was abolished, the overall daily average cargo capacity on the route decreased by 39%.
• On the other hand, the Korean air cargo market, which focuses on transshipment at Incheon Airport, is still negative about the recovery in e-commerce demand, and since the supply of charter planes from China is already increasing, the probability of demand passing through Incheon Airport increasing is low.
• Nevertheless, the agreement on tariff negotiations between the US and China has had a negative impact on our air cargo market. An issue that cannot be ignored, a positive interpretation in the short term and mid- to long-term
• The airline's BSA contract policy will be an important. variable that will determine whether the market will grow.

4) T'way's operating loss of KRW 36.7 billion in the first quarter - "European route expansion and exchange rate impact"

• T'way Air announced that it recorded a separate operating loss of KRW 36.7 billion in the first quarter of this year, turning into a deficit compared to the operating profit of KRW 75.3 billion in the first quarter of last year.
• Sales increased by 5.6% from the same period last year to KRW 446.8 billion, the largest quarterly figure since its establishment.
• T'way Air failed to make a profit in the first quarter of this year after recording an annual operating loss (KRW 12.2 billion) last year.
• T'way Air explained that this was due to the introduction of new aircraft for the expansion of new mid- to long-distance routes including Europe, as well as increased investment for continuous growth such as parts maintenance and personnel expansion, which increased the cost of sales. • Also, due to the rise in the exchange rate in the first quarter of this year, the cost of fuel and other expenses paid in dollars by airlines increased.
• A T'way Air official explained, "T'way Air is continuing to diversify its routes around the world and building a foundation for growth."

5) GSA and airline trends

• Korean Air (KE),Resolved to acquire a 10% stake (approximately $220 million) in WestJet (WS) to expand into the North American, Central American, and South American markets
• News from Boeing in the US,China lifted its ban on purchasing Boeing aircraft from its own airlines following the US-China tariff cuts.

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