Less than a year ago, Fedex and UPS managers spoke about how they dealt with a stream of packages from China to American consumers.
“Explosive” is how Carol Tomé, Chief Executive of UPS, described the volume of shipments in July of e-commerce companies that sell Chinese goods in the United States. And the Chief Customer Officer of Fedex, Brie Carere, said about those companies in June: “Nobody can serve his whole needs.”
But that Torrent is expected to slow down to a trick after President Trump had a Maas on Friday that cheap goods from China had allowed to enter the United States without paying rates.
The case of the transport of hundreds of millions of low value shipments on no fewer than 60 cargo ships a day between China and the United States could now wilt.
A decrease in such shipments could deprive companies such as UPS, FedEx and DHL from a large source of income. Airlines, mainly those who only wear load, and smaller logistics companies can also suffer. Passenger aircraft companies can also be wounded somewhat because they also wear some of those packages.
UPS said last week that it expected that the income of shipping packages from China to the United States – the most profitable trading strip – would fall around 25 percent in the second quarter of this year, from a year earlier. UPS also announced that it would reduce 20,000 jobs This year as part of a long-term plan to lower the costs, and said that “macro-economic uncertainty” prevented his predictions for income and profit for 2025.
Mrs. Tomé said that UPS’s China-to-us activities were responsible for 11 percent of the company’s international income. She suggested that the company could take trade tensions and said that when the trade between China and the United States fell during the first term from Mr. Trump, it increased between China and the rest of the world.
But because Mr Trump is now running a more aggressive and wider trade war, logistics companies may not easily sell lost to other places, as they could during his first term, analysts said.
“It was a bit of a bumpy ride the last time,” said Jay Cushing, an analyst for Gimme Credit. “It took a while before things had set the level, but this will probably take longer.”
The rates that Mr Trump imposed on Chinese goods during his first term helped to deposit the gusher of cheap goods from China.
To prevent these rates, Chinese sellers have sent more and more products to the United States under the Maas in the Maas that was closed on Friday for imports of mainland China and Hong Kong.
Known as the De Minimis exemption, the Maas allowed in the rates to import goods worth $ 800 or less without paying rates or filling in detailed customs work. Now that the exemption has disappeared, American shoppers will have to pay rates of no less than 145 percent on Chinese goods, which adds $ 14.50 to the costs of a $ 10 T-shirt.
Temu, one of the largest e-commerce companies that sell Chinese goods, said last week that it no longer sent China orders directly to American consumers. “All sales in the US are now being handled by locally established sellers, with orders fulfilled from the country,” Temu said in a statement.
As the end of the exemption emerged, Wall Street analysts on delivery companies to predict the impact.
When he was asked for an investor call in March which share of the income came from the Minimis shipments, Raj Subramaniam, CEO of Fedex, said it was a ‘minority’.
Isabel Rollison, a spokeswoman for Fedex, refused to give a more precise estimate. “In terms of our turnover distribution by Geography, we serve an extremely diversified customer base in more than 220 countries and areas,” she said in a statement.
DHL, based in Bonn, Germany, also refused to say to say what percentage of his things came from the minimis shipments from China. Glennah Ivey-Walker, a spokeswoman for DHL, said that they represented “only a small part of our overall American volume and our overall business volume on the American market.”
The end of the exemption might have been worse for the carriers if it had not been for a late change in the rules by the Trump government.
The goods of lower value would be set to be subject to strict customs rules that require detailed paperwork. But the administration at the end of last month gave an exemption so that the goods were treated more smoothly.
Some trading experts said that the change in the administration undermined the rate collection because it was the customs and border protection of information that was necessary to ensure that importers paid the correct amount of the import duties.
“If you don’t know exactly what the good is, it is difficult to know what the right potential value is or what the right rate should be,” said Lori Wallach, director of a trading program at American Economic Liberties Project, an organization that tries to curb the power of large companies.
But some customs resembles said that, even after the exemption, detailed information would still be necessary.
The exemption came after DHL stopped making some shipments subject to the paperwork requirement, and after it had spoken with members of the Trump administration.
Mrs. Ivey-Walker, the DHL spokeswoman, said that the statement from a distance “would not make it more difficult to collect rates or in any way prevent the continuous efforts of the government to protect its limits.” She added that DHL had spoken with the administration to emphasize the delays that could occur if the detailed paperwork requirement was enforced.
A airlines can also shake a sharp decrease in low value shipments.
Air freight shipments were already delayed before the end of the exemption on Friday.
By mid -April, the air freight traffic from mainland China and Hong Kong to the United States fell around 16 percent compared to a year earlier, according to WorldACD, an industrial data agency. And experts say that traffic will probably slow down in the coming weeks.
“We expect that no less than 30 to 40 percent of China-Tot-US capacity will come from the market,” says Derek Lossing, the founder of Cirrus Global Advisors, an e-commerce and supply chain consultancy.
The wearers most active in e-commerce trade between China and the United States are two American freight airlines, Atlas Air Worldwide and Kalitta Air; Cathay Pacific Airways from Hong Kong; And the freight departments of Chinese airlines, according to various air freight experts.
American passenger aircraft companies are not that vulnerable because they exploit relatively few flights between the United States and the mainland of China and Hong Kong.
To make up for the losses, Chinese companies can try to sell more goods to customers elsewhere, including in Europe, Australia, New -Zealand and Latin -America, experts said.
There are already signs of such a shift. While air freight shipments from China to the United States were lower in the weeks prior to the expiry of the exemption, flights to Miami, a hub for flights to Latin -America, had risen somewhat, according to Mr Losing.
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