This week:
- US ends de minimis exemption for imports from China, trans-Pacific air cargo volumes drop
- After handling a surge in imports, US drayage industry prepares for downturn and a later turnaround
- Despite lowered volumes and cautious shippers, US LTL industry secures rate increases in Q1
- Two truckload technology firms join forces to help fight America’s ongoing cargo theft crisis
De Minimis Ends for China-to-US Shipments, Air Cargo Volumes Drop in Response
As previously announced, US President Donald Trump’s administration eliminated the de minimis exemption for imports from China and Hong Kong at 12:01 am Eastern Daylight Time last Friday, May 2. The exemption allowed duty-free imports of small parcels valued under $800. Trans-Pacific air cargo volumes took a sharp downturn in the month leading up to last Friday, as American businesses and consumers now face significant import duties for these lower-value goods.
Data from WorldACD, a Netherlands-based air cargo analytics firm, showed a fourth consecutive week of declining shipment volumes from China and Hong Kong to the US. Kathy Liu, vice president at the Taiwan-based forwarder Dimerco Express Group, was quoted in the Journal of Commerce (JoC) saying that eCommerce shipment volume has plummeted by approximately 50% since mid-April compared to the same period last year.
While ending the de minimis rule aligns with President Trump’s tariff-focused foreign trade policy, attempts to eliminate the exemption began with former President Joe Biden’s administration. Congressional Democrats sent Biden a letter last September urging him to end the de minimis “loophole.” The former president stopped short of ending the exemption altogether but did sign an executive order mandating significant changes to the policy.
Biden and Trump have both publicly said that low-cost, duty-free imports have made it nearly impossible for American companies to compete. Both presidents also expressed concern over fentanyl and other contraband coming into the country via small packages that mostly avoided inspection due to the de minimis rule. While President Trump focused on China and Hong Kong first, he said he will end the de minimis exemption for other countries later this year.
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US Drayage Bracing for Downturn, But Also Preparing for Surge Later This Year
Drayage providers who handled the surge of US-bound cargo booked ahead of President Trump’s new tariffs are now bracing for a significant downturn in business. The slowdown is expected to start in May and could extend into the third quarter, according to a recent report by JoC Senior Editor William B. Cassidy. At the same time, drayage providers are concerned that a surge in imports could disrupt the industry once the US resolves its current trade issues.
“What happens in the third quarter is going to be the big story,” Paul Brashier, vice president of global supply chain for ITS Logistics, told Cassidy. Brashier says that once the US resolves its trade disputes with China and other countries, “there will be a wave of freight that will stress the system. We’re pretty much looking at a similar event as we saw with COVID in 2020. There will be pent-up demand.”
Container shipping lines are already cautioning that a rebound in Asian imports could overwhelm major US ports, Cassidy said. A potential lack of capacity could hamper the drayage industry’s ability to handle such a surge if it does materialize later this year. Cassidy noted that US drayage capacity appears to be gradually contracting from its 2022 peak, as some truck owner-operators have gone to work for more stable, larger carriers.
Ken Kellaway, CEO of the drayage provider RoadOne IntermodaLogistics, agrees that the industry may not be prepared for a post-dispute uptick in import volumes. Kellaway expects volumes to resume as soon as next month, so he’s advising customers that losing drivers over the next 30 to 45 days could lead to weeks-long delays in rehiring. A driver shortage could aggravate capacity issues and potentially leave shippers in a difficult position once imports rebound.
Despite Lower Volumes and Cautious Shippers, US LTL Rates Rise in Q1
Despite a drop in demand as shippers remain cautious due to tariffs, US less-than-truckload (LTL) carriers secured rate increases in the first quarter of 2025, Cassidy said in a separate industry report this week. However, this resilience in the US LTL sector may be facing stronger headwinds.
“Despite an overall decline in freight demand and volume…contractural LTL renewal rates are rising year over year, typically in the mid-single digits, climbing about 4% to 6% on average on an annualized basis in the first quarter,” Cassidy said.
Other stakeholders have recently spoken about the unique state of the US LTL industry. Speaking at a recent SMC3 webinar, Keith Prather, managing partner at Armada Corporate Intelligence, said that despite LTL’s relatively strong showing in Q1, “the first signs of some real deceleration (are) taking place.” He described the current period as a 60-to-90-day window of significant uncertainty that’s caused an industry-wide stall.
Nationwide LTL carrier Saia noted a shift in the market’s demand late in Q1 that carried into April. Saia CEO Frederick J. Holzgrefe said during the company’s recent earnings call that total shipments showed only a modest improvement from March to April. Holzgrefe attributes the current state of the industry to uncertainty around US tariff policy with China, Canada, and Mexico, as well as other macroeconomic factors.
Truckload Technology Providers Team Up in Fight Against Cargo Theft
Two technology providers serving the US truckload market recently teamed up to join the fight against the nation’s cargo theft crisis.
Industry stakeholders successfully lobbied Congress to take action on cargo theft last month. The resulting Combating Organized Retail Crime Act of 2025 (CORCA) will see the federal government form a centralized task force and increase criminal penalties for cargo theft and fraud convictions.
The tech firms Truck Parking Club and GenLogs are now combining their technologies to assist law enforcement investigations.
The partnership will connect Truck Parking Club’s database of hundreds of thousands of commercial vehicles with GenLogs’ network of tracking equipment. Truck Parking Club facilitates parking reservations for drivers and carriers. GenLogs’ primary service utilizes its sensor network to offer freight brokers insights into available truckload capacity.
