Decline in air cargo capacity between China and the US

Business Business: Air cargo capacity between China and the US has fallen by about one-third this month after the end of the “tax-free exemption”, which was a key revenue source for Asia’s major airlines. The exemption was intended to boost imports of low-value goods, but its removal has hit the number of shipments.

Airlines such as Cathay Pacific, China Southern, Air China and Korean Air had benefited from rapidly growing cargo volumes from China to the US due to e-commerce, with companies such as Shein and Temu leading the way. However, with the exemptions ending, airlines are facing concerns about a drop in cargo demand and a global recession.

Experts say the drop in air cargo capacity could weaken demand in the long term.