Less than a year ago, executives at FedEx and UPS were highlighting the significant increase in packages arriving from China destined for American consumers.
In July, UPS CEO Carol Tomé described the surge in e-commerce shipments from Chinese sellers as "explosive." Similarly, FedEx’s chief customer officer, Brie Carere, noted in June that no single carrier could fully meet the demand from these businesses.
However, this high volume of shipments is anticipated to decline sharply after the recent closure of a tariff exemption that previously allowed inexpensive goods from China to enter the U.S. duty-free.
The transportation of hundreds of millions of low-value parcels, supported by as many as 60 dedicated freighter flights daily between China and the United States, now faces a significant downturn.
Such a reduction in shipments is expected to impact revenue streams for logistics giants including UPS, FedEx, and DHL. Cargo-only airlines and smaller logistics providers are also likely to feel the effects, while passenger airlines may experience some decline since they also transport a portion of these packages.
Last week, UPS projected a roughly 25 percent decrease in revenue from China-to-U.S. shipments—the company’s most profitable trade lane—during the second quarter compared to the previous year. Additionally, UPS announced plans to cut 20,000 jobs this year as part of a broader cost-reduction strategy and cited “macroeconomic uncertainty” as a reason for withholding updated forecasts for 2025 revenue and profit.
