EU's new import rules reduce China-Hong Kong air cargo volumes to Europe
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Air cargo volumes from China and Hong Kong to Europe fell by 5% and 3% week-on-week following the EU's new e-commerce tariff, WorldACD reports. Spot rates from both origins have tumbled to $3.86 and $4.96 per kg, respectively, as the tariff ended duty-free imports for goods under €150. The declines have pulled the year-on-year rate increase for Asia Pacific to Europe down from 39% to 17% in six weeks.
The EU Tariff Change
The EU ended tariff-free exemptions on e-commerce goods valued below €150 in late July, imposing a €3 per-item charge. The move immediately impacted air cargo demand from China and Hong Kong, the two largest origins for European e-commerce shipments. According to WorldACD, Hong Kong volumes to Europe in July dropped 19% from June and 24% year-on-year, while China volumes fell 3% from June and 6% year-on-year. The week ending August 2 saw a 5% week-on-week decline from China and 3% from Hong Kong.
Spot Rate Collapse
Spot rates from both China and Hong Kong to Europe have been in persistent decline since late June. Hong Kong to Europe rates fell from $5.80 per kg to $4.96 per kg by week 31, while China to Europe rates dropped from $5.43 to $3.86 per kg. Despite the recent drops, rates from Hong Kong remain 7% higher than last year and China rates are up 2%, though that premium has shrunk from the 25% difference seen in the previous three months.
Regional Rate Disparity
While China and Hong Kong rates have softened, spot rates from other Asia Pacific origins remain highly inflated year-on-year. Taiwan rates are up 33%, Vietnam up 39%, and Thailand up 32%. However, the fall in China and Hong Kong rates has narrowed the overall Asia Pacific to Europe spot rate increase from 39% in week 25 to just 17% in week 31, indicating that the two largest markets are dragging down the regional average.
What's Next
The full impact of the EU tariff on e-commerce air cargo flows is yet to be seen, with WorldACD noting that volumes from Hong Kong were already in steep decline before the rule took effect. Whether other Asia Pacific origins will absorb the redirected e-commerce traffic or face similar rate pressure remains unclear.
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EU's new import rules reduce China-Hong Kong air cargo volumes to Europe
