Executives from FedEx and UPS previously reported a surge in e-commerce shipments from China to the U.S., but this trend may reverse following President Trump's recent tariff changes. The new tariffs eliminate a loophole that allowed low-value goods from China to enter duty-free, which may substantially reduce the flow of these shipments. UPS anticipates a 25% revenue decline in this sector, prompting job cuts. The ramifications could affect not only major carriers but also airlines and smaller logistics companies reliant on this business.
UPS chief executive Carol Tome described the volume of shipments from e-commerce companies selling Chinese goods in the U.S. as explosive, highlighting significant growth in this sector.
FedEx's Brie Carere emphasized that no single carrier can satisfy the entire needs of e-commerce companies, indicating the complexity and scale of the logistics required.
With the new tariffs on low-value shipments from China, the major carriers could see a substantial drop in revenue, particularly from UPS's most profitable trade lane.
UPS forecasts a 25% revenue decline from shipments from China to the U.S. in the second quarter, reflecting the economic impact of the tariff changes.
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