The international trade sector is currently witnessing a dramatic race against time as exporters scramble to ship goods to the United States before new tariff policies take effect. This frantic "cargo rush" has significantly driven up international air freight rates and triggered a chain reaction across global shipping markets.
Impending Tariff Deadline Creates Market Uncertainty
Dimerco's Asia-Pacific Air Freight Report for August highlights how the approaching August 1 tariff deadline has created unprecedented urgency among shippers. While facing considerable uncertainty about future air cargo plans, exporters are moving goods from Southeast Asia to the U.S. at accelerated rates. The U.S. has issued tariff notices to 25 countries, specifying reciprocal tariff rates that will take effect on August 1, marking the expiration of previously extended tariff suspensions.
"These tariff adjustments will directly impact corporate costs, shipping routes, and market demand," warns Dimerco. "Last-minute changes are particularly disruptive for Asia-U.S. trade lanes and intra-Asia routes."
Operational Challenges Multiply
Kathy Liu, Dimerco's Vice President of Global Sales and Marketing, notes that shippers face extraordinary difficulties in predicting and planning shipping schedules due to the August 1 tariff implementation. The situation remains particularly complex for major manufacturing and shipping hubs including Singapore, India, Taiwan, and mainland China, where final tariff announcements have yet to be officially released.
Compounding these challenges, the annual typhoon season in Southern China, Hong Kong, Taiwan, and the Philippines has brought additional disruptions to shipping schedules, with frequent flight delays further straining already limited capacity.
Southeast Asian Export Surge
In the lead-up to the August deadline, exports to the U.S. from Malaysia, Singapore, Vietnam, Thailand, and the Philippines have shown dramatic increases. Malaysia faces potential 25% tariffs, the Philippines 19%, and Thailand up to 36%. This pre-deadline export rush has directly contributed to rising air freight prices and capacity shortages.
Singapore has experienced similar shipment surges, though its eventual tariff rates will significantly influence its role as Asia-Pacific's shipping hub and overall capacity demands. Vietnam faces unique logistical constraints, lacking direct flights to the U.S. and relying on transshipment through other hubs, where airlines prioritize major routes.
Market Variations Emerge
While U.S.-China tariff negotiations continue with an August 12 deadline (subject to extension), current air freight capacity from China to Asia, Europe, and the U.S. remains weak with stable pricing. However, reduced aircraft payloads due to extreme heat in Northern China have particularly affected U.S.-bound routes.
Market patterns show divergence: while Hong Kong-Asia demand remains strong despite capacity constraints, demand to the U.S. West Coast has declined. Taiwan's market remains volatile pending tariff determinations, though high-tech sectors like artificial intelligence continue driving exports, pushing up Taipei-U.S. direct flight rates.
Complex Market Drivers
While Dimerco emphasizes Southeast Asia's export surge, WorldACD market data suggests the July 14-20 rebound in U.S.-bound air freight tonnage from the region represents recovery from earlier declines rather than purely tariff-driven behavior. This underscores how international air freight markets respond to multiple factors—including tariff policies, supply-demand dynamics, natural disasters, and geopolitical developments.
The current shipping landscape reflects this complexity, shaped by evolving U.S. tariffs, Southeast Asian export patterns, seasonal disruptions, and ongoing trade negotiations. Exporters and shipping firms must maintain vigilant market monitoring and operational flexibility to navigate these challenges effectively.