Cathay Cargo reports reduced demand out of Hong Kong and China

By Rebecca JeffreyRebecca Jeffrey21 May 2025

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Cathay Cargo has reported reduced air cargo demand from Hong Kong and the Chinese Mainland in May following tariff and de minimis changes, but said volumes from other parts of its network are helping to fill the gap.

Writing in the company’s monthly performance wrap-up for April, chief customer and commercial officer Lavinia Lau gave an early preview into its performance for this month: “Turning to May, we have seen steady replacement cargo from other parts of our network, including Southeast Asia, during the first half of the month amidst reduced demand from Hong Kong and the Chinese Mainland.

“We will continue to closely monitor the ongoing developments in the second half.”

WorldACD data shows airfreight volumes from China and Hong Kong to the US have declined since the end of the de minimis exemption covering Chinese e-commerce packages in early May.

The US and China have since paused their trade war for 90 days, reducing tariffs from 145% to 30%.

Non-postal e-commerce packages from China are subject to the 30% tariff rate while packages being transported through postal networks face a 54% (or a $100 flat fee) rate.

Lau added that “the latest announcements regarding the tariffs between China and the US provide some reassurance to the market in the near term” and said the airline would adjust freigher capacity if necessary.

While it’s not yet clear what impact trade disruption will have on Cathay Cargo’s airfreight volumes this month, in April, Cathay achieved a 13.6% year-on-year increase in air cargo volumes.

Demand for specialist solutions offered by the business continued to grow, said Lau.

Available Freight Tonne Kilometres (AFTKs) increased by 8.9% while load factor decreased by 1.1 percentage points year on year.

In the first four months of 2025, the total tonnage increased by 12.4% compared with the same period for 2024.

Lau said: “Tonnage in April was 10.4% lower than in March, primarily due to the traditional first quarter-end peak in March and the various holiday periods in April. However, our specialist solutions maintained their growth momentum and we saw increased demand for our Cathay Priority solution on the Asia Pacific-United States trade lane ahead of the implementation of trade tariffs.

 

“Demand for our Cathay Expert solution continued to grow, supported by robust exports of semiconductor machinery from North Asia as well as ad hoc demand out of Europe to Hong Kong.”

Cathay’s year-on-year increase in air cargo volumes for April is well ahead of the 4% growth in global volumes for the month that Xeneta previously reported.

In addition to tariff and de minimis challenges, the Association of Asia Pacific Airlines (AAPA) recently called for governments to tackle supply chain disruption that is delaying deliveries of new aircraft, constraining capacity and threatening Asia Pacific trade growth.