Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
DHL is looking at new markets to increase hiring in the event the Trump administration goes forward with a ban on tax-free, low-value shipments entering the U.S. from China.
John Pearson, CEO of the logistics giant’s DHL Express segment, told Bloomberg Wednesday that the company could hire roughly 200 more international workers to help process shipments through its network.
“If [the de minimis suspension] came back, we would hire more people, not necessarily in our U.S. gateways, but maybe in Malaysia,” Pearson said, without identifying other potential markets for new hires. Malaysia is home to the company’s 140,000-square-foot facility located in Kuala Lumpur International Airport, which includes a fully automated sorting system with a 1.2-mile long conveyor belt that can process 10,000 items per hour.
The 200 potential hires would be a relative drop in the bucket for a department that employs almost 116,000 workers worldwide and 1,300 employees in Malaysia, but speaks to the possible chokepoints created across the supply chain if more goods are instead originating or shipped from other trade partners.
As more American businesses attempt to decouple their supply chains from China, more made-in-China inputs are also likely moving to other countries where they are used in the production of goods that are exported to the U.S.
The potential decision comes in the wake of President Donald Trump’s executive order to terminate de minimis for goods out of China in early February, before pulling an about-face just days later.
That executive order temporarily suspended a tax exemption for packages shipped into the U.S. carrying goods valued at fewer than $800, and was partially designed to curb the flow of fentanyl into the U.S. But such an abrupt move immediately put a burden on the U.S. Customs and Border Protection (CBP), which is tasked with processing and analyzing these shipments, as well as logistics players like the U.S. Postal Service (USPS).
The brief ban was already creating a supply chain backlog for de minimis-eligible and non-de minimis shipments alike, putting companies like DHL in a position where they would need more manpower to handle a bottleneck if it happened again. Alongside the quick de minimis suspension, the USPS halted all inbound shipments from China and Hong Kong on Feb. 4, before reversing the decision just 12 hours later.
Given the “on-again, off-again” nature of Trump’s tariff and other trade policies to kick off the first two months of his presidency, there is still no certainty in whether the administration will halt the tax-free provision again, or whether the plan will get modified.
Pearson told Bloomberg that if Trump instead lowers the de minimis threshold to $250, that foreign e-commerce giants that leverage the exemption like Shein and Temu would be largely unaffected.
DHL’s larger operations are unlikely to see a major impact from a potential longer-term moratorium on the trade exemption. The company only handles a “tiny share” of the nearly 5 million de minimis-eligible shipments the U.S. Customs and Border Protection processes daily, DHL Group CEO Tobias Meyer said in the company’s earnings call on March 6.
“We are not very much in the business of carrying full plane loads of low value, so we don’t have much exposure to de minimis e-commerce shipments into the U.S.,” said Meyer. “In a mindful way over recent quarters, we carry some of those shipments, particularly still on the trans-Pacific. Would the de minimis not be available, those shipments would convert to dutiable shipments, which creates some more revenue for us, but would definitely create some volume pressure as well. Again, our exposure to that trade is not that large.”
Meyer told Bloomberg carriers like DHL could see an increase in bulk imports and more fulfillment of goods in the U.S., rather than overseas.
But that would still require an adjustment period, he said.
“If everybody has, let’s say, three months’ time or so to change their systems, Customs and Border Patrol gets also prepared for that, I do think you can have a relatively smooth transition,” Meyer said.
Global trade should still see growth, but it would be less robust due to the tariffs, Meyer told Reuters in a separate interview.
“That outlook is mainly based on the 75 percent of global trade that does not touch the U.S.,” Meyer said.
The CEO feels the logistics company has an edge due to its market share in faster-growing geographies in markets like India, Vietnam, Indonesia and the Philippines. These areas are forecast to lead in trade growth from 2024 to 2029, according to the DHL Trade Atlas.
Despite the threat of serious tariff increases by the Trump administration DHL’s aggregated baseline forecast calls for global trade volumes to grow in that period at a compound annual rate of 3.1 percent. That would represent trade growth roughly in line with gross domestic product (GDP) growth and modestly faster trade growth than during the previous five-year period (2 percent).
