34% Cost Reduction — China+1 Air Freight Strategy.
How a US electronics brand navigated tariff uncertainty by diversifying production to Vietnam — and cut air freight costs by 34% in the process.
The Challenge
A mid-size US consumer electronics company was shipping more than 2,000 kg of finished goods each week. The lane ran by air from Shenzhen to Los Angeles. Section 301 tariffs added 25% to their landed cost. The February 2026 de minimis elimination then required a formal customs entry for every shipment. The old setup no longer worked at that price.
The cost problem was structural, not seasonal. Air freight is already the premium mode, and the 25% duty sat on top of it. Duty is charged on the customs value of the goods, so it travels with every unit. Because the flow was weekly and steady, the same penalty repeated with every booking. There was no slow month to absorb it.
The customs change added work, not just cost. Shipments that once moved under the low-value exemption now needed a full entry. A formal entry needs an importer of record, a customs bond, and an HS code for every line. The invoice has to match what is in the box, and that is a filing discipline the company did not have yet. Here is how the de minimis exemption ended and what replaced it.
The company had already started manufacturing in Ho Chi Minh City as part of a China+1 strategy. Their logistics partner could not match the transit times or the rates they had from Shenzhen. Air freight quotes from Vietnam came in 40% higher than China. Rates follow volume, and a new origin starts with none. On paper, the cheaper factory produced a more expensive shipment.
Two risks sat behind the numbers. The team had no customs expertise for Vietnamese export documentation, and a missing document holds cargo at origin. The second risk was origin itself. Section 301 applies by country of origin, not by port of departure. Moving the box changes nothing unless the goods are genuinely made in the new country.
Our Solution
Suaid Global designed a dual-origin air freight program rather than a hard cutover. A hard cutover has one date, and no room to be wrong on it. The Vietnam plant was still ramping, so a single switch would have put every week of demand on an unproven line. Running both origins kept a fallback in place while the new lane proved itself. It also gave the team time to test one product line at a time.
Capacity came first, because rate and space are the same problem in air freight. IATA-accredited agent partners secured dedicated allotments on Vietnam Airlines Cargo and Korean Air Cargo from Ho Chi Minh City to LAX. An allotment holds pre-booked space at an agreed rate. Spot bookings move with the market and roll when a flight fills up. With the allotment in place, the Vietnam to USA air lane priced competitively against the China lane.
During the transition, the program ran in parallel from Shenzhen and Ho Chi Minh City. Each week the volume was split between the two origins. Shenzhen covered the product lines the new plant could not yet supply. Volume crossed over as each line qualified in Vietnam. That removed the need to bet the whole schedule on one date.
Licensed customs broker partners then ran the full tariff classification analysis. They confirmed that Vietnamese-origin goods fell outside Section 301 entirely, which removed the 25% duty. That outcome rests on origin rules, not on routing. Goods have to be substantially transformed in Vietnam to count as Vietnamese. The classification work is what made the saving defensible on entry.
The last piece was the entry process itself. The broker partners set up formal customs entries to replace the previous low-value shipments. A formal entry needs data before it needs cargo. Importer of record, bond and entry data were agreed before the volume moved. So when the Section 321 exemption was eliminated, the filing route was already in place.
Services Used
How the Program Went Live
Onboarding started with the product list, not the freight. Each item was mapped to an HS code, a factory and an origin. The team then agreed who books, who tenders the cargo and who files the entry. An air shipment can leave within a day of booking, so a gap in ownership shows up fast. Written responsibility at each step is what keeps a new lane from stalling in its first weeks.
The second step was a fixed document pack. Every shipment from Ho Chi Minh City now moves with the same set of documents. That set is the commercial invoice, packing list, air waybill, certificate of origin and the Vietnamese export declaration. The templates were agreed once and then reused. Paperwork that changes from shipment to shipment is a common reason cargo is held at origin.
Operations then settled into a weekly cadence against the allotment. Bookings were placed ahead of the flight cut-off so the reserved space was actually used. Space that is booked and left empty weakens the case for the next one. Pallet build was checked before tender, because air freight bills on chargeable weight. Chargeable weight is the greater of actual weight and volumetric weight, so a badly built pallet costs money.
Two things were adjusted along the way. Nothing was rebuilt in a single week. The split between origins moved product line by product line as the Vietnam plant ramped, instead of on a fixed date. The entry flow replaced the old low-value process before the deadline. That way the customs change did not arrive as a surprise.
The client follows each shipment by milestone rather than by phone call. The milestones are booking confirmed, cargo received at origin, uplift, arrival at LAX, customs release and delivery. Both origins report on the same milestones, through one point of contact. A planner can see where the week stands without asking. That is what makes a two-origin program readable.
The Results
Within 90 days, 80% of the air freight volume had shifted to Vietnam. The move was gradual by design, since the dual-origin setup let each product line transfer when its factory was ready. The rest of the volume stayed on the Shenzhen lane. That kept the fallback alive for the whole ramp. No week depended on a single plant.
Total landed cost dropped 34%. That figure is landed cost, not freight alone. It combines lower freight rates from the allotment, zero Section 301 tariffs and competitive Vietnamese manufacturing costs. Duty, freight and factory cost all feed the same line. Freight rates on their own would not have produced it.
The Section 301 line went to $0 because the country of origin changed and the classification work supported it. Transit from Ho Chi Minh City to LAX averaged 3 days, matching the Shenzhen performance. Cost fell without the service level falling with it. The booked allotment is what protected the schedule during the shift. Space held in advance does not compete with peak-season demand.
The company now ships from both origins based on product line. Milestone tracking runs across both lanes, and licensed customs broker partners file the entries on each. Origin is now a sourcing choice with a known freight and duty profile. The lane, the paperwork and the duty position are already proven on both sides. The tariff exposure that started the project is no longer the deciding factor in where a product is made.
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