(Yicai) July 1 -- Bondex Supply Chain Management said the Chinese logistics provider has terminated the lease on a warehouse in the United States because of recent changes in US tariff policy and lower-than-expected demand.

Bondex Logistics Seattle has ended the lease on the warehouse owned by Palmtree Acquisition in the Californian city of Rancho Cucamonga, incurring a USD3.4 million early termination fee, its Qingdao-based parent company announced late yesterday.

The subsidiary penned a seven-year deal in 2022 to lease around 186,960 square feet from Palmtree for its North American warehousing operations. The total rent due from June 1, 2022 to June 30, 2029 would have been USD27.9 million, its parent said.

The move was intended to leverage Bondex's leading sea freight capacity advantages to assist Chinese e-commerce businesses, platforms, and sellers in marketing their products in the US.

But ongoing global economic volatility and changes in US trade policy have driven fulfillment costs well above anticipated revenues, Bondex said. With operational costs now exceeding income, the firm decided to adjust its strategy and overseas warehouse model to lower fixed costs, ensure business sustainability, and maintain competitiveness, it added.

Bondex’s shares [SHA: 603836] closed 1.3 percent down at CNY13.41 (USD1.87) each in Shanghai today. The stock has gained more than 10 percent so far this year.

Overseas revenue at Bondex, which mainly plans and provides standardized logistics services and customized supply chain solutions for importers and exporters, topped CNY987 million (USD138 million) last year, accounting for about 9.6 percent of its total income, according to the firm’s annual financial report.

Editor: Martin Kadiev