SEOUL (Reuters) -Korean Air reported on Friday a fall of 4% in cargo revenue for the second quarter of its financial year, pointing to market volatility stemming from U.S. tariff policies.

South Korea's largest airline is also one of Asia's largest cargo carriers and has benefited in recent years from rising volumes of e-commerce out of China.

Its cargo revenues rose 14% on the year in the corresponding quarter last year, and have risen on an annual basis every quarter since, which the airline said was driven by the rising e-commerce volumes.

Air cargo shipment volume to the United States from Asia fell by double digits in May since the U.S. scrapped a tax-free exemption for low-value packages from China early that month, Reuters reported, with e-commerce shipments hit hard.

"The airline navigated market volatility caused by U.S. tariff policies by diversifying its product offerings and focusing on high-yield cargo," Korean Air said in a statement.

Semiconductors, batteries, solar cells, and seasonal perishables were among such items, it added.

Quarterly revenue was stable from the corresponding quarter last year, Korean Air said, at 4 trillion won ($2.9 billion) but operating profit fell 3.5% despite lower fuel prices, on rising expenses such as personnel and depreciation costs.

It became one of Asia's biggest carriers after completing a $1.3-billion acquisition of rival Asiana Airlines last year.

($1=1,375.1600 won)