No-tariff shipments hit US customs speed bump
Los Angeles — A new US crackdown on customs brokers handling billions of dollars in inexpensive online shopping orders from giants like China-linked Shein and Temu is likely to cause delivery delays and bottlenecks, industry experts say.
US customs and border protection announced late last week it suspended “multiple” brokers from an expedited clearance programme for those duty-free, direct-to-consumer imports partly over concerns that contraband was being brought into the country this way. While the agency did not specify a number, customs experts they were aware of up to six suspended companies.
The move is part of an effort that includes increased inspections of such packages at US airports and reviews of electronic information submissions by customs brokers.
“All ports of entry are being affected so there really isn’t a way to avoid delays,” said Chad Schofield, co-founder of US-based e-commerce logistics platform BoxC.
The crackdown comes as more than 1-billion packages, averaging about $50 in value, are forecast to arrive in the US this year driven by robust consumer demand for fast-fashion made by Chinese factories, among other things.
E-commerce powerhouse Shein, which is trying to expand its market share before going public, and Chinese-owned e-retailer Temu depend on the expedited clearance process, which is available for direct-to-consumer shipments valued at $800 or less. US brokers handling those packages submit shipping information electronically to customs and border protection, speeding up processing.
Customs brokers that participate in that programme handle clearance for 62% of those shipments, an administrative burden that would otherwise fall on exporters or transportation firms, said Cindy Allen, CEO of consultancy Trade Force Multiplier.
Shein could not be immediately reached for comment. Temu said its operations were unaffected.
The customs and border protection action landed amid intense election-year political pressure on the Biden administration to protect US businesses and stem the flow of illegal drugs into the country, said Brandon Fried, executive director of the Airforwarders Association industry group.
Some US legislators say the rules allowing duty-free imports on packages below $800 in value give e-commerce firms in China and other nations an unfair advantage over domestic retailers. Critics also charge that the administration has not done enough to stop the country’s deadly fentanyl crisis.
Customs and border protection said last week that the suspended brokers’ data entries “posed unacceptable compliance risk” and that “bad actors” were exploiting the regulations to move contraband, including materials to make drugs like fentanyl.
The agency did not name the customs brokers.
One of those affected, Illinois-based Seko Logistics, filed a lawsuit with the US court of international trade against the action. It claimed customs and border protection failed to give it proper notice of the suspension, specify alleged violations or provide a way to remedy the situation.
Reuters