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Parcel Tsunami Raises Fears of Customs Bottlenecks, Charges

Issued: August 23 2018

The rampant growth of international e-commerce is putting an increasing strain on lift capacity and logistics infrastructure, but it is also overwhelming customs authorities. This is raising fears of delays and possible extra costs.

The US Customs & Border Protection service (CBP) has registered a fivefold increase in parcel shipments over the past six years. The mail facility at New York’s JFK airport now handles about a million parcels a day.

The World Customs Organization has spoken of a “tsunami of small parcels.” It notes that many e-commerce shipments do not require formal entry documents because their contents are below set value thresholds.

In 2016, the US raised the de minimis for the value of parcel shipments that a US resident can receive from overseas in a day to US$800, up from US$200 per day. Observers reckon that this has been a significant catalyst for the rapid growth in international e-commerce packages entering the US.

The CBP is facing this onslaught with insufficient resources. It hired 200 officers this year, but nationwide it is an estimated 2,200 officers short of requirements.

Moreover, it is also tasked with the interception of illegal drugs. For purveyors of illegal substances, e-commerce has been a boon. In the past fiscal year, the CBP seized 71,195 pounds (32,294 kg) of Fentanyl and other opioids, up from 2.4 pounds (just over 1 kg) in fiscal 2004.

For the most part this traffic moves in the mail, where the de minimis threshold means that no formal entry documents are required, which makes the identification of such traffic more challenging.

One industry consultant described the CBP’s predicament as a mission impossible. The agency has signalled that it is looking to propose filing requirements for shipments below the de minimis level. In the absence of binding regulations mandating such e-manifest filings, there have been suggestions that shippers who are unwilling to do so might find their shipments face timeconsuming inspections.

There have been warnings about delays as the CBP struggles under the weight of the e-commerce deluge, but so far there has not been a major problem, said Bob Imbriani, executive vice-president international at forwarder Team Worldwide.

The situation may also hit shippers in the wallet. According to C.A. “Dutch” Ruppersberger, the Maryland Democrat whose Congressional district includes the Port of Baltimore, shippers have been asked to compensate the agency for the cost of additional overtime shifts at the port. At a Congressional hearing in April, CBP Commissioner Kevin McAleenan said that the agency is seeking increased immigration and customs user fees to generate funds.

Meanwhile McAleenan is looking for better tools to deal with the situation, from better data analytics capabilities in the coming Automated Commercial Environment and investment in new, non-intrusive screening technologies to a known shipper programme for e-commerce.

Improved cooperation with other agencies and industry is another element. Imbriani said that the CBP has been trying to impress on brokers and forwarders that they form the first line of defence against illegal shipments and to make sure that everything is done properly. 


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