We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Flood of cross-border e-commerce packages challenges customs authorities to keep up, ensure security
newsworthy

Flood of cross-border e-commerce packages challenges customs authorities to keep up, ensure security

April 16, 2018
Toby Gooley
No Comments

The surge in cross-border e-commerce activity is straining the operations of world customs authorities that are processing millions of international packages shipped to consumers with systems and procedures designed to support business-to-business commerce, experts say.

World Customs Organization (WCO) Secretary General Kunio Mikuriya highlighted those challenges earlier this year when he spoke of e-commerce's rapid growth bringing a "tsunami of small packages to the doorsteps of customs administrations and other regulatory agencies around the world." The consequences of this rising tide, which shows no sign of abating, was discussed at length late last week at the 22nd Annual Northeast Trade & Transportation Conference produced by the Coalition of New England Companies for Trade (CONECT).

World customs agencies are accustomed to processing large-scale transactions between established and familiar players. However, e-commerce is changing the landscape. Business-to-consumer transactions often involve a single shipment that can be a "one-off" from small companies that customs authorities do not know to individuals equally unfamiliar. Sometimes, criminal enterprises, or criminal activity, can be involved.

"Low value does not mean low risk," said Amy Magnus, director of customs affairs and compliance for customs broker A.N. Deringer, who spoke at the conference. Product descriptions may be incomplete or inaccurate, and declared values may be understated, Magnus said. Many of the orders fall below the importing country's value thresholds and thus don't require the filing of formal entry documents. Because of that, information provided to customs agencies is minimal, and in many cases, no advance electronic notification is required, she said.

Customs authorities also are under pressure to clear time-sensitive e-commerce shipments quickly, sometimes without sufficient staffing to handle the huge growth in volume, according to Magnus.

For customs agencies, including U.S. Customs and Border Protection (CBP), this situation has created a number of challenges, Magnus said. Chief among them is security. Without access to detailed information, such as the full Harmonized Tariff System (HTS) commodity identification code, or the identity of the buyer—which may differ from the consignee—in advance of a shipment's arrival, agencies are hampered in their efforts to target suspicious shipments, she said.

Another concern is that because formal entries are not required for most of these shipments, governments are not collecting trade data or duties on them. With millions of packages shipping daily, the lack of data and potential lost revenue is significant, she said.

Magnus cited the increase in the U.S. de minimis threshold to $800, mandated by Congress in 2016, as a factor behind the current problems. Some third-party logistics providers (3PLs) have set up fulfillment operations in Mexico and Canada that are "filled with goods, waiting for e-commerce orders," specifically to take advantage of that change, she noted. The 3PLs ship the individual consumer orders in truckloads across the border into the United States, saving their customers millions of dollars annually, they claim.

Because every package on the truck meets the de minimis criteria, no formal entry is required, so no HTS numbers appear on the manifest. CBP does not receive advance electronic notice of the shipments; the driver arrives at the border and hands a paper manifest for potentially 1,000 or more small parcels to the CBP agent.

This places customs officers in a difficult position, said a CBP officer in the audience. "The officer is forced to make a decision: Do we delay the truck and thousands of small packages to inspect them? That would take a whole day." The officer must figure out what to do with that truck with almost no information, no advance notice, and a thick pile of paper to work from, he said.

These and other unanticipated consequences of the higher de minimis level have gotten customs authorities' attention. A WCO working group in December of 2017 issued a proposed framework for standards for cross-border e-commerce, including simplified customs processing, new legislative frameworks, and requiring advance electronic data, among others.

CBP, meanwhile, worked with industry stakeholders on the Commercial Customs Operations Advisory Committee (COAC) to develop an e-commerce strategy, which CBP released in early March. The agency plans to take such steps as enhancing legal and regulatory authorities to better position CBP and partner agencies to address threats, adapting affected CBP operations to respond to supply chain dynamics created by the rapid growth of e-commerce, and driving private sector compliance through enforcement and incentives.

Magnus noted that there are many complex issues associated with e-commerce, and the COAC working group did not agree with everything CBP decided.

Transportation Regulation/Government Parcel & Postal Carriers Safety & Security
KEYWORDS A.N. Deringer Inc. Coalition of New England Companies for Trade (CONECT) U.S. Customs and Border Protection
  • Related Articles

    Curse of the Internet: E-commerce creates new challenges for customs

    DHL unit tests program to manage returns of cross-border e-commerce

    FedEx buys UK last mile delivery firm to boost position in cross-border e-commerce

Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.

Recent Articles by Toby Gooley

Better together

Rightsizing your forklift fleet in uncertain times

National Forklift Safety Day 2020 focuses on safety best practices

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • For container lines and ports, what a difference a year makes

  • Outlook 2021: What’s in store for logistics supply chain?

  • Cushman & Wakefield Brokers Sale of 170 Acres plus Lease for 1MSF Build-to-Suit for Home Improvement Retailer in Commerce City, CO.

  • Capacity challenges will continue in 2021

Now Playing on DCV-TV

2mw 01 18 21 thumb

LTL Carriers Using Yield Management Techniques to Identify New Accessorial Charges

DCV-TV 4: Viewer Contributed
As we head into 2021, shippers are not too optimistic about negotiating rates with their carriers. The reason for this, as highlighted in the three CODE RED Webcasts we've hosted with our friends from CSCMP and NASSTRAC, is that in today's transportation marketplace, shippers are operating in uncharted waters. With...

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing