UPS Implements New Fees for US-Bound Imports Amid De Minimis Ban and Shipment Halt by Foreign Carriers

UPS is introducing new fees for US-bound imports, including a $2.50 customs processing fee for certain services, as major foreign parcel delivery firms like DHL pause shipments to America. The fees are in response to the US closing its duty-free de minimis provision to the rest of the world, forcing imports to go through a more rigorous customs clearance process.

UPS, the Atlanta-based package delivery company, has announced new fees for international shipments to the United States. Effective September 8, UPS will charge an international customs processing fee of $2.50 per imported shipment for services such as UPS Worldwide Express, UPS Worldwide Express Plus, and UPS Worldwide Express NA1. These services guarantee delivery within three days. The company also introduced an entry preparation charge for U.S.-bound packages from Canada, with fees ranging from $10 to $20 depending on the duty value of the shipment [1].

The new fees are in response to the U.S. closing its duty-free de minimis provision to the rest of the world, effective August 29. This change requires imports to go through a more rigorous customs clearance process, subjecting them to applicable tariffs depending on the country of origin. The de minimis trade exemption, which had allowed packages containing goods valued at less than $800 to enter the U.S. without extra taxes, is no longer applicable [2].

Major foreign parcel delivery firms, including DHL, have temporarily paused shipments to the U.S. due to the uncertainty surrounding the new customs requirements. Other top shipping companies in Europe, Asia, and the Pacific have also implemented similar suspensions. Japan Post, for instance, suspended accepting certain postal items to the U.S., while France’s national postal service, La Poste, also stopped certain shipments due to unclear procedures for collecting taxes [1].

The elimination of the de minimis exemption has already impacted international businesses. UPS reported a 34.8 percent drop in average daily volumes from China to the U.S. following the de minimis closure for Chinese goods in May. FedEx also indicated that most of the impact on China-to-U.S. flights resulted from the de minimis closure [1].

The new fees and suspensions highlight the challenges posed by the U.S. customs law changes. The de minimis exemption had facilitated the growth of low-value imports, which have surged in recent years. However, the White House argued that the suspension is necessary to address illicit fentanyl trafficking, deceptive shipping practices, duty evasion, and abuse by counterfeiters [2].

Investors and financial professionals should monitor the impact of these changes on international shipping and logistics companies. The permanent elimination of the de minimis exemption will affect e-commerce platforms that rely on low-cost cross-border shipments, potentially leading to increased tariffs and logistical hurdles [2].

References:
[1] https://finance.yahoo.com/news/ups-slaps-fees-us-bound-200111449.html
[2] https://texasborderbusiness.com/trump-administration-ends-duty-free-de-minimis-exemption-for-imports/