kết quả dữ liệu bongdasoNews #101 - E-commerce supply chains set for change with future de minimis cancellation

The White House recently announced that China would no longer benefit from the de minimis exemption, which allowed duty-free imports for packages valued under 0. This decision left the air cargo industry questioning its future, given its significant role in e-commerce logistics.

Shortly after the announcement, the United States temporarily reinstated the exemption, citing the unpreparedness of U.S. Customs kết quả dữ liệu bongdaso Border Protection (CBP) to process duties on an estimated 4 million packages daily. However, the White House emphasized that the exemption would be permanently removed once adequate systems are implemented to “fully kết quả dữ liệu bongdaso expediently process kết quả dữ liệu bongdaso collect tariff revenue.”

The eventual removal of the de minimis exemption will heavily impact e-commerce platforms, particularly China-based companies like Temu kết quả dữ liệu bongdaso Shein. According to John Lash, Group Vice President of Product Strategy at supply chain platform e2open, this move will “reshape international B2C e-commerce.”

“Shein kết quả dữ liệu bongdaso Temu thrived by shipping individual parcels under de minimis, avoiding duties,” Lash explained. “Without this loophole, these companies will need to adapt their business models, likely consolidating shipments into bulk imports kết quả dữ liệu bongdaso establishing U.S.-based distribution centers to manage storage kết quả dữ liệu bongdaso local deliveries.” He added that the shift from individual parcel shipments to a traditional retail import model will pose challenges.

Previously, platforms like Temu kết quả dữ liệu bongdaso Shein benefited from avoiding duties kết quả dữ liệu bongdaso enjoying streamlined shipping. With tariffs of up to 35% kết quả dữ liệu bongdaso complex filing requirements, their profitability will be impacted, forcing a reevaluation of their logistics strategies. Lash also noted that consumers will face higher costs, with prices potentially increasing by 20–50% due to tariffs kết quả dữ liệu bongdaso additional filing fees. Moreover, more complex processing could delay deliveries kết quả dữ liệu bongdaso increase overall costs.

The de minimis exemption, introduced in 1938 with a threshold, was initially designed to support small businesses but has since been exploited by global e-commerce companies. Ram Ben Tzion, CEO kết quả dữ liệu bongdaso co-founder of digital vetting platform Publican, agreed that the removal would lead to higher costs kết quả dữ liệu bongdaso longer delivery times for consumers. However, he suggested that such changes could drive suppliers toward more reliable, safer, kết quả dữ liệu bongdaso ethical practices.

Ben Tzion proposed that a flat fee could simplify duty collection kết quả dữ liệu bongdaso speculated that the de minimis threshold might eventually be reduced to 0 rather than eliminated entirely. “Such measures will hurt Temu’s price-sensitive value proposition kết quả dữ liệu bongdaso Shein’s time-sensitive value proposition,” he said.

The suspension of the executive order already disrupted supply chains, serving as a wake-up call for the industry to prepare for rapid changes. Logistics operators, marketplaces, kết quả dữ liệu bongdaso customs brokers must adjust quickly to the evolving regulatory landscape.

Ben Tzion emphasized that Temu’s business model, which focuses on low-cost items with free shipping kết quả dữ liệu bongdaso returns, will face significant challenges without the de minimis exemption. To remain viable in the U.S. market, Temu may need to shift some manufacturing to the U.S. or other countries kết quả dữ liệu bongdaso ensure greater operational transparency. Companies will also need to comply with national security kết quả dữ liệu bongdaso safety standards, including better identification of sellers.

The broader e-commerce ecosystem will undergo dramatic changes as companies adapt to new regulations. This includes investments in systems to ensure compliance kết quả dữ liệu bongdaso shifts toward bulk shipping kết quả dữ liệu bongdaso localized inventory. The application of de minimis rules kết quả dữ liệu bongdaso duties on Chinese imports is likely just the beginning, with similar policies expected to extend to other countries.

Logistics operators, freight forwarders, kết quả dữ liệu bongdaso carriers will need to prioritize compliance, scaling up their customs brokerage capabilities. Ben Tzion noted that for airlines, air cargo capacity might become redundant due to cost, with e-commerce platforms shifting volumes to ocean freight kết quả dữ liệu bongdaso establishing U.S.-based warehouses.

Data from Rotate shows that two weeks after the Chinese New Year, when factory closures reduce capacity out of China, freighter flights between Asia kết quả dữ liệu bongdaso the U.S. were still down 13%, equivalent to 12 daily flights or 24 freighters. This decline reflects the combined impact of the Lunar New Year holiday kết quả dữ liệu bongdaso the temporary de minimis removal, although disentangling the precise causes remains challenging.

Judah Levine, Head of Research at Freightos, indicated that the looming removal of the de minimis exemption is expected to significantly reduce e-commerce shipments to the U.S. by air. This change will increase delivery times kết quả dữ liệu bongdaso push prices up by as much as 50% for items still shipped by air.

Levine noted that both Temu kết quả dữ liệu bongdaso Shein have already begun adjusting to the anticipated policy shift by encouraging sellers to build U.S.-based inventories kết quả dữ liệu bongdaso exploring alternative manufacturing hubs, such as Vietnam. Freightos data also suggests a slight decrease in airfreight rates in recent weeks, with further declines likely leading up to kết quả dữ liệu bongdaso following the exemption's cancellation.

For express operators like UPS, FedEx, kết quả dữ liệu bongdaso DHL, the regulatory changes will introduce complexities but also create opportunities. Increased workloads kết quả dữ liệu bongdaso costs in customs clearance will drive demand for their services. Ben Tzion added that agile kết quả dữ liệu bongdaso innovative logistics providers could gain a competitive edge by offering digital solutions, unlocking new revenue streams kết quả dữ liệu bongdaso value for e-commerce operations.

Lash concurred, noting that the burden of managing kết quả dữ liệu bongdaso processing standard import filings will weigh heavily on forwarders kết quả dữ liệu bongdaso CBP in the short term, affecting efficiency kết quả dữ liệu bongdaso productivity. Over time, exporters are expected to shift from individual parcel shipments to bulk transportation, which is more cost-effective kết quả dữ liệu bongdaso sustainable in the new regulatory environment.

Source: https://www.aircargonews.net/supply-chains/e-commerce-supply-chains-set-for-change-with-future-de-minimis-cancellation/1079738.article

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