Cross border e-commerce shipments are increasingly transitioning to ocean shipments. Using Section 321 type 86 entries, e-commerce merchants can clear e-commerce orders shipped via individual parcels via ocean freight.
The key issues to consider when shipping international online orders directly to the US:
- Required documentation for parcels shipped to the US
- How valuation affects clearance
- Common carrier shipping options for online orders to the US
- Postal access via postal subsidiaries and commercial carriers
- Section 321 entry via an ECCF, an CFS or by way of a type 86 entry
- Securing parcel order logistics with multiple ports of entry and import processes
Required documentation for parcels shipped to the US
US customs processes for online orders have been streamlined. All international parcel shipments to the US must be accompanied by an invoice for customs clearance. Customs clearance is the umbrella term for the various stages of getting your goods across the American border. It can involve US Customs and Border Protection as well as other government agencies such as the Food and Drug Administration or Fish and Wildlife. The key data points required for an invoice for customs include:
- Date of shipment
- Name, address and telephone number of shipper
- Name, address and telephone number of consignee
- Detailed description of the item(s) being sent
- Value of the item(s)
Note: For online orders, the invoice data can be directly transferred consolidated informal entries to US Customs and pre-alert requirements via API interfaces. Contact Jet Worldwide for assistance with your customs paperwork for your parcel to the US.
Paperwork for other government agencies
There are over 40 US government departments that have unique requirements necessary for your goods to clear customs. The most common of the “other government agencies” involved in clearance of your goods include:
- Department of Transportation (DOT)
- Federal Communications Commission (FCC)
- Environmental Protection Agency (EPA)
- Food and Drug Administration (FDA)
- Fish and Wildlife
Goods that require other government / partner agencies typically cannot be cleared via Section 321 processes. However, Section 321 processes (outlined below) that access partner agencies are potentially available via type 86 informal entries via automated customs brokers software.
How valuation affects import clearance to the US
Customs entries can be broadly defined in 3 categories:
- Under USD 800: Most shipments valued under USD 800 can be easily cleared duty-free. The entry is referred to as a “Section 321.” Have this USD 800 threshold is a great benefit to Canadian parcel shippers to the US.
- Over USD 800 but less than USD 2,500: Informal entry high-volume parcel importers to the US can manage shipments under USD 2,500 with little cost to the consignee. If duty fees do apply, most consignees are charged a fee of around USD 10 plus the applicable duty.
- Over USD 2,500: Formal entries are much more complex and demanding. Many importers prefer to have such shipments cleared by their designated customs broker.
There are three basic ways to import online orders via a duty free section 321 entry. Goods can be imported via Express Consignment Facilities (ECCF and hubs), via container freight stations (CFS) using express processes or via “type 86” via traditional customs brokerage systems. Goods cleared via section 321 type 86 require HS Codes for each order.
Jet Worldwide provides logistics expertise (as evidenced by our industry leading blog articles) and global parcel shipping solutions: Including shipping to and from the US.
Note: Many shipments are subject to approval of other government agencies and - regardless of value - require a formal entry. For food items to the USA, please see note above regarding "prior notice requirements."
Common carrier options for shipping parcels to the US
The main options for sending parcels to the US from Canada include
- Postal options
- FedEx / UPS (including their postal options)
- Shipping via a postal reseller
- Shipping direct to the US for USPS or in-store pickup
Sending with local post options to the US
This service is by far the best value for small shipments and most post offices offer a version of this service. The international postal packet services are valid for goods up to 2 kg and can include surface, air and “packet tracker” options. The packet option’s low cost is due to traditional Universal Postal Union rules that have been adapted for the cross border e-commerce packets.
Postal clearance versus commercial clearance
The postal clearance processes traditional advantage over commercial clearance has largely dissipated with the new section 321 processes outlined above.
All postal imports to the US are now subject to Advance Electronic Data (AED) requirements. Non-compliance will result in refusal at import and potential penalties.
The USPS Global Direct Entry option is a hybrid product that gives international sellers low-cost last-mile postal delivery following commercial clearance (see below).
Delivery to the US via FedEx Canada and UPS
FedEx and UPS dominate the market for delivery to the US and offer access via their impressive air express networks. Along with the local post, FedEx and UPS are well-known options from overseas locations. Their market dominance can mean higher pricing and inflexible processes.
Delivery to the US via FedEx, UPS and DHL US mail options
FedEx and UPS - along with DHL - offer hybrid options of bulk import with final mile delivery via the USPS Parcel Select option. These options ideally integrates air transport within their respective networks, section 321 clearance and last-mile delivery by the USPS.
Postal subsidiaries offering direct postal access
In addition to commercial carriers, major European and Asian postal services have subsidiaries that resell their postal access. These postal subsidiaries take advantage of their membership in the Universal Postal Union (UPU). Even though updated UPU rules has lessened their "postal advantage," these postal groups still offer value added processes for high volume shippers.
Connecting directly with the USPS from international locations
International retailers can connect directly with the USPS for shipments to the US via their Global Direct Entry. Although having to arrange for their own airlift and clearance to the US, retailers can benefit from a direct USPS relationship and unique service options. Jet Worldwide's team consults with international retailers establish secure import processes.
USPS last-mile delivery
The US Post office remains the lowest-cost last-mile delivery solutions used by Amazon, FedEx, UPS and DHL via their Parcel Select service. There are also independent resellers of this and other USPS final mile delivery options. Once the goods are cleared, it is really just a matter of gaining access at the lowest cost.
Section 321 Entries via Express (ECCF), Cargo (CFS) and type 86 entries
Low-cost clearance using standard cargo clearance through a CFS.
The cost advantage of clearance of high-volume flows through Container Freight Stations (CFS) is simply not having to pay a per shipment fee for clearance. In addition, no HS Codes are required.
The disadvantage to using CFS facilities(versus an ECCF) is essentially speed of clearance. The clearance time can become much greater during peak holiday periods.
Disadvantage of using a CFS:
- Slow uncertain clearance
- No weekend clearance
- Inability to manage consolidated informal entries for parcels valued over USD 800
Jet Worldwide can provide e-commerce cross border parcel speakers and a dedicated webinar for your team.
Express clearance via Express Consignment Carrier Facility/ ECCF
E-commerce parcels sent through ECCF’s are most often cleared prior to arrival and available for injection into domestic delivery streams the same day as arrival. ECCF's are subject to express regulations (Part 128 of the Code of Federal Regulations).
ECCF's benefit from express clearance processes by US Customs and Border Protection, but are subject of a per house waybill fee (to "reimbursement" customs for the cost of providing express clearance).
Note: Express consignment regulations are defined in Part 128 of the Code of Federal Regulations.
Section 321 Type 86: HS Code required
US customs / CBP is advancing processes via the automated broker interface (ABI/AMS/ACE) for Section 321 informal entries via entry type “86” . The ACE Entry Type 86 enables duty-free section 321 access for all methods of transport to all ports
Customs has been working on "one window clearance" processes that incorporates the requirements of other government agencies. In customs parlance, they are referred to as "Partner Government Agencies" or PGA's. Type 86 extends the "one window clearance" processes to include low-value section 321.
Online orders are now being cleared via ocean freight using automated broker interfaces (AMS) and type 86 uploads.
Customs Brokers must file a letter of intent with customs and have access to a bonded container freight station (CFS) as the goods are best not left at a carriers facility.
Jet Worldwide helps companies understand the processes, setup technical integration, and arrange for injection into domestic networks.
Port of entry and method of transport for e-commerce parcels
The e-commerce express and cargo individual parcel clearance is currently available mostly via air freight hubs and gateway cities. Major express facilities and hubs with advanced Section 321 processes include:
- FedEx, UPS and DHL Express hubs
- Independent ECCF facilities in Los Angeles, Miami, New York and Chicago
- Cargo clearance (CFS) facilities at major airport gateway facilities
- Type 86 entries at all ports of entry (but access is to a CFS is recommended)
- Border crossing from Canada (airfreighted to Canada and trucked to the border) and Mexico
Hybrid clearance solutions for high-volume parcel flows to the US
Major international retailers are seeking to diversify their processes to build in additional capacity for resilience. This includes repositioning capacity via multiple ports, adding visibility by being in more direct control of clearance processes and enabling a dynamic mix of express consignment, cargo / CFS, type 86, postal and regional last mile options.
Jet Worldwide helps companies understand the processes via the transparent sharing of inside information about processes, carriers, and preferred vendors.