The speed Versus Cost Conundrum for e-commerce orders is pressing now that the holiday season is here.    Import volumes will again set new records with border crossings and timely US customs clearance less likely.  Last minute rush requests  inevitably lead to a broader discussion on securing a multiple port,  secure on line order parcel supply chain for the next "season of delays."

E-commerce shippers selling to the USA  are increasingly contacting our team for emergency "just in time" clearance and forwarding.       It is around this time that companies are both retrospectively (i.e. wishing they had done it sooner) and proactively (we need to set this up for next year!)  interested in setting up express consignment clearance processes.

Cost Versus Time:  Orders needing express parcel  logistics:

We see two fundamental processes for cross border e-commerce logistics flows:

Traditional ocean/ trucking/ bulk warehousing and distribution:     This method is well established with mature processes involving bulk clearance using traditional customs brokers, H.S. Codes, duty collection and single importer of record.

Cross bordering individual orders:     Individual parcel clearance was previously the exclusive prevue of FedEx, UPS, DHL and the postal service.     However, shippers no longer have to use one of these carriers to get the benefit of parcel clearance processes.

On line merchants can now develop independent import processes using commercial airfreight carriers, multiple ports of entry, express and cargo duty free import and multiple mile delivery options.

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International companies can establish their own proprietary import processes to the USA and be able to choose the best domestic last mile delivery options.   The cost of express clearance can be offset by lower inventory/ warehousing costs, low cost commercial airfreight and duty free import.

 

Express Consignment Facility Explained

Express Consignment Clearance Facilities (ECCF) are given preferential treatment under Part 128 of the US Code of Federal Regulations.     The parcel processes include detailed prior notice of parcel volumes and integrated control.     

Express Consignment operators must reimburse US Customs CBP for the cost of the express clearance.    The cost is now around $1.05 per parcel.    This cost is offset by the duty that might otherwise be applied using traditional formal entry / H.S code / CIF value single entry processes.  But, it also can be strategically avoided.

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Express Consignment but no "per shipment CBP" fee

With the crush of demand from both higher volume cross border orders and higher duty for China origin goods, more companies are seeking "duty free section 321 processes."    The ability to consolidate section 321 (parcels valued less than $800 USD) is increasingly possible outside the traditional ECCF processes mentioned above.     

The ability to clear parcels under section 321 is now available at US Canada border crossing and container freight stations at major gateway cities (including Miami, New York, Chicago and Lost Angeles).    

Why pay Express Consignment Fee when other options are available?

The value of express consignment facilities is being questioned by those very companies who operate express clearance facilities.    US Customs themselves seem conflicted in offering essentially the same express clearance at facilities that are not subject to the  "express reimbursable fee."      

It is best for parcel shippers to the US to set up both express and cargo clearance capabilities to be able take advantage of lower cost for the bulk volume but have the express option available as needed during peak periods.  

Enjoy this holiday season.    And to be better prepared for 2020  peak holiday shipping season!   

 

 

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Written by Tim Byrnes