New US de minimus rules not the main threat to ecommerce traffic

© Monthira Yodtiwong

New de minimis proposals in the US could spark fears of reduced air cargo demand, but it is complex data requirements that will prove the biggest hurdle for the global ecommerce market. 

On Friday, the White House said: “The Biden-Harris administration is taking new actions to… address the significant increased abuse of the de minimis exemption, in particular China-founded e-commerce platforms, and strengthening efforts to target and block shipments that violate US laws.” 

The de minimis rule allows shipments valued at $800 or less to enter the US without paying duty and with little scrutiny and saw US imports jump from 140 million packages a year to more than a billion in just 12 months. 

This was largely due to the flood of low-value goods coming from China via ecommerce platforms.  

In the US proposal, goods no longer covered under de minimis would represent some 40% of US imports and include 70% of textile and apparel exports from China. 

However, Ryan Keyrouse, CEO of market intelligence platform Rotate, told delegates at last week’s EU CBEC ecommerce forum: “When you consider ‘what are risks to growth of e-commerce?’, a lot of people talk about the changes to the de minimis in the US. 

“But that change is not what you said is the biggest risk,” he added, referencing Rotate’s September 2024 industry survey on key risks to ecommerce growth in the coming two years. 

My Keyrouse explained that, according to ecommerce data from the US, the average value density of shipments was around $15 per kg. 

“They’re small parcels,” he said. “So, you could have like half a kg, five kg, etc… so that gives you an average value of $7.50/$75. You could keep playing with this for quite some time and you’ll see it’s going to be very difficult to reach $200, $400. 

“So, if the de minimus is decreased from $800 to, let’s say, $165, how much impact is that actually going to have on the volumes? Most things will still fit there.” 

Over 80% of survey respondents agreed that if the de minimis was lowered or a new policy created constraint, “[ecommerce] will find another way”. 

Mr Keyrouse added: “Security concerns from misdeclarations and politically motivated policies were said to be the biggest risks by far.” 

Indeed, 33 respondents listed ‘politically motivated policies’, such as upping tariffs to gain election favour, as their top concern. 24 respondents said security risks would be the biggest setback to ecommerce growth and just 22 listed a change in de minimis. 

The White House’s proposal also promises to “strengthen information collection requirements” to gain visibility into de minimis shipments. 

Requirements would include specific additional data for de minimis shipments, including the 10-digit tariff classification number and the person claiming the exemption. 

“These new requirements would help US Customs and Border Protection (CBP) protect consumers from goods that do not meet regulatory health and safety standards and protect US businesses from unfair competition against imported goods,” it said. 

Further, Consumer Product Safety Commission (CPSC) staff would require importers to file Certificates of Compliance electronically with CBP and CPSC at the time of entry, including for de minimis shipments. 

But one industry executive told The Loadstar: “If you need to supply all the data, you need a lot of permissions, and each country has different rules; in Kenya, it’s against the law to supply people’s data, for example. 

“One recent rule said it needed IP addresses – but what about VPNs? It’s impossible.” 

They added: “The new Transport Canada rule says you can only send if you have a six-shipment relationship with the sender, which effectively means you can’t change to a new forwarder.  

“So, your existing forwarder can charge whatever it likes because you can’t change. Thus, another idiotic government steps forward.”