News / Ready or not, it's the end of de minimis in the EU

Photo: © Ilia Burdun

Today marks the end of the EU’s de minimis exemption for low-value imports, meaning parcels valued at less than €150 will be subject to a flat customs duty of €3, but the outcome of this change will not be known for several months, with possible loopholes emerging.

Termination of de minimis is seen as a tool to reduce the huge influx of cheap Chinese consumables from the likes of Shein and Temu, but several sources The Loadstar spoke to at this week’s Multimodal event indicated that “platforms are ahead of the game on this”.

“The problem is that if the policy is intended to send EU shoppers back to the high street, it is unlikely to work, because even with the €3 and then the €2 charges, the cost will still work out cheaper than buying from the high street,” said one source.

Nico Le Roux, business development director for Glasgow Prestwick, told The Loadstar that in Europe he expected to see online retail platforms move away from the B2C model to a B2B model, with a shift towards “bigger airports with fulfilment centres to deal with this”.

Although he noted that, in the short term he anticipated platforms would shift promotions from Europe and towards the UK, which, while running a consultation on its own plans to end its de minimis exemption, had yet to confirm what it would look like, and if it was happening.

As to how the changes would affect the forwarding sector, those The Loadstar spoke to said it was very much “wait and see”, with director general of Bifa Steve Parker suggesting “we don’t know who is ready for de minimis”.

He added: “I suspect the Industry is ready, but the issue is whether the systems are ready, and with the EU there are questions as to which countries are ready – this is the same every time, as there are 27 countries that need to be ready to go at once.”

Mr Parker would not be drawn into naming which countries might be ready or not for the switch-off, but he pointed out that if there were any countries not ready, there would be a “loophole” for goods coming from China.

Both the €3 and €2 – if it does take effect – will remain in place for at least two years as the EU negotiates a new unified customs regime in the face of the rapid influx of cheap consumer goods from China, propelled by the Covid-induced spike in ecommerce sales.

Forwarders – including big multinationals like DHL – have already experienced the impact of de minimis being terminated when the US scrapped its exemption on goods valued at less than $800 last year, upending forwarder working patterns.

Initially, the US move saw ecommerce volumes plummet, as forwarders and shippers reoriented to the new trading landscape, but subsequently volumes began creeping up before levelling out at 25% down on what they had been.

The view at Multimodal appeared to be that Europe could expect a similar impact from the change – “you’ll definitely see that big immediate drop-off, but after that I expect volumes, as they did in the US, to climb back up to about 75% of what they had been”.