News / US 'de minimis' rises its head again as shipments hit a billion a year

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When a helicopter has been broken down and shipped in parts under the US de minimis threshold, you know you’ve got a problem. 

The US CBP revealed in its Frontline magazine this weekend that last year a disassembled helicopter arrived in Fort Lauderdale from Venezuela in 21 crates, labelled “personal effects”.  

De minimis shipments, under which no duties are due on shipment values of under $800, account for 92% of all cargo entering the US, said the CBP. Some 4m de minimis shipments, up from 2.8m last year – are now processed each day – more than 1bn a year. 

And about 88% of those come in via air. 

“On any given day, we could receive and process 750,000 to a million de minimis shipments,” said Andrew Renna, assistant port director for cargo operations at JFK Airport, told Frontline. 

“We have limited resources,” he said. “We only have x-number of staff. There is no physical way, even if I doubled or even tripled my staffing, that I could look at a significant percentage of that. So due to the volume, it’s a very exploitable mode of entry into the US.” 

There has been much talk of changing the de minimis threshold. 

“There are a couple of schools of thought,” explained US Airforwarders’ Association director Brandon Fried. 

“On Capitol Hill, you’ve got two camps – the revenue hawks that say ‘look how much money we’re missing by having an $800 de minimis. We could be collecting so much more in taxes’’ – that’s the first one. The second is the fentanyl people, who say ‘look how dangerous it is’.  

“100,000 people were killed in the United States last year because of fentanyl overdoses, and now it’s coming in, they say, through the de minimis.” 

However, he added: “We push back on that. We think it’s really coming in through drug mules and in trucks and things like that over the border, with the volumes we’re seeing right now.  

“Apparently in the United States, we didn’t do a good enough job at mixing the fentanyl precursors together. And so Mexico stole the market from us. And they’re doing it better now out of Mexico.” 

But he explained: “There’s definitely going to be change vis-a-vis China, and trying to rein that in.” 

The Airforwarders Association is currently working with Mike Braun, governor-elect of Indianapolis, who is concerned over fentanyl deaths in the state. 

Mr Fried said: “I’m getting a lot of pressure on fentanyl, so we got involved with the Senate Commerce Committee, which has introduced a bill that will call for inspections of multimodal vehicles – could be trucks, could be airplanes, could be trains or whatever – with adequate notice and precautions for inspections. 

“Our position is that we don’t care about you inspecting, just please don’t do it to hold up commerce. Keep things moving and have adequate cause.” 

Mr Fried said that while “the horse is out of the barn” on ecommerce, there were still some rules that could be tightened. 

“I think it all links back to data. The reality is that this is the age of increased data requirements that are going to be very much a part of security detection.”

He pointed to the success in ACAS security rules, which are thought to have prevented incendiary devices entering US networks, as has happened in the UK and Germany. 

“But the reality is you might not see everything. Why don’t we use data to see trends, and to see some bad guys and where they might be shipping?” 

Mr Fried added that he expects ecommerce to change. 

“I think ecommerce is here to stay, but maybe not the way it looks today. 

“Lowering the de minimis level might have a disruptive impact, although I’ve been told that the average de minimis shipment is only $54 in value, so whatever they moved to, it wouldn’t necessarily change anything.  

“But if they’re going to start curtailing de minimis treatment on goods coming out of China, who knows what that’s going to look like? And all of a sudden the Sheins and the Temus might not be able to trade as freely with the United States as they are right now.” 

And noting increasing use of warehousing by Chinese ecommerce firms, he added: “I think these companies have learned that you better start setting up shop up in the United States, and you better start storing things here.” 

Interestingly, Amazon last week launched a product that mimics the Chinese etailer playbook: Amazon Haul is a low-cost online store, with electronics, apparel etc priced at less than $20. Amazon plans to ship the products to US customers from a warehouse in China, with delivery times of one to two weeks.

And the US is not the only country concerned by cheap Chinese imports. Last month Indonesia ordered Temu to be removed from app stores, while last week, Vietnam threatened to ban Temu and Shein by the end of the month, saying they had not been approved to do business in the country. 

Meanwhile, air cargo stakeholders recommend that the industry stays ‘agile’ to enable it to adapt to rule changes. 

Jan Krems, head of United Cargo, told delegates at Tiaca’s ACF: “Chinese companies have consistently said they’ll prepare for any changes to de minimis, and they have solutions, whatever that means.” 

Tom Bradley, Amazon Air Cargo’s global director, said the etailer was used to dealing with different administrations in the US.  

“Our focus is creating a policy environment for us to innovate on behalf of our customers. We can adapt really, really quickly, because we know that things are going to change in months, and years, so that’s going to be the focus of our team.” 

For more news from Tiaca’s ACF, check out The Loadstar’s vox pop podcast