Daily Management Review

Temu's And Shein's Popular Non-Tariff Shipments Hits A Traffic Jam At US Customs


Temu's And Shein's Popular Non-Tariff Shipments Hits A Traffic Jam At US Customs
Industry analysts predicted that a recent U.S. crackdown on customs brokers processing billions of dollars' worth of low-cost online shopping purchases from behemoths like China-linked Shein and Temu would result in delivery delays and bottlenecks.
In part due to worries that contraband was being imported into the nation through these brokers, U.S. Customs and Border Protection stated late last week that it had stopped "multiple" brokers from an accelerated processing programme for such duty-free, direct-to-consumer imports. Experts in customs said that although the agency did not give a figure, they were aware of as many as six suspended businesses.
This action is a component of a CBP initiative that also involves reviewing electronic information submitted by customs brokers and conducting more inspections of similar items at American airports.
"All ports of entry are being affected so there really isn't a way to avoid delays," said Chad Schofield, co-founder of U.S.-based e-commerce logistics platform BoxC.
The crackdown coincides with projections of over 1 billion shipments, valued at an average of $50, arriving in the United States this year due to strong consumer demand for fast-fashion manufactured in Chinese factories, among other things.
The faster clearance procedure is accessible for direct-to-consumer shipments valued at $800 or less, and is relied upon by Chinese-owned e-retailer Temu and e-commerce giant Shein, which is attempting to increase its market share prior to going public. In order to expedite processing, U.S. brokers handling those items electronically send shipping information to CBP.
According to Cindy Allen, CEO of consulting firm Trade Force Multiplier LLC, 62% of those shipments are cleared by customs brokers who are a part of the programme. Exporters or transportation companies would not be responsible for this administrative burden otherwise.
Shein was unavailable for comment at the time of writing. Temu reported no impact on its business activities.
According to Brandon Fried, executive director of the Airforwarders Association industry organisation, the Biden administration was under tremendous political pressure during the election year to defend American companies and stop the importation of illegal narcotics. This pressure led to the CBP's action.
Legislators in the United States claim that e-commerce companies in China and other countries unfairly benefit from duty-free imports on shipments valued under $800. The government is accused by critics of not doing more to halt the fatal fentanyl problem across the nation.
A week ago, CBP declared that the data submissions of the suspended brokers "posed unacceptable compliance risk" and that "bad actors" were using the restrictions as a means of moving contraband, including ingredients for fentanyl and other narcotics.
The customs brokers were not identified by the agency.
SEKO Logistics, an Illinois-based company that was impacted, filed a lawsuit against the action on Saturday in the U.S. Court of International Trade. It stated that CBP did not provide it with enough notice of the suspension, detail the alleged infractions, or offer a chance to resolve the issue.
In January 2023, SEKO disclosed to Business Insider that it oversaw Shein's and other e-commerce clients' transportation needs. The business did not say if Shein's computerised customs filings were handled by them.
Additionally, SEKO claims that CBP removed him from the organization's Customs Trade Partnership Against Terrorism security programme. That certification is a requirement for many Fortune 500 businesses when hiring contractors.
SEKO announced on Tuesday that both programmes' conditional CBP reinstatements had been granted.
SEKO CEO James Gagne stated on Tuesday, "We are extremely disappointed by, and strongly disagree with, the original decision by CBP." He also mentioned that the firm kept a "99.999+%" compliance rate in the expedited clearance programme.
UPS and DHL Express are two other businesses that are a part of that programme; they have said that they have not been halted.