By Eva Richardson – The Logistic News
The White House’s announcement regarding the end of the de minimis exemption—which previously allowed duty-free imports on packages valued under $800—has sent shockwaves through the air cargo and e-commerce industries. While the U.S. temporarily reinstated the exemption, the Biden administration has made it clear that it will be permanently revoked once U.S. Customs and Border Protection has the systems in place to efficiently process an estimated 4 million packages per day.
Major Disruptions for E-Commerce Giants
The move will directly impact Chinese-based e-commerce giants Temu and Shein, which have relied on the de minimis rule to avoid import duties and complex customs filings. According to John Lash, Group Vice President at e2open, the rule change will reshape international B2C e-commerce:
“Shein and Temu thrived by shipping individual parcels under de minimis, avoiding duties. Now, they may have to shift their business models by consolidating shipments into bulk imports, setting up U.S.-based distribution centers, and transitioning toward a more traditional retail import model.”
Consumers will also feel the impact, as goods ordered from Chinese platforms may see tariff increases of up to 35%, raising retail prices by 20-50%. Lash warned that once the new rules take effect, shipments will require more complex processing, potentially causing delivery delays and increased costs.
Regulatory Adjustments and Industry Response
Ram Ben Tzion, CEO of Publican, believes the elimination of the de minimis exemption is part of a broader push to reform global trade practices, particularly targeting Chinese imports. He suggests that a flat fee structure could be introduced to simplify duty collection and predicts that the de minimis threshold may be reduced to $200 rather than being eliminated entirely.
“The suspension of the executive order caused disruptions across supply chains,” Tzion noted. “Marketplaces, logistics operators, and customs brokers must now rapidly adjust to the new regulatory environment.”
Impact on Logistics and Air Cargo
The policy shift will force freight forwarders, express carriers, and customs brokers to overhaul their processes. Freightos head of research, Judah Levine, noted that the expected policy shift will significantly reduce the volume of e-commerce shipments arriving in the U.S. by air, potentially reshaping cargo flows and price structures:
“E-commerce volumes have kept planes full and air cargo rates highly elevated since late 2023. The de minimis cancellation will increase delivery times and push prices up by as much as 50% for shipments that continue by air.”
Meanwhile, express carriers such as UPS, FedEx, and DHL are bracing for dramatic changes. Ram Ben Tzion stated that while workload and complexity in customs clearance and processing will increase, service providers who adapt quickly with digital solutions will be able to create a competitive advantage.
“This shift will add costs each step of the way. However, agile logistics operators can turn this challenge into an opportunity, unlocking new revenue streams through digitalized customs services.”
The Road Ahead
As the Biden administration moves forward with the elimination of de minimis exemptions, freight forwarders, carriers, and customs brokers must rethink their strategies. Temu and Shein will need to transition away from their existing models and invest in localized warehousing, manufacturing shifts, and bulk import strategies.
The broader e-commerce and logistics industries will also undergo significant transformations, with companies focusing more on compliance, customs processing efficiencies, and supply chain diversification.
For continued coverage of these regulatory shifts and their impact on global logistics, stay updated with The Logistic News.
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