The Global Supply Chain has been disrupted by ecommerce parcel flows. What we call "direct order, cross border ecommerce."
Jet Worldwide is committed to staying on top of industry trends and help improve the partnership between government and supply chain providers.
An interesting aspect is the prominence of issues related to international / cross border parcel import flows and delivery. Where international trade has traditionally been measured in terms of commodities, there is a growing recognition of the impact of individual parcels in the supply chain.
- 95% of the worlds’ consumers live outside North America.
- The Internet is the ShIpping Lane of the 21st Century
- Benefits of the Trans-Pacific Partnership, CETA and other Free Trade
- Benefits of Trans-Atlantic Trade and Investment Partnership
Barriers to Trade: Tariffs versus Processes
Barriers to trade have traditionally been defined by high tariffs. In the era of free trade agreements, non-tariff barriers are considered much more consequential than lower duty rates.
The elimination of non-tariff trade barriers were discussed as potential key driver economic growth.
Estimated benefit for elimination of tariffs: ⬆ 1% of Global GDP
Estimated benefit of eliminating non-tariff barriers: ⬆ 6% of Global GDP
The supply chain industry has been pushing for legislative and process changes to ease the import processing burdens particularly as they relate to “other government agencies.” The catch phrase being used was “one window” clearance:
* The concept of one window clearance is to standardize and integrate the import processes across all government agencies responsible for import approvals.
Higher de minimis value for parcel imports but with conditions
The USA leads the world with the highest duty free and tax free "low value threshold" (often referred to as the de minimus value) of $800 USD. In general, the duty free thresholds globally have increased but have more complexities.
For example:
- Tax Free but with VAT: To Europe and the UK the duty free thresholds are relatively high (€150 and £135 respectively) but are not excluded from value added tax. In fact, online marketplaces are mandated to collect VAT.
- North American Free Trade: Canada increased its de minimus value as part of the new USMCA trade agreement, but it applies only to goods shipped via courier from the US and Mexico. Goods shipped via mail and from other destinations do not benefit from the higher de minimus value.
International Shipments Containing Intermediate Products:
Many consider e-commerce imports as being finished products to consumers. It is estimate that over half international imports contain intermediate products or products necessary for the manufacture of a final product. Cross border e-commerce offers efficient support procurement and domestic manufacturing.
Increased Volume of international Direct Order Cross Border Shipments
The nature of international shipments is evolving from large commodity and container shipping to a much higher percentage of individual parcels.
The Internet is the Shipping Lane of the 21st Century and the small businesses continue to depend on international trade. Studies consistently show that small merchants that participate in international trade are much more likely to succeed in the long term.
Parcel post and delivery via an integrator network are the major suppliers of traditional parcel flows but is being replaced by direct export and import by national carriers.
Jet Worldwide provides direct shipping solutions to major international destinations direct from Canada and the USA.
Air cargo - whether for pallets or parcels - represents less than 2% of trade by weight but over 35% of the value of goods transported. Parcels - and direct order cross border orders - require new supply chain solutions.
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