The Strategic Advantage of Express Consignment for de minimis e-commmerce.
In the whirlwind of uncertainty regarding changes to section 321, we are advising shippers to build express consignment processes to their logistics processes. The exponential growth of Section 321 de minimis imports have been a boon for packages originating from everywhere but most notably from China. The bipartisan position of US government regulators is to place additional restrictions. Amidst this landscape, establishing an express consignment import process not only seems wise but, arguably, necessary for importers aiming to stay ahead in the game.
Secure your e-commerce imports to the USA
Become aware of 19 CFR Part 128
Title 19 of the Code of Federal Regulations (CFR), Part 128, outlines the regulations on "Express Consignments". The section sets forth the operational requirements for couriers and facilities., it is through these regulations that - in my view - Customs and Border Protection (CBP) seeks to strikes the right balance between efficiency of trade and integrity of U.S. customs controls.
Establish Integrated Control
In the context of 19 CFR Part 128, "integrated control" refers to the operational coherence operators must maintain across their various transport modes and procedures. This encompasses the carrier’s ability to manage cargo movements from export to import. This level of control provides a level of accountability that is lacking in Type 86 entries.
The term “closely integrated administrative control” requires operators to "exercise a high degree of control over the shipments, particularly in regard to the reliability of information supplied for Customs purposes." This control also necessitates substantial ownership between the US company and their foreign affiliate.
Become an Express Consignment Operator
Approval is that the port level and requires a customs bond. Being an express consignment operator goes hand-in-hand with having integrated control..
Establish a relationship with independent facilities
As FedEx UPS and DHL facilities serve volumes within their systems, you should look for independent facilities, such as IBC and others. These independent facilities provide access to independent carriers and mostly located at Gateway cities. most notably JFK, Los Angeles, Chicago and Miami.
The challenges of using express consignment processes
Per HAWB fee of $1.27 (and life to increase)
Well, the express consignment processes work incredibly well, they also come at a cost of over a dollar per shipment charge by US Customs. The current charge is $1.27 per house air waybill.
Express imports must arrive via air
Express consignment, as a name implies, applies only to urgent shipments that arrive via air. as such trucking and ocean are not an option for these processes.
Having to use a third-party ECCF versus your own facility
CBP approval to get your own ECCF is exceedingly difficult. such approval is officially at the port level. And if you get approval, the demand regarding the build out of the facilities themselves is extremely costly. For these reasons, it is best to start out by using an existing facility. the leader in this area is IBC, but there are other options, especially to the major port of JFK and LAX. I am familiar with most if not all of these operators and can tell you they all work well.
History of Express consignment: Doing e-commerce before e-commerce was a thing
Express consignment clearance has been a thing for decades. the part 128 was designed to assist with a very specific part of cargo which was express. At the time, having individual house airway bills that needed immediate clearance was considered a unique requirement that was a part and separate from the standard import processes.
But of course, e-commerce import changed the game. but we're customs allowed unfettered access via type 86 they maintained the necessary, integrated control and airway bill self fund mechanism of express consignment. I believe that the discussion of section 321 will involve different differentiation between those arriving via express consignment and everywhere else.
When there was a threat of the government shut down, express consign facilities were kept open as they are considered critical. Even more critical than general custom import clearance.
ECCF Per HAWB a Good Thing?
Having the per house airway bill fee can , of course, be viewed as a negative. On the plus side, it provides a counter to the argument that CBP does not have the resources for inspection. This mechanism is a funding mechanism and a good model to be used across all e-commerce imports. This also counters, the narrative that e-commerce imports are getting a free ride from customs.
Proactive Compliance is a Good Thing
Whether or not you support changes in the section 321 processes, everyone agrees that something needs to change. To stay ahead of these changes I recommend implementing express processes. I suggest building these processes and importing these goods through the express processes. The additional expenses, minimal and the added capability could prove invaluable.
Implementing these processes are not overly costly, might help and will always be there if needed.
Feel free to contact our team for an initial consultation.
