There has been reports recently of a high level of fraud for packages imported from China for delivery by the USPS. Officials are uncovering a systematic effort with literally tons of packages and millions of dollars of counterfeit labeled packages. Reminding us all of the old axiom, if the rate is too good to be true.. it probably is not true.
Industry professionals have commented that fraudulent USPS labels are commonplace on Chinese social media platforms. Labels that sell first class package priority mail up to 5 pounds, no zone for as low as $5.
Strengthening your team - even if you are a team of one! Learn about unique options to regional, national and country specific specialists. Contact our team for an initial consultation.
International companies - particularly in low manufacturing countries - are able to take advantage of duty free import to the USA for shipments valued under $800 USD. This import advantage has translated into millions of individual packages imported daily for delivery by the USPS.
Overseas parcel volume has become more important to the USPS as Amazon, FedEx and UPS continue to shift volume away from postal "parcel select" services.
Understanding Section 321 and importing to the USA
Most USA clearance facilities focus on the import clearance process as sellers in China prefer to pre-label their shipments. Once imported, shipments are most often given to postal consolidators for delivery via the USPS.
But the price of shipping from China often seems less than the cost of shipping in the USA. This discrepancy was largely resolved with new postal (UPU) rules.
Yet, accounts below market delivery costs from China to the USA persist due to the use of fraudulent USPS labels.
Benefit from USPS access direct or via cross border processes: Contact Jet.
Postal counterfeiting is well known but there may be fraud at a scale never before realized. The potential fraud could make a recently settled multimillion dollar case seem small by comparison:
A guilty plea in federal court of "conspiring to engage in a wide-ranging postage counterfeiting, forging, and tampering scheme that, over the course of multiple years and more than 160,000 packages..."
Some posts from online postal forums and industry professionals regarding USPS fraudulent shipments:
Accessing Duty Free Import via Section 321 Entry processes: Video
The fraud likely is a result of a fraudulent "postal evidencing system*" and strategic insertion to a USPS processing facility.
* Postage Evidencing Systems authentic and print USPS shipping labels.
It is the job of the U.S. Postal Inspection Service to investigate such fraud. The complicating part is that the labels were likely produced overseas. The shipments were likely properly cleared and forwarded via a US agent. Taking action against the offending party in overseas is unlikely. Taking action against the USA importing company would involve proving complicity in the scheme.
The reality is that foreign sellers can access competitive USPS rates legitimately. We work with companies globally to build secure logistics processes. Overseas retailers can offer a virtual presence and sell directly to USA consumers.
US clearing agents and facilities are primarily responsible to US Customs. Packages they clear are most often pre-labeled with a USPS, FedEx or UPS label. Their involvement in last mile delivery is minimal and often just transferring shipments to a USPS specialized carrier.
USA import clearance facilities primary focus is on US customs import compliance. Many partner with either FedEx, UPS or USPS specialists.
The recent fraud likely results from fraudulent labeling coupled with strategic injection at USPS processing centres
We believe a multiagency task force will take up an investigation (and likely already has). No matter how or where, mail fraud is stealing money from the U.S. government and American taxpayers. It also perverts the market making it difficult for legitimate carries, facilities and logistics providers.
At Jet Worldwide, we advise shippers to ensure their solutions are scaleable. There is incredible legitimate opportunity via section 321, multiple port injection and low cost USPS final mile delivery.
Our team only works with industry leaders who can provide scaleable solutions with regulatory expertise and approvals.
In this case, it is not that fraud is a problem. What may be surprising is the scale in which it is happening for below market cost shipping from China.Again, if it sounds too good to be true, it probably is!
JetWorldwide.com