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No-tariff shipments popular with Shein, Temu hit US customs speedbump
Source
American Shipper
Post Date
06/13/2024

LOS ANGELES (Reuters) - A new U.S. crackdown on customs brokers handling billions of dollars in inexpensive online shopping orders from giants like China-linked Shein and Temu is likely to cause delivery delays and bottlenecks, industry experts said.
U.S. Customs and Border Protection announced late last week it susped "multiple" brokers from an expedited clearance program for those duty-free, direct-to-consumer imports partly over concerns that contraband was being brought into the country this way. While the agency did not specify a number, customs experts they were aware of up to six susped companies.
The move is part of a CBP effort that includes increased inspections of such packages at U.S. airports and reviews of electronic information submissions by customs brokers.
"All ports of entry are being affected so there really isnt a way to avoid delays," said Chad Schofield, co-founder of U.S.-based e-commerce logistics platform BoxC.
The crackdown comes as more than 1 billion packages, averaging around $50 in value, are fore to arrive in the U.S. this year driven by robust consumer demand for fast-fashion made by Chinese factories, among other things.
E-commerce powerhouse Shein, which is trying to expand its market share before going public, and Chinese-owned e-retailer Temu dep on the expedited clearance process, which is available for direct-to-consumer shipments valued at $800 or less. U.S. brokers handling those packages submit shipping information electronically to CBP, speeding up processing.
Customs brokers that participate in that program handle clearance for 62% of those shipments, an administrative burden that would otherwise fall on exporters or transportation firms, said Cindy Allen, CEO of consultancy Trade Force Multiplier LLC.
Shein could not be immediately reached for comment. Temu said its operations were unaffected.
POLITICAL CONSIDERATIONS
The CBPs action landed amid intense election-year political pressure on the Biden administration to protect U.S. businesses and stem the flow of illegal drugs into the country, said Brandon Fried, utive director of the Airforwarders Association industry group.
Some U.S. lawmakers say the rules allowing duty-free imports on packages below $800 in value give e-commerce firms in China and other nations an unfair advantage over domestic retailers. Critics also ge that the administration has not done enough to stop the countrys deadly fentanyl crisis.
CBP said last week that the susped brokers data entries "posed unaccep compliance risk" and that "bad actors" were exploiting the regulations to move contraband, including materials to make drugs like fentanyl.
The agency did not name the customs brokers.
One of those affected, Illinois-based SEKO Logistics, filed a lawsuit with the U.S. Court of International Trade on Saturday against the action. It claimed CBP failed to give it proper notice of the suspension, specify alleged violations or provide a way to remedy the situation.
SEKO on Thursday said it provided U.S. import services to Shein in the past, but that is not the case now and was not true when it received its electronic submissions suspension letter from CBP on May 20.
CBP also susped SEKO from the agencys Customs Trade Partnership Against Terrorism security program, according to SEKOs lawsuit. Many Fortune 500 companies require their vors to have that certification.
On Tuesday, SEKO said it won conditional CBP reinstatements for both programs.
"We are incredibly disappointed by, and strongly disagree with, the original decision by CBP," SEKO CEO James Gagne said on Tuesday, adding that the company maintained a "99.999+%" compliance rate in the expedited clearance program.
Other companies involved in that program include UPS and DHL Express, who said they had not been susped.


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