Ecommerce companies are evolving in response to disruptions. More companies are deploying advanced technologies to meet customer expectations, develop stronger relationships with their partners, drive sustainable growth and optimize compliance. Companies that leverage the right technologies, such as e-Commerce Managed Services, across supply chains can improve productivity, margins and competitiveness in a congested market.
The growth of ecommerce offers significant opportunities for shippers to increase profits and reach a wider customer base than ever before. U.S. Census Bureau data shows that e-commerce sales in America have increased from 2.5 percent in the first quarter of 2006 to 8.5 percent in the first quarter of 2016. A significant portion of e-commerce sales are parcel shipments and Section 321 shipments. High-volume parcel shipments, while inherently considered low-value, is an area that will only keep growing as more people use mobile devices to purchase items from around the world.
Section 321 is a type of U.S. shipment that allows for the release at shipments valued at $800 or less. These shipments are free of duty and tax and covers eligible cargo transported by highway, rail, air and ocean carriers. A shipment is eligible for a Section 321 release if the goods do not exceed $800 in value, are not one of several lots under a single order or contract, and are imported into the U.S. by one person per day. Since March 2016, the de minimis value of non-dutiable goods has increased from $200 to $800 to make cross-border trade faster and cheaper.
GeTS eCommerce Managed Services: Clearance Options
There are multiple ways to clear high-volume parcel shipments destined for the U.S. Shippers can send parcels through courier delivery companies/integrators like FedEx, DHL and UPS, send parcels through the United States Postal Service (USPS), or send parcels through an ECCF before the parcels are absorbed by the domestic delivery service.
Shippers who are after reliable and efficient service often use a courier delivery service like FedEx or UPS with their vast integrated networks. Couriers have also developed services like FedEx SmartPort and DHL Global Mail that rely on postal networks to reduce costs for less time-sensitive cargo. Postal networks have steadily been improving over the years, and they are popular with commercial shippers for sending parcels to the U.S. One big disadvantage of using a courier company is the high price. Shippers pay more because these couriers are established and have little competition, so it can be difficult to negotiate pricing for low-margin e-commerce shipments.
Clearing parcel shipments through USPS is generally cheaper than using a courier service, and it is one of the cheapest options if you are shipping items under 2 pounds. Businesses can save on average $2 per Priority Mail parcel compared to UPS or FedEx. USPS charges flat rates for Priority Mail without additional fees like extended delivery or fuel surcharge, and they will ship the box any distance. USPS also provides free packaging.
However, there are downsides to using USPS: tracking issues, longer transit times and unreliability during holidays and high demand periods. Longer transit times can sometimes work for businesses as some customers prefer to wait longer in order to save money.
USPS Global Direct Entry
USPS Global Direct Entry is a collaboration with last-mile carriers that move parcel shipments after U.S. Customs and Border Protection (CBP) has cleared them at the ECCF or CFS. USPS has compiled a list of vendors that are pre-qualified and can help with shipment preparation, domestic label printing and cargo pickup/transport from the facility.
USPS Parcel Select Mail
USPS Parcel Select gives shippers access to the huge USPS delivery network at discounted rates depending on the distance between the point of injection and the delivery location. Even couriers like FedEx use this service to reduce costs.
Express Consignment Carrier Facility (ECCF) processing is another option to clear parcel shipments. An ECCF is either a shared or separate facility authorized by the port director to inspect and process low-value shipments, informal entries, formal entries and OGA (other government agency) shipments. An ECCF is similar to a bonded warehouse that has the authorization and capacity to handle high-volume parcels destined for the U.S.
The shipper has to arrange for parcel shipments to be delivered to the ECCF and have a customs broker or freight forwarder clear Section 321 shipments at the port of arrival. An informal entry may be required to clear the shipments. The shipper or importer must arrange for the transmission of ACE air eManifest data to CBP to comply with regulations.
Following the arrival and preparation of parcels at the ECCF or CFS, the shipper or broker can now arrange for a domestic distribution provider to pick up the cargo from the facility and deliver it to either a courier like FedEX or to the USPS.
Unlike an ECCF, a Container Freight Station means you won’t have to pay a per shipment fee for clearing high-volume parcels. CBP charges $1 per parcel for clearing through an ECCF, but parcels cleared through a CFS are not charged this merchandise processing fee (MPF). However, processing time at a CFS is typically longer and may take up to 4 days due to processes not being fully integrated or automated. In addition, a CFS can’t process parcels valued at over $800, and it can’t process shipments during the weekend.
ECCF + Postal Delivery
One of the most affordable options for processing high-volume parcels and Section 321 shipments is a mix of ECCF and postal delivery. This option is efficient and provides more control for the shipper. Most parcel shipments entering ECCFs are Section 321, so they can be reported to CBP under a consolidated air manifest. An informal entry may also be required from the customs broker.
How GeTS eCommerce Managed Services Can Help
The Section 321 shipment release option in the U.S. can help importers save time and money because this shipment type allows goods valued at $800 or less to enter duty free and without a formal entry. Under Section 321, the consignee can also be the importer and thus bypass the duty for goods purchased outside the U.S., as long as the shipment is valued at $800 or less and only one shipment per day is designated as Section 321. Many importers clear inbound parcel shipments via an ECCF in major airports like JFK, LAX, MIA and SFO.
GeTS eCommerce Managed Services is an alternative to the traditional ECCF process for Section 321 shipments. Importers can clear their parcels with GeTS just like at a regular ECCF, but they get additional airport choices and price options that are not otherwise available.
Benefits of GeTS eCommerce Managed Services:
- More port clearance than any other ECCF
- Zero customs fees per HBL
- Access to four ports in the U.S.
- 24/7 customer support by phone, email and chat
To learn more, visit our e-Commerce Managed Services page or contact us today.
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