No-tariff shipments popular with Shein, Temu hit US customs speedbump
Send a link to a friend
[June 06, 2024] By
Lisa Baertlein and Lisa Barrington
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 suspended
"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
suspended 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 isn't 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 forecast to arrive in the U.S. this year driven by
robust consumer demand for fast-fashion made by Chinese factories, among
other things.
![](http://archives.lincolndailynews.com/2024/Jun/06/images/ads/current/werth_sda_PROMGRAD_2024.png)
E-commerce powerhouse Shein, which is trying to expand its market share
before going public, and Chinese-owned e-retailer Temu depend 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 CBP's 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, executive director
of the Airforwarders Association industry group.
[to top of second column] |
![](../images/060624PIX/busine93.jpg)
Shein logo and their web shop are seen in this illustration taken,
May 16, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
![](http://archives.lincolndailynews.com/2024/Jun/06/images/ads/current/graue_lda_preowned_051324.jpg)
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 charge that the administration has not done enough to stop the
country's deadly fentanyl crisis.
CBP said last week that the suspended brokers' data entries "posed
unacceptable 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 told Business Insider in January 2023 that it managed
transportation for Shein and other e-commerce clients. The company
did not specify whether it handled electronic customs filings for
Shein.
CBP also suspended SEKO from the agency's Customs Trade Partnership
Against Terrorism security program, according to SEKO. Many Fortune
500 companies require their vendors 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 suspended.
(Reporting by Lisa Baertlein in Los Angeles and Lisa Barrington in
Seoul; Editing by Cynthia Osterman)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
![](http://archives.lincolndailynews.com/2024/Jun/06/images/ads/current/ldn_smallsda_BUSINESSMAG_2023.png) |