The bottleneck traces back to April 5, when U.S. Customs and Border Protection (CBP) implemented a change requiring a formal entry process for all shipments valued above $800. This move followed an order from the previous administration invoking emergency authority for reciprocal tariffs. Previously, shipments valued between $800 and $2,500 could utilize a simpler and faster informal entry procedure. While the reciprocal tariffs on trading partners have since been paused, the alteration to the informal entry rules remains in effect.
In a notification issued to its clientele, DHL detailed that it is currently experiencing multi-day delays for U.S.-bound imports exceeding the $800 threshold. The company explained that the abrupt change in regulations has dramatically amplified the workload associated with filing formal customs entries. Consequently, DHL will temporarily cease accepting business-to-consumer (B2C) shipments within this value range starting Monday until it can expand its customs brokerage operations to effectively manage the increased volume.
"The changes outlined above have caused a significant increase in formal entry clearances, which we are handling around the clock," the parcel carrier conveyed in its message to customers.
Notably, business-to-business (B2B) shipments valued above $800, as well as both B2C and B2B shipments with a value below $800, will not be affected by this temporary suspension, according to DHL.
"DHL Express is working diligently to scale up clearance capacity" and is initiating this shipment pause to ensure it can "maintain the high-quality service commitment" to its customers, the business unit stated in information provided to FreightWaves.
An informal entry represents a more streamlined customs clearance process designed for shipments valued under $2,500. Compared to formal entries, informal entries typically demand fewer documents – often just a commercial invoice and an airway bill – and do not necessitate a customs bond. This simplicity has made it a favored method for numerous e-commerce retailers, as trade compliance experts point out.
Shipments that previously qualified for informal entry are now subject to customs duties based on the United States’ Harmonized Tariff Schedule. This could involve the payment of baseline duties, duties related to tariffs imposed on countries for unfair trade practices, and new emergency tariffs. Furthermore, supporting documentation that may now be mandatory includes proof of the goods’ country of origin, as well as the recipient’s tax identification number (either a Social Security number or an employer ID number).
The challenges for e-commerce businesses and logistics providers are poised to intensify further on May 2. On this date, the U.S. is scheduled to eliminate the duty-free exemption for low-value shipments (under $800) originating from China and Hong Kong. Under current U.S. law, retailers can send one de minimis shipment per day, per individual, with limited documentation requirements. A significant portion of these de minimis shipments originates from China.
The rationale behind ending this benefit, as stated by the previous administration, is that this entry method facilitates the smuggling of fentanyl from China into the U.S. and that the duty exemption gives Chinese sellers an unfair advantage over their American counterparts. Consequently, individual shipments will now necessitate a formal customs entry or be consolidated into bulk shipments.
Interestingly, the potential increase in duties collected from these small-dollar shipments might be limited, given that the average shipment value is around $54, according to CBP data.