Coalition of Services Industries

Private express carriers' vs post's treatment of packages inbound to the US: Security risks and customs concerns

On behalf of the Coalition of Services Industry (CSI), a leading trade association representing the American services economy, Copenhagen Economics has conducted a study, released today, that revealed a security gap in U.S. infrastructure related to packages that are inbound to the United States and that packages sent via Posts lacked any customs declarations.

Copenhagen Economics was engaged by CSI to assess how international posts and private express carriers are complying with customs and advance electronic security data submissions for packages and large envelopes inbound to the U.S. The study was completed in the first half of 2015 and involved more than 200 shipments into the U.S. from 10 representative countries, which are key trading partners with the United States. Half of the sample was shipped via international postal operators (e.g. China Post, Canada Post) and half by express carriers (e.g. FedEx, UPS).

The study also looked at the customs and duties collected on packages shipped into the U.S. from both postal operators and private express carriers. Express carriers are required to collect information from the sender detailing the items being transported. In the study, the express carriers were found to have made customs declarations 98 percent of the time. International postal operators could not verify whether any customs declarations were submitted and $0 duties were collected. 

The study estimates that in 2014 at least 170 million flats and small packages were shipped through postal operators worldwide into the U.S. and then to their final destination through the U.S. Postal Service. Items worth over $200 are by U.S. law subject to duty and the number of package shipments will continue growing as the rise of e-commerce endures; yet this study found that none of the international postal shipments surveyed submitted any electronic data detailing the items being sent. The lack of intelligence about postal packages crossing over America’s borders seems to represent a real security and public income protection risk.

All shipments to the U.S. over $200 with applicable duties must include a customs declaration: while the private express carriers are complying, serious doubts emerge when looking into the international postal shipments. According to the estimates in this study, the annual loss of public sector income due to not collecting customs fees on postal package shipments is over $1 billion.

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