In February of this year, the BTI Institute, a Department of Homeland Security Center of Excellence located at the University of Houston, issued a 150-page report on how emerging technologies are impacting trade and security in the e-Commerce world.
According to the report, e-Commerce accounts for 12% of global trade of physical goods in both B2B and B2C and the U.S. International Trade Commission reports global e-commerce totaled over $27 trillion in 2016, with B2B comprising over 85% of that total.
While the figures surrounding the acceleration of e-Commerce during the pandemic tell the tale of what has happened to Americans’ domestic buying behavior, a more little known element is what began with many companies in 2015 with the passage of the Trade Facilitation and Trade Enforcement Act, or TFTEA.
TFTEA raised the de minimis amount that individuals and companies could import into the United States duty-free each day from $250 to now $800. For many companies in the retail, apparel, footwear and consumer electronics industries, this meant the ability to push the final mile shipping point to their buyers further upstream in their supply chains – all the way to a foreign point of departure.
In 2018, 1.8 billion people globally purchased goods online, and 57% of online buyers purchase from foreign sellers.
The US $800 amount is among the highest de minimis thresholds of any country on the planet, so for American consumers, their product selection is far wider than their fellow global buyers. Nonetheless, bad actors attempt to ship goods worldwide that violate intellectual property rights, falsely declare contents and values, contain fake prescription drugs that could injure or kill someone and contain multiple other types of contraband or illegal items.
With the number of packages in the system rapidly accelerating, global customs authorities are working to identify what current processes and technologies can aid their screening and targeting and what changes could be made in places like the World Customs Organization (WCO) that could further their efforts.
Vince Iacopella, Alba’s EVP for Growth and Strategy, was one of three members of the project team who contributed his knowledge and expertise in the creation of this report that was researched from April – November, 2020, at the height of the pandemic.
The report delivered a handful of options to further secure e-Commerce including:
- Developing a new Authorized Economic Operator (AEO) program tailored for the cross-border e-commerce environment.
- Allowing trusted intermediaries or online sellers to receive AEO certification by demonstrating compliance with Customs requirements and cooperating with other e-commerce stakeholders.
- Taking into account the challenges of Micro, Small and Medium Size Enterprises (MSME’s).
- Designing effective e-Commerce AEO programs that require data sharing despite emerging data localization laws.
- Creating a federated data platform and ICT infrastructure.
The details of this report and what it means for U.S. companies will be the subject of an upcoming webinar featuring three of the people who researched and wrote the report and will be presented by the Los Angeles Customs Brokers and Freight Forwarders Association on Thursday, May 27th.
The event’s registration page and summary is here and if this is a topic of interest to you or your company, we encourage you to register and attend. If you have any questions or would like to learn more about how Alba has already set our focus on data as a vehicle to both increase velocity and save money in shipper supply chains, contact us today.
