AIR CARG O WEEK


E-COMMERCE


DEATH OF DE-MINIMIS DISRUPTS AIRFREIGHT


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“The de-minimis threshold allowed consignments below a certain value to enter a country without duties or complex customs procedures”


n early October, in Hanoi, Vietnam, The Airforwarders Association’s (AfA) executive director Brandon Fried warned that airfreight networks are still adjusting to the end of US de- minimis rules, with compliance tightening and the small-parcel model giving way to heavier, consolidated shipments. AfA members have reported higher duties,


Cycle times have also lengthened. The introduction of mandatory longer cycle times


and greater complexity in returns management since de-minimis thresholds ended on August 29, Fried told delegates at the FIATA World Congress 2025 in Hanoi. “The industry has moved overnight from light-touch clearance


to full formal entry,” said Fried. “We are seeing fewer parcels but larger, better-documented shipments. Fraud has dropped, but working-capital and compliance burdens have climbed sharply. The de-minimis threshold allowed consignments below a certain


value to enter a country without duties or complex customs procedures. It was designed to simplify low-value trade, reduce administrative overhead and support cross-border e-commerce. In the United Kingdom, for example, goods valued at £135 or less may still avoid customs duties (though VAT must still be collected) under the Low Value Imports regime. However, the perceived benefits of de-minimis have also drawn


criticism. Retail trade associations argue the regime has created distortions in competition, allowing foreign sellers to undercut domestic retailers by bypassing import duty. In April 2025 the UK Government announced a review of the scheme, echoing calls from the British Retail Consortium (BRC) and others for reform. “The rule currently allows goods valued at £135 or less to enter the UK without incurring customs duties,” the government acknowledged. Helen Dickinson, chief executive of the BRC, welcomed the review: “The review of this policy … was already needed. With retailers seeing a rise in the number of potentially non-compliant products entering the UK market, it’s even more critical now.” In the United States, the de-minimis threshold was historically


$800, one of the most generous in the world. That threshold was gradually dismantled; first applying to goods from China or Hong Kong, and then fully eliminated for all origins earlier in 2025. The change is expected to ripple across global supply chains, particularly for exporters who depended on low-value parcel shipments.


Consequences, challenges and strategic responses The sudden removal of de-minimis has exposed fragilities in the small-parcel model. Forwarders now face the fact that the end of de-minimis has brought with it a cascade of operational and financial consequences for air economics and rhythm of global


forwarders, reshaping both the logistics. According to freight


media reports the most immediate impact has been a steep rise in landed costs. Every parcel, regardless of its declared value, may now attract customs duties, tariffs or processing fees. For many operators, this has dramatically inflated the cost base and eroded the margin advantages that small-parcel logistics once offered.


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advance declarations, stricter classification requirements, and an increase in customs audits and inspections have slowed throughput and created new bottlenecks in supply chains. Shipments that once moved seamlessly under simplified procedures are now subject to greater scrutiny, demanding more manpower and time at every stage of clearance. Returns management,


too, has become a more intricate


undertaking. Cross-border returns now require full documentation, careful duty reclaims or re-entry strategies, and navigation of multiple customs jurisdictions. The additional paperwork and procedural risk, have turned what was once a routine process into a costly, time-consuming exercise. Financial pressures are mounting as well. With duties payable


upfront, forwarders are being forced to pre-fund tax liabilities or post guarantees to customs authorities, tying up liquidity that might


otherwise have supported operational investment. As


industry sources have observed, this new working-capital burden is particularly acute for smaller firms that lack ready access to credit or flexible financing arrangements. Finally, the compliance environment has grown far more


demanding. The accuracy of HS codes, origin statements, product descriptions and declared values is now critical. Any deviation or oversight can result in fines, clearance delays or even shipment seizure. Forwarders must now invest in data integrity, staff training and robust internal controls to ensure compliance in an era where errors carry far greater consequences than before. Taken together, these developments represent not merely a


procedural adjustment but a structural shift in how the airfreight industry must plan, finance and execute cross-border trade.


New paradigm Fried urged forwarders to adapt to the new paradigm. He recommended investing


consolidating in master shipments data and tariff where structuring returns through Free Trade Zones or governance,


possible, and


Inward


Processing Relief schemes to mitigate duty liabilities. He also stressed the importance of early duty cash-flow planning and heightened visibility over purchase orders. Still, the transition remains unfinished. “Realignment


is far from finished,” Fried repeated - a warning that further adjustments, regulatory clarifications or industry pushback may lie ahead. In sum, the de-minimis era’s end marks a structural shift. The


low-value parcel model, once a backbone of global e-commerce logistics, is being recalibrated. The new landscape demands scale, precision and capital resilience - and those forwarders unwilling or ill equipped to adapt risk being squeezed between rising compliance burdens and eroded margins. The industry now must evolve, thoughtfully and urgently, to navigate a more formal and costly era of cross-border trade


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