ShipBob Fulfills De Minimis-Eligible Orders Out of Canada and Mexico
ShipBob is getting in on the duty-free de minimis craze.
Three of the supply chain and fulfillment platform’s fulfillment centers in Toronto, Canada and another in Tijuana, Mexico are now fulfilling Section 321-compliant orders bound for customers in the U.S.
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The hotly contested provision, considered a “loophole” in American trade laws by some lawmakers, allows foreign shipments worth $800 or less into the country tax-free.
In launching the offering, ShipBob aims to help customers save money on duty and tariff fees, and reduce the paperwork required to import goods into the U.S., ultimately speeding up delivery times.
“Most of what we do to expand our network comes from customer needs, both what we hear from them directly and what we see in our data, and this is no different,” said Divey Gulati, chief operating officer of ShipBob. “Across our fulfillment network in North America, we have large operations in Southern California, as well as the Northeast U.S. and Canada, so the decision to expand to and unlock Section 321 in Mexico and Canada was a great fit.”
ShipBob’s technology automatically allocates Section 321-eligible orders to a fulfillment center in Canada or Mexico and generates a fully compliant “eManifest” for a streamlined customs clearance experience.
From there, ShipBob coordinates transportation to the nearest of its 30+ U.S. hubs, where the parcel is sent into their carrier network for a delivery experience that the company says is on par with standard U.S.-based fulfillment.
According to the company, the section 321-eligible fulfillment centers function seamlessly with the rest of the ShipBob network, which is powered by four primary hubs in Chicago, Moreno Valley, Calif., Kutztown, Pa. and Grapevine, Texas. When an order is placed, ShipBob’s algorithm automatically selects the warehouse and carrier that will give the quickest turnaround based on the company’s “demand profile,” which identifies where individual products are selling best.
The de minimis provision has gotten plenty of publicity in the wake of the popularity of Shein and Temu, both of which have heavily leveraged the trade exception to ship more packages into the U.S.
But Gulati cautioned brands on jumping in head first into the de minimis ecosystem, saying “It’s not for everyone.”
“It’s not just about making Chinese-origin products cheaper. There is often significant benefit to having a stopover in our NAFTA partner countries that is outside of the duty benefit,” Gulati told Sourcing Journal. “Caution is important and you should not compromise on compliance around product regulations. You also need to have extra safeguards to ensure you aren’t shipping over the de minimis threshold.”