Shipping delays and complications due to new customs and tariff regulations have left many businesses and individuals frustrated and anxious. Millions of packages are delayed, putting tremendous financial stress on millions of Americans. This lag is creating havoc for those who count on on-time deliveries. In response, importers are currently running all-out trying to get a grip on the new rules of the game and get their logistics arranged.
Lauren Purvis, who runs Mizuba Tea Co with her family, is worried about the shipping pandemonium. She said that her full team is currently running on “scan watch.” They’re working hand-in-hand with elected officials to ensure the safety of their shipments.
“My whole team is basically on scan watch,” – Lauren Purvis
UPS, one of the largest shipping carriers in the U.S., has begun to preemptively hold packages. The crisis was worsened by issues with new customs documentation requirements.
Customs Clearances
Importers usually have ten days after their goods enter the U.S. to submit required documentation and pay tariffs. Yet many of these same packages have recently been delayed and/or marked for disposal, leaving businesses and consumers alike extremely concerned about the status of their orders.
Janani Mohan felt this pain personally when her package was flagged for disposal. She had to do the same frantic phone calling, urgent emailing, and other frantic enabling. She knew she couldn’t afford the loss of her shipment.
Swedish Candy Land recently posted about a similar delay affecting more than 700 packages shipped through UPS to American customers in early September. These packages are now being prevented from going through processing. Last month, Tobias Johansson, general manager of Swedish Candy Land, announced that the company has converted its shipping to FedEx. They reached this decision after observing all of the continuing problems UPS has provided.
“That was a big hit for us and we haven’t gotten any answers yet for anything,” – Mr. Johansson
The economic impact of this recurring shipping disruption has been catastrophic. According to Swedish Candy Land, they have already incurred at least $50,000 in refunded orders for packages that were lost or destroyed along the way. The company is still fighting to have these complaints lifted. This pain point is emblematic of the bigger existential crisis many businesses are going through during this unprecedented time.
The unfortunate experience of Nicole Lobo illustrates just how damaging these shipping issues can be. She loaded ten boxes of her belongings on ships going back to her home port of Philadelphia. Six weeks later, she’s still waiting for that shipping container to arrive.
UPS finally only dispose of a non-claimed package after contacting the intended receiver three time. This dramatic policy change has not calmed the jitters of importers or consumers. The lack of clarity and transparency about these new customs provisions has created an environment of fear and anxiety about package deliveries.
Mizuba Tea Co, with five shipments currently held up in processing, total value of over $100,000, is facing such delays. Due to the company’s significant dependence on just-in-time deliveries, they have been squeezed by their suppliers in an untenable situation where they face collapsing inventories.
FedEx executives acknowledged the strain on their customers during this challenging time, especially for smaller businesses struggling to navigate the complexities of shipping regulations.
“It’s been horrific,” – a 28-year-old customer
The disruptions going on have led to fears of a permanent shift in U.S. shipping logistics. We asked our friend John Pickel about his worst fears—that things would get worse before they get better. At the same time, Raj Subramanian similarly cautioned that shifts in the trade environment could lead to a $1 billion downturn this year.
A UPS spokeswoman articulated the woes faced by many importers, stating, “Because of changes to U.S. import regulations, we are seeing many packages that are unable to clear customs due to missing or incomplete information about the shipment required for customs clearance.”
Businesses are understandably in the midst of a shipping crisis. There is hope that rapid answers will be provided that will return a sense of normalcy to the delivery process.