UPS stumbles into holiday season amid shifting trade rules

New York City, United States – Since the recent termination of the nearly decade-old trade rule called “de minimis,” United States consumers and businesses have been exposed to slower shipping, destroyed packages and steep tariff fees on international goods – foreshadowing what could make for a chaotic holiday shopping season.

For major international carrier UPS, navigating the latest regulatory changes has proved more fraught than for its competitors FedEx and DHL.

Matthew Wasserbach, brokerage manager for Express Customs Clearance in New York, a firm that assists importers with documentation, tariff classifications, valuation, and other federal requirements, has witnessed the fallout as UPS customers seek his firm’s assistance to clear packages entering the US.

“Over the last few months, we’ve been seeing a lot of UPS shipments, in particular, becoming stuck and being lost or disposed of … This all stems from the ending of the de minimis,” said Wasserbach. “Their [UPS’s] whole business model changed once the de minimis was ended. And they just didn’t have the capacity to do the clearance … a lot of people are expecting to receive international packages, and they’re just never gonna get them.”

UPS did not respond to media’s request for comment.

Since 2016, the de minimis trade exemption determined that packages worth $800 or less were not subject to taxes and tariffs. According to US Customs and Border Protection (CBP), the number of shipments entering the US claiming the exemption increased by more than 600 percent from 139 million shipments in 2015 to more than one billion in 2023.

In August, this all changed. President Donald Trump signed an executive order suspending de minimis treatment for all countries, spiralling US imports into a new landscape of paperwork and processes, subject to duties and tariffs based on their place of origin.

Just a month after de minimis ended, while shipping products with UPS, Tezumi Tea, an online Japanese tea and teaware company that sells its products online and through meetups in New York City, fell victim to the tariff backlog at US customs. Tezumi lost roughly 150kg (330lbs) of matcha, totalling about $13,000.

“We responded by increasing buffers in our supply planning across the dozen farms that we partner with,” said Ryan Snowden, a cofounder of Tezumi. “Even with those adjustments, the loss had a severe effect on a number of our cafe customers who suddenly needed to switch to another matcha blend.”