BoxC links with FDA for faster e-commerce customs clearance

Customs and Border Protection works toward efficient e-commerce clearance strategy

Grace Sharkey

2 years ago

Global shipping platform BoxC announced that through a data-sharing initiative with U.S. Customs and Border Protection its e-commerce merchants shipping Food and Drug Administration-regulated products will have the capability to send products individually to the U.S. and receive the same clearance rate as bulk shipping.

Chad Schofield, co-founder and chief digital officer at BoxC, told FreightWaves the difficulties e-commerce shippers face when getting their products into the United States.

“Traditionally with the FDA, it’s always been focused on bulk clearance with manual processes,” said Schofield. “There was just no way to ship from overseas, directly to consumers, effectively.”

Schofield explained that those importing prescription glasses to the United States, for example, often ship orders in large bulk, receive FDA approval and customs clearance as a whole and then they are shipped to warehouses where they are sorted and shipped individually to consumers.

Now leveraging BoxC’s real-time shipment data, those glasses can be mailed directly to end consumers from manufacturers overseas, quickly receive FDA and customs approval and avoid the extra costs needed for warehousing and picking services.

“Each item clears for each consumer rather than the traditional event,” said Schofield. “You could bring 1,000 pairs of eyeglasses in, gain clearance and ship them out individually. Now you can just ship directly to 1,000 customers and know that customs will approve clearance having all the data points properly relayed for FDA approval.”

E-commerce problems for CBP

According to Schofield, FDA approval of imports is just a fraction of the problem that e-commerce growth has caused for the CBP.

The increase of small, low-value shipments into the U.S. was first addressed by CBP in 2018 in its E-Commerce Strategy report after seeing Americans’ online shopping increase 57% from 2000 to 2018.

“CBP must shift the way it implements its mission of public safety and security due to challenges in e-commerce trade from risks such as fraudulent goods, dangerous materials and the potential for harm to the U.S. economic competitiveness,” the report explained.

The government agency then structured goals to tackle the problem, including working with other agencies to address the emerging market, enhancing its operations to be able to respond to changing supply chain operations and technology and building private-sector partnerships for guidance on how to build standards for international e-commerce customs processes.

CBP gals outlined in its E-Commerce Strategy report. (Photo: CBP)

In 2019, CBP announced a test to begin collecting data in advance of shipments hitting borders that fall under Section 321 of the Tariff Act of 1930 to target high-risk shipments and improve clearance times of the 1.8 million e-commerce shipments entering the U.S. on a daily basis at the time.

According to the Tariff Act, “Section 321 provides for an administrative exemption from duty and taxes for shipments of merchandise (other than bona fide gifts and certain personal and household goods) imported by one person on one day having an aggregate fair retail value in the country of shipment of not more than $800.”

In 2020, to acquire this data, CBP partnered with nine supply chain entities to expand the scope of the pilot and prove that improvement could be made through various modes and providers sharing their data. These entities were BoxC, Amazon, eBay, Zulily, FedEx, DHL, UPS, PreClear and XB Fulfillment.

Schofield explained that its FDA customs partnership is not directly linked to its Section 321 data pilot work with the CBP, although it does showcase the demand from government agencies to work with supply chain solutions providers to properly handle the growing digital selling economy.

“These measures will help in driving compliance, promoting cooperation domestically and internationally and build a strong trade posture in e-commerce, ensuring a shared economic prosperity for the future of the United States of America,” said Michael Pakula, CEO of BoxC in an article he wrote on the Section 321 partnership.