De Minimis’ Demise Sparks UPS Delays, Package Disposals Amid Customs Bottlenecks

The ending of the duty-free de minimis provision is putting stress on customs clearance providers across the U.S. that are now flooded with packages waiting to be cleared to enter the country. And in the case of UPS, the courier is now dealing with customer backlash over allegations that it is scrapping some international shipments before they reach their final destination.

A report from NBC News late last week said the pileup of packages in UPS warehouses has forced the company to dispose shipments in the wake of the heavy customs bottlenecks.

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The report highlighted various customer complaints of waiting for packages for weeks, and also showcased some online tracking updates from consumers that said packages were “undeliverable” and “in the process of being disposed.” Some of the updates were contradictory, like one saying a package was “on the way” after a notification had already went out that the parcel was disposed.

According to UPS, the changes to the U.S. import regulations have resulted in a backlog of packages at the delivery provider.

Due to the backlog and the elevated risk of import delays, the courier suspended its money-back “Service Guarantee” on Oct. 2 for international shipments to the U.S., before reinstating the guarantee on Friday.

“We are seeing many packages that are unable to clear customs due to missing or incomplete information about the shipment required for customs clearance,” said UPS in a statement.

As of Friday, UPS says its customs brokerage clears more than 90 percent of all imported packages on the first day of arrival into the U.S. port of entry.

The remaining 10 percent typically is missing information required to go through customs clearance on the first day, a UPS spokesperson told Sourcing Journal. Many of these products need the information to be compliant with government agencies like the Food and Drug Administration or the Department of Agriculture.

A smaller percentage of that subset of packages are tagged as “abandoned,” usually after UPS contacts a shipper customer at least three times to get the necessary information for clearance.

“Our goal is to speed every package to its destination, while complying with federal customs regulations,” said UPS in a statement. “To continue to serve all our customers and move shipments through our network efficiently, we are making multiple attempts to contact every shipper associated with a shipment and/or tracking number.”

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In cases where UPS cannot reach the shipper and/or obtain the necessary information to clear the package, the company offers two options.

“First, the package can be returned to the shipper at their expense. Second, if the shipper does not respond and the package cannot be cleared for delivery, the package is considered abandoned, and we dispose of it consistent with U.S. customs regulations,” said the statement. “We are committed to working with our customers to help them understand the new requirements under U.S. import regulations and as always, remain committed to serving our customers.”

Matthew Wasserbach, a brokerage manager of Express Customs Clearance, told NBC News that his company saw a spike in inquiries for help with UPS customs clearance after the de minimis provision closed off on Aug. 29.

After President Donald Trump’s executive order went into effect, U.S.-bound packages that are valued at less than $800 were forced to go through a more arduous customs clearance process, with the shipments now subject to applicable tariffs depending on the country of origin.

The changes in regulations have been felt across the industry, with UPS immediately adding an international customs processing fee of $2.50 per imported shipment for certain services when the trade exemption got the axe.

One of its biggest international competitors, DHL, had to beef up its U.S. customs presence with the hiring of 200 customs agents to stay up to speed with compliance.

And dozens of postal operators including U.K.’s Royal Mail, Correos de Mexico, Canada Post and Australia Post briefly put self-imposed bans on shipments to the U.S., citing a lack of clarity provided by customs officials on the new guidelines.

UPS hasn’t publicly listed how many international parcels enter the U.S., but in 2023, the company said its international service delivered 3.2 million packages per day.

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