EU crackdown on small parcel imports kicks in

A big question is whether higher shipping costs will change shopping behavior. Initial analysis of freighter activity from consulting firm Rotate shows freighter capacity from China and Hong Kong to Europe has fallen 19% in the past 48 hours.

For most cross-border merchants, a $100 apparel order with three items under different classification codes shipping into the EU will carry roughly 20% in added duties and fees by November, international e-commerce services provider Flavorcloud said in a blog post.

For a retailer shipping 10,000 such parcels per month, the difference between one and three declaration lines per shipment is $68,000 in monthly duty exposure, said Alison Layfield, director of product development at ePost Global, on the company’s website.

The flat duty remains in effect until July 1, 2028, when normal customs duties, based on each product’s classification, are expected to apply instead. 

In 2025, $5.8 billion in low-value parcels were imported in the EU, up from 4.6 billion in 2024 and a 314% increase since 2022. Most parcels are from China. Popular e-commerce exporters include fast fashion seller Shein, and marketplaces like Temu, JD.com and Ali Express.

Since the spring, online marketplaces have front-loaded shipments to clear the EU border under current rules, contributing to upward pressure on Asia-Europe air cargo rates from the Iran war that have already exceeded last year’s peak season highs.  

It’s unclear whether the elimination of de minimis will dampen e-commerce volumes in Europe. Demand  for ultra-low cost parcel shipping is very price sensitive, but platforms learned how to adapt following the U.S. rule change last year. Large retailers and marketplaces are doing more local fulfillment instead of shipping individual parcels from origin after securing in-country warehouses and shipping goods to them in bulk through traditional air and ocean container channels. 

Experts say retailers will have to reevaluate their pricing models. Brands with a high volume of orders with a low average value could experience the greatest impact and may decide that certain SKUs are not commercially viable to ship from outside the EU. But someone ordering $180 worth of apparel may be less deterred by an extra $10 fee. 

Italy, France and Romania introduced national handling fees ahead of the EU-wide rule. Those fees will stack on top of the EU fee, but France on Tuesday said it will withdraw its fee to have a united market approach. 

Within days of France imposing a 2 euro parcel tax on March 1, small parcel volume for customs clearance at Paris-Charles de Gaulle airport, the country’s largest air cargo hub, dropped by 92%, according to French customs authorities. Many cargo aircraft were rerouted in the first week to Belgium, Spain, Germany and the Netherlands, where the fee didn’t yet apply. With an even playing field across the EU those types of diversions won’t work anymore.

The United Kingdom, however, could become a magnet for low-cost foreign goods as it doesn’t plan to change its de minimis requirement until March 2029, making the market more attractive than the EU to e-commerce sellers.

More countries are going to follow the U.S. lead on applying tariffs to small-dollar shipments after seeing how the government was able to collect billions of dollars in import taxes, according to Fabrizio Alvear, co-founder and president of ePost Global.

“If  there’s 10 million parcels B2C parcels a day going into a country like the Netherlands and there’s two SKUs on average per package, that’s $60 million in revenue for the country in a single day. So it’s a huge moneymaker, huge revenue stream,” he said on Thursday’s edition of FreightWaves Today.  “This is not going to stop.” 

Retail reboot

Even more significant for shippers, perhaps, are more stringent standards for data attached to every shipment. The reform also shifts legal responsibility. Under the new framework, the seller or platform is treated as the importer of record 

Importers and their transport partners will need to submit standardized electronic shipment data before goods enter the EU, including precise product descriptions, seller/consignee information, consignee details and customs classification codes. New production identification data becomes mandatory Nov. 1. For low-value ecommerce imports, even small classification differences may affect duties and fees.  

The extra scrutiny is expected to have a big impact on digital sellers because shipments with bad data could be held up or rejected by customs authorities, or subject to penalties.

Logistics companies have worked for months to educate and prepare customers on how to comply with the customs clearance requirements and reduce the risk of unexpected costs, but many say there continues to be a gap between awareness and readiness.    

Businesses that are not fully prepared for new product data requirements, product identifiers, EU-wide handling fees, and stricter documentation standards will face delays at EU borders once the changes take effect, logistics and customs specialists say. 

They recommend that e-tailers show the fully landed transaction cost, and be prepared to collect it at checkout so that shoppers don’t receive a surprise duty collection at delivery, which could prompt a large number of returns or unfavorable social media reviews.

Retailers also need to audit cross-border flows and tariff classification accuracy. That means taking stock of countries of origin, value brands, and harmonized customs codes, identifying which shipments rely on the de minimis exemption and how many become dutiable, said tax compliance software provider Avalara in a website article. 

In some cases, importers might find it more advantageous to file a formal declaration and pay the ad valorem duty rates than the 3 euro per tariff line item, particularly where a consignment contains many very low-value goods across multiple lines, said Layfield.

Flavorcloud’s compliance checklist instructs retailers to pull a sample of EU orders from the past 90 days and check whether they match codes in the EU’s common tariff database. The best investment is in an automated classification system, it said. The logistics provider also urged companies to confirm that trusted or EU authorized traders are handling importation on their behalf because the reforms explicitly target shell-company arrangements. 

A big area of uncertainty centers around which postal services will accept parcels delivery duty unpaid, said Kate Muth, executive director of the International Mailers Advisory Group, on Wednesday’s edition of the Postal Hub podcast. 

Denmark, for example, is only delivering parcels with prepaid duty. Muth said that’s okay for an individual sender because the U.S. Postal Service’s duty paid solution will cover it. 

“If you’re an enterprise shipper where you’re selling on one of the big platforms and you use a consolidator that’s going into Denmark, for example, their negotiated service agreement with the postal service only allows them to send via permit imprint (a discount payment method for bulk shippers). They can’t then use the Postal Service for DDP because their Postal Service’s DDP solution is not set up for permit imprint,” raising questions about whether shipping to Denmark can continue, she said. And there is a lot of uncertainty about what happens to parcels tendered before the rules went into effect, which “means folks are going to look for solutions outside of the postal system.” 

Global express carriers DHL, FedEx and UPS last month urged EU officials to hold off on requiring new data elements until customs authorities could process the data without causing delays at the border, Reuters reported.

The rising compliance requirements and associated costs are prompting cross-border shippers to reassess their approach to European markets. More than one-third of customers in Asia have adjusted, or plan to adjust their EU pricing, while half say the changes are influencing whether to continue selling in Europe, according to a survey of 5,000 businesses conducted by FedEx. Many shippers said they are shifting their focus to intra-Asia or U.S. markets, although the United States last year also imposed duties on small-value parcel shipments for the first time in years. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

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