Importing goods into the United States can be a challenging, high-cost endeavor. Moving purchases across country borders can mean duty and other importation taxes that increase the cost of shipping for brands and shoppers alike. Enter: Section 321.
Section 321 is a regulation put in place by the US Customs and Border Protection (CBP), among other rules and restrictions on shipping. However, Section 321 is a particularly important law because it allows low value shipments to avoid taxes and duties. Imagine the difference that can make to your out of country shipping costs.
This article will go over all things Section 321, arming you with the knowledge you need to make the most of it.
What is Section 321?
Section 321 is a law put in place by the US Custom and Borders Protection that allows shipments valued under $800 to enter the U.S. duty-free.
Recently, this dollar value where you don’t have to pay tax on importing to the U.S. was raised from $200 to $800 dollars. This can make a huge difference for brands that are looking to ship into the United States.
Say you sell high-quality apparel and your best-selling jacket goes for $375. Before, you would either be paying pretty hefty duties or taxes out of pocket to ship it into the United States or passing those extra fees onto your shoppers. This means a huge expense for you or an unhappy shopper when they get hit with a big bill for duties.
This law provides a lot of room for ecommerce brands to grow into new markets, since products priced between $201-$799 can now be shipped into the US with no duties or taxes. A new market plus shipping savings is an incredible combination.
How does a business claim Section 321?
Utilizing Section 321 for shipping doesn’t require much extra legwork on your end. Your shipments should enter into the United States duty-free if the attached invoices list the value of your product at under $800. It’s that easy.
Pro tip: Make sure the product value is clear on attached invoices. The clearer it is, the easier it is for the product to clear customs quickly. If you work with a third party logistics provider, like GoBolt, the documents, manifestation, and clearance is all handled for you. This means no additional backend work for you.
Benefits of Section 321 for brands and retailers
It’s clear that there are some major benefits of Section 321, especially for brands located outside of the United States with products valued under the de minimis value of $800.
Let’s break down what some of the benefits of Section 321 fulfillment are.
Market expansion opportunities
If your business is located in Canada, you’re selling to around 37 million people. When you enter the US market, you’re reaching an audience ten times that size! However, the affordability of shipping may have been a deterrent to expanding.
With Section 321, you’ll see some major savings on shipping costs. Given anything you import will be duty-free, it makes cross-border shipping way more affordable.
Cost savings and enhanced shopper experience
Section 321 enables duty-free imports, resulting in substantial savings on shipping costs, making it more economical to reach U.S. consumers. And while this benefit only applies to you if you have already been shipping across borders, it’s still important to flag. Given how high the cost of duties can be, your shoppers may have been seeing higher shipping rates at checkout. With Section 321 in place, and you are able to save on duty, you can pass those savings onto your shoppers.
And more affordable shipping makes potential buyers even more likely to hit that “add to cart” button.
Faster, more efficient shipping processes
Delivery times are a huge factor for shoppers when placing an order. More than 50% of shoppers stated that the speed of delivery directly influences their purchasing decisions.
Luckily, Section 321 makes it easier for packages to cross the boarder quicker. Simplified customs procedures under Section 321 streamline border clearance, leading to quicker transit times for shipments under $800.
And, faster delivery times enhance shopper satisfaction and contribute to more efficient order fulfillment processes.
What are the restrictions of using Section 321 fulfillment?
Unfortunately, this isn’t a law that blindly covers everything – there are some exceptions.
1. Non-compliant goods
This shouldn’t come as a surprise to most seasoned brands who ship internationally. Every country has different rules on what goods are (and are not) allowed to be shipped within their borders.
Some of the non-compliant goods under Section 321 include:
- Goods that need inspection as a condition of release, even if they are under the $800 value
- Merchandise subject to Anti-Dumping Duty (ADD) or Countervailing Duty (CVD)
- Non-medical devices that emit radiation
- Goods that are specifically regulated by the Food and Drug Administration (FDA), Food Safety Inspection Service (FSIS), Consumer Product Safety Commission (CPSA0, United States Department of Agriculture (USDA), and National Highway Transport and Safety Administration (NHTSA)
- Cigarettes, cigars, e-cigarettes, or alcoholic beverages
2. Restrictions on imports from china
After this article, you’ll know Section 321 like the back of your hand, but do you know about Section 301?
Section 301, also known as 301 China, is an increased tariff put on goods imported from China into the U.S. For the time being, Section 321 actually overrides Section 301, but it’s an important restriction to be aware of if you regularly import goods from China, as things can change.
3. Claims can only happen once a day
This is an important one to flag, as you can only make one tax-exempt import per day. If you make more than one daily claim, you may face serious penalties – $5,000 in penalties in some cases. Make sure your 3PL provider isn’t claiming numerous times per day.
What are the benefits of managing Section 321 shipments with a 3PL partner
Streamlined documentation and clearance
- By partnering with an end-to-end 3PL provider experience in cross-border shipments, brands can benefit from a cost-effective and swift shipping solution into the US.
- A 3PL can efficiently manage the documentation, manifestation, and clearance of eligible shipments, alleviating the burden from brands.
Simplified process
- Without a 3PL partner, brands must undertake various steps such as picking, packing, and preparing all necessary documents for Section 321 shipments.
- They also need to coordinate shipping from the origin to the final destination, adding complexity to the process.
Centralized management
- With a 3PL handling all Section 321 shipments, brands establish a single point of contact to ensure seamless processing.
- Outsourcing logistics allows brands to focus on their core competency of providing high-quality products, rather than navigating shipping intricacies internally or through multiple partners.
Risk mitigation
- Internal handling or multiple partners for cross-border shipments can increase the risk of complications, such as delays due to non-compliant goods.
- A strong 3PL partnership mitigates these risks, ensuring smooth transit and compliance throughout the shipping process.
Key Takeaways: Section 321 simplifies cross-border commerce
Section 321, a regulation by the US Customs and Border Protection, revolutionizes international shipping by exempting low-value shipments under $800 from duties, unlocking cost savings and market access for brands.
This law not only reduces shipping expenses but also enhances the shopping experience for customers. Leveraging a trusted 3PL partner further streamlines Section 321, ensuring seamless transit and risk mitigation. In essence, Section 321 serves as a catalyst for growth, empowering brands to thrive in the global marketplace.
Cross-border shipping can be a complex process. Reach out to one of our logistics specialists to learn more.
