Below is the latest edition of Modern Retail’s Supply Chain Weekly newsletter, which goes out on Mondays at 10 a.m. ET, and dives into all things logistics and supply chain during a tumultuous time for the retail industry. To receive this weekly in your inbox, click here.Brands that sell to European customers are about to undergo a major shipping change when the existing de minimis exemption ends on July 1.
Up until now, imports coming into the European Union that were valued under €150 fell under a de minimis exemption for low-value packages. Starting July 1, packages will have a new, temporary flat €3 customs duty per each declared line item. That means a package with five different types of products in a package valued under €150 would have a €15 fee; a package with five of the same line item would have a €3 fee.
Alison Layfield, vice president of product development at ePost Global, said brands have been considering which processes they can implement to ensure the duty is covered. “What’s really challenging with all of this is there’s no way around not paying that three euros per line item,” she said.
Brands have a few options for handling the new duty, Layfield said. Brands can collect the fee at checkout, or absorb the cost themselves through price hikes or margin erasure. This is known as “delivery duty paid,” or DDP.
