CNBC’s Frank Holland reports UPS confirms some shipments are destroyed if customs issues aren’t resolved, while FedEx calls such cases rare. Rising tariffs and new import rules could disrupt holiday deliveries.

Washington

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

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UPS reports that about 90 to 95 percent of goods imported through its network clear U.S. customs on the first day, but around 5 percent face disposal if customs paperwork and regulations are not resolved. The company states it contacts shippers for additional information and holds packages for about 30 days, though this is not an official policy and can be extended with ongoing communication. If issues remain unresolved, packages are disposed of in accordance with customs regulations. 

FedEx also confirmed that it disposes of some packages with customs issues, though it did not provide specific numbers and described such cases as rare. The end of the de minimis exemption means millions of low-value packages now require tariff processing, potentially adding complexity, especially with the possibility of new tariffs on Chinese goods. Other major carriers have not yet commented on the situation.

UPS to dispose of packages amid customs and tariff tensions

Welcome back to Worldwide Exchange in the logistics sector. UPS telling me approximately 90 to 95 percent of goods imported to the U.S. through their network can be cleared through customs in the first day. But that still leaves about 5 percent or more that face the threat of being disposed of. If all customs paperwork and regulations are not resolved to allow entry into the U.S. on Friday the company told NBC News that some goods were being disposed of for not complying to customs regulations. The company clarified to me over the weekend before disposal. UPS reaches out to the company to get needed information like country of origin for assembly and even for components. UPS also says it checks for data from previous shipments and packages are held for roughly 30 days. But that is not an official policy and they can also be held longer if there's active communication with the shipper. However if those issues cannot be resolved UPS says packages are disposed of based on customs regulations. They did not expand beyond that. Also spoke with FedEx. They say they dispose of some packages that have customs issues but they wouldn't provide a number. They call that situation rare. I've also reached out to Amazon and DHL about these issues. So far have not gotten a comment. The question now remains what does this all mean for the holiday season where volumes are expected to increase by 5 percent year over year. The end of the de minimis exemption now means that about four million low value packages that previously did not face tariffs they now have to be accounted for. And that could add complexity along with the president saying he could likely impose a 100 percent additional tariff on Chinese goods. However as we've been talking about all morning a social post over the weekend is putting that idea in question. The president saying November 1st when those tariffs take effect is a long way away. So we'll have to wait and see.

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UPS to dispose of packages amid customs and tariff tensions

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