The Ultimate Guide to Section 321 Fulfillment

If you’re an eCommerce business looking to streamline your cross-border shipping operations to the United States, understanding Section 321 is crucial. This provision allows goods valued at $800 or less to enter the U.S. duty and tax-free, making it a game-changer for direct-to-consumer shipments. In this guide, we’ll dive into what Section 321 is, how it works, its benefits for your business, and how ShipTop can optimize your fulfillment process through this innovative solution.

Key Things You’ll Learn Today

• Understanding the basics of Section 321 and its impact on eCommerce logistics.
• Benefits of utilizing Section 321 for duty-free imports.
• Practical steps to implement Section 321 fulfillment in your business.
• How ShipTop can streamline your Section 321 fulfillment process.

What is Section 321?

Section 321 of the U.S. Tariff Act is a bill by Customs and Border Protection (CBP) that allows for duty-free importation of goods into the United States. Shipments valued at $800 or less per shipment are eligible to enter the US, duty and tax-free. This exemption aims to facilitate cross-border trade and reduce the administrative burden on businesses and customs authorities. Additionally, no customs forms are necessary for eligible shipments. By leveraging Section 321, as an eCommerce business owner you can expedite shipping processes, minimize costs, and improve overall efficiency.

What does de minimis mean?

In international trade and customs, “de minimis” often relates to thresholds or exemptions for duties and taxes on imported goods, where shipments below a certain value are exempted from customs duties or taxes. This concept helps expedite the clearance process for low-value shipments, reducing administrative burden and facilitating smoother trade transactions.

• United States: In the US, Section 321 of the Tariff Act allows for duty-free entry of shipments valued at $800 or less. This provision facilitates streamlined customs processing for low-value imports, benefiting both consumers and businesses by reducing costs and administrative burdens.
• Canada: Canada’s de minimis threshold is CAD $40 for customs duties and CAD $150 for taxes. Shipments valued below these thresholds generally do not incur duties or taxes, promoting efficiency in cross-border trade and enhancing consumer access to international goods.
• United Kingdom: In the UK, goods imported with a value of £135 or less are eligible for a simplified customs declaration and are usually exempt from customs duties. This policy supports small-value imports and eases the customs process for businesses and consumers alike.
• Europe (EU): Within the European Union (EU), the de minimis threshold for customs duties is EUR 150. Shipments valued below this amount are generally exempt from import duties, promoting cross-border trade and enhancing market access for EU consumers to goods from around the world.

Read Also: What is DDP Shipping?

How Section 321 can streamline your eCommerce shipments 

Section 321 offers significant advantages for eCommerce businesses looking to streamline their shipments to the U.S. By leveraging this provision, companies can manufacture products abroad at lower costs, and then expedite their shipping process with reduced paperwork and customs requirements. This approach not only speeds up delivery times but also helps save on international shipping fees, providing more resources to expand and strengthen their presence in the U.S. market efficiently.

How to implement Section 321 in your eCommerce business:

• Partner with a Fulfillment Provider: 

Choose a fulfillment partner experienced in handling Section 321 shipments to ensure compliance and efficiency. Your 3PL must coordinate properly to ensure the submission of all the necessary information before the arrival of the shipment at the border. 

• Assess Eligibility:

 Determine if your shipments qualify for Section 321 based on the value and purpose of the goods.

• Prepare Documentation: 

Ensure all required documentation is accurately completed and submitted to avoid delays.

• Use Technology: 

Implement software solutions to automate the customs submission process, particularly for Entry Type 86.

• Monitor Shipments: 

Track your shipments closely to ensure timely delivery and address any issues that arise promptly.

Benefits of Section 321 Fulfillment

Here’s a quick overview of the benefits that come with using Section 321:

• Cost Efficiency: Reducing customs duties and taxes on shipments valued under $800 USD.
• Speed and Efficiency: Streamlining the customs clearance process, leading to faster delivery times.
• Operational Simplicity: Minimizing paperwork and administrative burdens associated with international shipments.
• Market Expansion: Facilitating easier entry into the U.S. market, allowing businesses to scale operations effectively.
• Customer Satisfaction: Enhancing customer experience with quicker delivery and potentially lower costs.
• Competitive Advantage: Gaining a competitive edge by optimizing logistics and operational costs.

Limitations of Section 321 Fulfillment

Be careful of the following limitations of Section 321:

• Value Cap: Shipments must not exceed $800 USD in fair retail value to qualify, limiting the types of products that can benefit.
• Restrictions on Quantity: While there is no limit on the number of shipments, each individual shipment must meet the de minimis threshold.
• Product Restrictions: Certain types of goods may not qualify for Section 321 due to regulatory or customs restrictions.
• Documentation Requirements: Although simplified compared to traditional customs processes, shipments still require accurate documentation and compliance with entry requirements.
• Potential Delays: Despite faster processing times, unexpected delays can occur during customs clearance, impacting delivery schedules.
• Risk of Non-compliance: Failing to meet Section 321 requirements can result in customs delays, penalties, or refusal of entry into the U.S.

How to Declare Section 321?

When importing goods valued at $800 or less under Section 321, your shipment can often enter the country duty-free without a formal entry. However, if an eManifest is required, you must inform U.S. Customs and Border Protection (CBP) of your intent to use Section 321. 

Steps for Declaring Section 321 with an ACE eManifest

1. Select the “Section 321” Option:
   • On the Automated Commercial Environment (ACE) manifest, choose the Section 321 option.
2. Provide Shipment Details:
   • Include the number of goods, their value, the shipper, consignee, and country of origin.
3. Submit the eManifest:
   • Ensure the eManifest is correctly filed according to the mode of transport:
     • Truck: The carrier must file the ACE manifest, indicating the goods as intangible/Section 321.
     • Ocean: An Importer Security Filing and additional carrier requirements (commonly known as “10+2”) are necessary. Present an arrival notice and invoice in person, and take stamped copies to the Container Freight Station (CFS) warehouses.
     • Air: The airline manifest should list the goods as intangible/Section 321.

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Best Practices to Make the Most Section 321

A robust supply chain is essential to make the most of Section 321 savings. Follow these best practices:

• Always inform and coordinate with your eCommerce fulfillment partner to designate a shipment that will be exported under Section 321.
• Link your eCommerce fulfillment network and establish clear communication lines with your freight forwarders, customs brokers, and carriers.
• Limit the number of customs brokers you use to maintain consistent import and export filings.
• Maintain a clear audit trail for your shipments, especially if dealing with high volumes of low-value shipments. This helps ensure compliance and easy verification.

Read Also: How to Best Shipping Carrier for the Order Fulfillment Process?

What is Section 301?

Section 301 of the Trade Act of 1974 allows the U.S. to impose tariffs and other trade measures to counteract unfair trade practices by other countries, such as intellectual property theft or discriminatory policies.

What are the Differences between Section 321 and Section 301?

Feature	Section 301	Section 321
Purpose	Imposes tariffs to counter unfair trade practices	Allows duty-free import of goods valued at $800 or less
Tariff Rates	7.5% to 25% on many Chinese imports	No tariffs for eligible shipments
Usage Strategy	Seek alternative suppliers, adjust inventory, pass costs to consumers	Break down larger shipments to qualify for duty-free status
Affected Products	Wide range of goods from China	Any goods valued at $800 or less
Business Impact	Increases cost of goods, requiring supply chain adjustments	Reduces shipping costs by avoiding tariffs
Administration	Imposed by U.S. Trade Representative (USTR)	Managed by U.S. Customs and Border Protection (CBP)

Conclusion

Leveraging Section 321 fulfillment can significantly benefit your business, including cost savings, faster customs clearance, and improved competitiveness. By understanding and effectively implementing Section 321, your business can optimize its international shipping processes and thrive in the global marketplace.

How Can ShipTop Help?

ShipTop offers comprehensive solutions to help businesses efficiently utilize Section 321 for their shipping needs.

 Here’s how ShipTop can assist:

• Streamlined Customs Compliance

ShipTop ensures that all necessary documentation is accurately prepared and submitted. Our expertise in customs regulations helps you avoid penalties and delays, ensuring smooth and compliant entry of your shipments under Section 321.

• Efficient Shipment Management

ShipTop’s proprietary platform allows you to manage which shipments will make the Section 321 claim each day. By centralizing this information, you can coordinate with your carriers and fulfillment partners to ensure compliance with the one shipment per day rule.

• Integration with eCommerce Fulfillment

We help link your eCommerce fulfillment network, creating clear communication lines with your freight forwarders, customs brokers, and carriers. This integration ensures that all partners are on the same page, reducing the likelihood of errors and miscommunications.

Read Also: Know ShipTop’s Receiving Guidelines

• Expert Support

ShipTop’s team of experts is always available to provide guidance and support. Whether you need help with complex customs requirements or advice on optimizing your shipping strategy, our knowledgeable professionals are here to assist you.

• Strategically Located Warehouses

ShipTop offers access to strategically located warehouses in Vancouver and Toronto. This reduces transit times and shipping costs, ensuring that your products reach customers quickly and efficiently. By positioning warehouses in optimal locations, we streamline your supply chain and enhance delivery speed.

• Cost Savings

By effectively using Section 321, ShipTop helps you reduce shipping costs. Our solutions enable you to take advantage of duty-free imports, which can significantly lower your overall shipping expenses and improve your profit margins.

• Comprehensive Reporting and Audit Trails

ShipTop provides detailed reporting and maintains a clear audit trail for all your shipments. This transparency helps you stay compliant and easily track your shipments, ensuring that you can quickly address any issues that arise.

Have ShipTop Help Your Section 321 Imports

By partnering with ShipTop, you can navigate the complexities of Section 321 with ease, ensuring that your business benefits from reduced costs and efficient shipping processes. Get in touch with us to strategically implement Section 321 and enjoy its benefits.