Section 321 Ground Handling

U.S. Customs and Border Protection’s (CBP) Section 321 release option allows low-valued shipments (those valued at $800 or less) to enter the country free of tax and duty as long as the requirements are met. Most e-commerce parcel shipments are eligible for Section 321 release, meaning reduced customs paperwork, faster clearance (pre-arrival and immediately upon arrival) and less administrative burden on importers and carriers.

The surge in e-commerce imports in recent years has created challenges both for trade participants and regulating agencies. It takes a lot of time and manpower to vet and manage the millions of parcels that cross the border, and the inherent low value of the shipments make it difficult for the government to divert resources from higher value shipments to this task.

To keep the country safe while facilitating the flow of e-commerce, CBP has rolled out a test of new functions related to Section 321 release via the Automated Commercial Environment (ACE). During the test, the importer/owner of the shipment or their customs broker can file a new Section 321 entry type. This new informal entry further speeds up cargo clearance for high volume parcels and helps businesses save time and money.

Section 321 Ground Handling & Entry Type 86

Entry type 86 is an alternative to the release on manifest process for Section 321 shipments. It covers regular low-valued shipments and PGA-regulated goods valued at $800 or less, allowing importers to clear high-volume e-commerce merchandise faster while reducing costs. However, filers must submit the 10-digit Harmonized Tariff Schedule number for each item in addition to the bill of lading/air waybill number, importer or record (IOR) number, entry number, entry port, shipper and consignee data, country of origin, weight, value and quantity.

The IOR number is a conditional requirement for shipments that are subject to PGA control and reporting. The IOR must be that of the owner of the shipment or the customs broker when designated by a consignee. PGA reporting is satisfied by the PGA Message Set, while supporting documents are processed via the Document Image System (DIS).

Filing Process

Unlike the release on manifest process, entry type 86 clearance is considered “customs business” and requires consignees to appoint a customs broker to act as the importer or record for the shipment. Customs brokers need a valid power of attorney to enter eligible shipments as type 86. The owner or broker files the entry in ACE through the Automated Broker Interface (ABI). ABI is the main system for filing electronic import documentation to CBP.

Entry type 86 is open to all Section 321 shipments in all modes of transport, both PGA-regulated and otherwise. Trade participants are encouraged to participate in the test to work out the kinks of the process and try out the new features.

The submission of the HTSUS code is the biggest downside to entry type 86. HS code classification can get complicated and inaccurate codes can mean delays at the border, denial of entry and penalties. The new release option is recommended for experienced importers or those already working with customs broker agencies/third party logistics providers.

Release from Manifest Process

The release from manifest process for Section 321 shipments is still the main option for many businesses. It is fast and does not require the HTSUS code for each shipment. However, PGA-regulated low-value shipments require additional data to be submitted to controlling agencies. Some Section 321 shipments may also require the payment of duty, fees and taxes, which makes them ineligible for expedited de minimis release.

Importers and customs brokers, as well as carriers and consignment operators can submit the bill of lading (or manifest with each BOL) to CBP and CBP will release the merchandise based on the information provided. This includes the country of origin, shipper and consignee details, detailed description of the goods, weight, quantity and value.

Section 321 Ground Handling for E-Commerce

Most parcels entering the U.S. are injected into the national postal system (USPS), processed by integrators like FedEx and DHL, or cleared via ECCF (Express Consignment Carrier Facility) or CFS (Container Freight Station). Some retailers choose to ship parcels to Canada and Mexico then truck the shipments to the U.S.

Each method has its pros and cons. USPS is cheap but tend to be unreliable especially during peak times, while big couriers can be expensive. EECF clearance is fast but costs about $1 per parcel, while CFS is cost-effective (zero fees) but clearance takes a few days. The new type 86 entry combines speedy clearance with zero costs and is recommended for importers who have a good understanding of H.S. code classification.

Postal and courier hubs in addition to ECCFs and CFS can be found at key airports and cities like the independent ECCFs at L.A., New York, Chicago and Miami. Parcels usually arrive at a key airport with ECCFs and are then forwarded to the consignee via parcel post or courier, depending on the shipping method chosen by the buyer.

Improvements in reliability and efficiency have attracted customers to USPS, which include DHL Global Mail and FedEx Smart Post. The USPS Direct Global Entry service allows high-volume parcels from e-retailers to be processed with USPS labels from the country of origin and cleared like usual.

CrimsonLogic Solutions for Section 321 Ground Handling

CrimsonLogic is here to help trade participants simplify global e-commerce and make it cost-effective for everyone, especially small and medium-sized enterprises (SMEs).

Electronic Air Waybill (eAWB)

Electronic air waybills greatly streamline the exchange of information between agents and airlines and make air cargo transport faster, more reliable and more affordable. eAWBs mean more accurate data and less expense. Businesses save time and money while reducing their carbon footprint by eliminating paper processing altogether.

CrimsonLogic electronic air waybill service consolidates connectivity among ground handling agents and freight forwarders that work with multiple airlines. Instantly connect to over 190 international airlines and choose from multiple eAWB transmission options: online submission/upload or host-to-host direct system integration. Subscribers benefit from reduced airline fees for eAWB transmission, improved data accuracy and reduced wait times at the airline.

CrimsonLogic eCommerce Managed Services

Combining ECCF clearance with low-cost USPS or parcel post delivery is one of the cheapest ways to clear Section 321 parcel shipments. CrimsonLogic eCommerce Managed Services is an alternative to ECCF clearance but without the $1 express customs fee per HBL. Customers also get additional airport and pricing options that would otherwise have been unavailable. Note that clearance may take 2-5 days depending on the airport.

CrimsonLogic eCommerce Managed Services also include scalable technology, brokerage assistance (with HS code classification), airport ground handling and shipment deconsolidation for last mile delivery. CrimsonLogic provides industry-leading technology and years of global trade expertise to help importers obtain shipment release within 24 hours of arrival while keeping costs down and optimizing customs compliance.

All CrimsonLogic solutions are flexible and can be tailored to specific business needs. Software can be subscribed on the fly and accessed online from anywhere in the world, or it can be integrated with existing systems for seamless filing. CrimsonLogic can also file customs documentation, including eManifests, eAWBs and Section 321 type 86 entries, on your behalf. Expert assistance is available 24/7 if you run into compliance, ecommerce or logistics problems.

Learn more by visiting our page on section 321 ground handling or contact us today!

Contact CrimsonLogic today for more information on e-Commerce solutions!

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