The de minimis threshold, a key facilitator of global trade, has been instrumental in encouraging the seamless movement of goods into the US.
Its increase, though perhaps unexpected, has sparked a surge in e-commerce, leading to unprecedented cargo volumes.
This underscores the need to preserve the de minimis threshold and ensure adequate funding for US Customs & Border Protection (CBP) enforcement staffing, a move that will continue to benefit global trade.
Since its increase, the de minimis threshold has significantly contributed to the e-commerce boom, allowing small businesses and consumers to engage more freely in global trade.
This policy has enabled quicker and more cost-effective cross-border transactions, benefiting countless enterprises and customers.
The air cargo industry has seen incredible growth, reflecting the increased demand for air cargo services amid the e-commerce surge and supply chain disruptions.
The number of businesses, including airports, airlines, freight forwarders, air cargo tech companies, and others involved in the air cargo industry, has grown consistently since 2020.
In January 2020, there were 5,982 establishments, which had risen to 7,481 by October 2023.
This growth contrasts sharply with the modest increase of only about 200 new air cargo establishments from January 2018 to January 2020, underscoring the transformative impact of the de minimis threshold on the industry.
This growth can be attributed to several factors. The surge in e-commerce has created a demand for faster and more reliable deliveries, a need that air cargo meets effectively.
Disruptions in global supply chains and geopolitical events have further underscored the importance of reliable air cargo services, making the industry's growth crucial.
Looking ahead, the air cargo market is expected to be worth $74bn by year-end and $160.2bn by 2031. Technological advancements like drone delivery and autonomous air vehicles are set to revolutionise the industry further.
However, this growth is contingent upon addressing ongoing challenges, such as rising fuel costs, potential trade restrictions, and insufficient infrastructure at major airports.
Maintaining the current de minimis threshold is essential for sustaining this growth. It simplifies the import process for low-value goods, reduces administrative burdens, and lowers costs for businesses and consumers.
However, to ensure that incoming shipments meet value and declaration requirements, CBP needs adequate funding for enforcement staffing. This will help balance the benefits of the de minimis threshold with the need for effective oversight and compliance.
Additionally, with the current and anticipated increases in air cargo volumes arriving at US gateways, there is an urgent need for more government funding to address airport cargo area truck congestion concerns.
The increased air cargo volume has led to significant congestion issues at airport cargo areas, causing delays and inefficiencies. Adequate funding is required to expand and improve airport infrastructure to handle the growing demand and ensure smooth and efficient cargo operations.
The de minimis threshold has proven to be an effective tool for encouraging global trade and supporting the air cargo industry's growth.
As we look to the future, it is crucial to maintain this threshold while ensuring that CBP has the resources needed to enforce compliance. Additionally, addressing airport cargo area congestion through increased government funding is essential to accommodate the rising air cargo volumes.
Doing so will continue to foster a thriving environment for global trade, benefiting businesses, consumers, and the economy.
