Global expansion is in the cards for a majority of e-commerce retailers, according to a survey by DHL Express US of its online vendors released on June 27. In that survey, more than 53% of 1,000-plus DHL Express small and medium-sized enterprise customers based in the U.S. said that they see international growth as the biggest opportunity for e-commerce business. The most favored target markets were the EU, the U.K., Mexico and Canada, with China and Southeast Asia coming in at 14% each. 

This is indicative of a shift by U.S. retailers toward feeling comfortable sending products abroad, says Greg Hewitt, CEO of DHL Express US. It’s also good news for a delivery company that tried and failed to establish a domestic express delivery market in the U.S. in the late 1990s, beaten back by UPS and FedEx into a business strategy that focuses entirely on cross-border deliveries. “The e-commerce boom fit nicely with our retrench restructure, because we’re in a good position to help the globe sell to American consumers, and to help American businesses tap into new markets where they haven’t sold before,” says Hewitt. 

That situation is only going to get better, judging from these survey results.

“When we started focusing on international shipments only, it was less than 10% of the overall market, and that was mostly Canada, and maybe the U.K. and Australia,” Hewitt explains. “What we’ve seen over last 10 years — and it accelerated during the pandemic time — is that businesses are thinking differently.”

This is largely due to a more sophisticated approach from online vendors. In the past, a shopper in another country would rarely be offered conversions into their own currency, or even language translation, and actual landed cost was a real sticking point. Not only would currency conversion rates be hard to pin down, but so were any customs or duties accruing on items. That made it hard for a shopper to make a true cost comparison with a potential purchase from a local provider in their own country. Transit times, too, were unpredictable. 

“It made for a really bad customer experience,” says Hewitt. “Now, vendors can show exactly how much it will cost in the consumer’s currency and give an accurate delivery time, too. So a lot of U.S. businesses are recognizing opportunities outside of the U.K. and Canada,” he added, noting that interest in shipping more to Mexico seemed like an “interesting” development. “All of a sudden you don’t have to order local, because you can order cheap and fast [from abroad], including duties and taxes.”

One potential fly in the ointment is the looming possibility of increased tariffs on internationally sourced goods, and a lowering of the “de minimis” value at which small shipments incur duties — both of which appear likely under a Republican-run government after the November U.S. presidential election. Hewitt says Customs and Border Protection (CBP) are currently more interested in protecting intellectual property rights, and stopping outright fraud in terms of woefully under-valuing the contents of shipments, rather than catching packages just above the limit, which is currently $800. But he points out that the U.S. has one of the highest de minimis levels in the world. “Should we take that down and be more like some of the other nations, including Canada and Mexico? It’s legitimate that that’s being debated,” he says.

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He points to another issue that springs from better, more widely available data being available to the CBP. In theory, the de minimis limit applies to each recipient in aggregate, and per day, not just to individual packages. “So, if you order a number of different things from different websites with different carriers, you could exceed the de minimis limit, and you should be paying duties and taxes,” Hewitt explains. He says the CBP is putting pressure on carriers to collect the information so they can make sure the importer of record is not avoiding duties by carving up shipments into packages that fall under the limit. This is a challenge when there are multiple carriers and they’re expected to coordinate. He asks: What happens if the importer is found to have exceeded its de minimis limit for the day? Which order takes precedence? 

In any case, Hewitt says, there’s now definitely more scrutiny overall from CBP of small international shipments coming into the U.S., particularly because of the crisis with illegal imports of opioids such as fentanyl. However, a significant shift in duties policy would put an incredible strain on the authorities, Hewitt warns. 

“I’m concerned about these protectionist policies —  the idea that it has to be made in America by an American. You can get swept up in the emotion of ‘This is good for American business,’ and say, ‘Let’s drop the de minimis and let’s go.’ But CBP couldn’t handle the volume, and it would be a catastrophe for consumers and businesses.” All the same, change is a constant factor in international parcel delivery, and carriers are more nimble at adapting than most importers and exporters, Hewitt argues.

“So if you ask me about [reducing] de minimis, we’re all for open trade, but I can adapt as long as I have time to ramp up and understand it,” he says. “If things need to change in trade policy, fine, but make sure we have the time to implement correctly. Look at Brexit. There was a long time for people to ramp up and plan effectively.”