Some of UPS’s problems getting packages into the US might have a simple cause. The company’s CEO said people aren’t used to providing customs information on US-bound shipments.
UPS saw a rise in customers shipping packages into the US starting in August, CEO Carol Tomé said, after the Trump administration ended a loophole that had allowed low-value shipments to enter the country tariff-free. Some national postal services, such as Germany’s Deutsche Post, temporarily stopped accepting US-bound packages because of the change.
Many of those new UPS customers were average consumers who were “naive” about what information they had to provide for their shipments to clear US customs, Tomé said on the company’s third-quarter earnings call Tuesday.
“You wouldn’t expect them to understand the intricacies of trade policies, and they shipped in packages that didn’t have the information necessary to clear,” Tomé said.
On the call, Kate Gutmann, EVP and president of international, healthcare, and supply chain solutions at UPS, said many of the held-up shipments contained food products. She said more customers have started using national postal services for those shipments, as many have resumed shipping to the US.
In late August, the Trump administration ended the de minimis exemption. This change subjected packages worth less than $800 to tariffs as they entered the US.
Getting some of those packages to their destinations has been a chore, said several people who sent or expected to receive them.
For example, some UPS customers told Business Insider that, since late August, they had received bills from UPS showing that the wrong tariff code, such as a 200% tariff on Russian aluminum, was applied to their shipment.
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Others said that UPS has marked their packages for disposal, even after they paid any tariffs or provided more details about what they were bringing into the US.
While some of the UPS customers that Business Insider spoke with were individuals, others were business owners with years of shipping into the US. One Canada-based customer said he emailed Tomé multiple times about a package that appeared lost in UPS’s network.
Tomé said the volume of packages that UPS shipped into the US skyrocketed when the de minimis exemption ended.
In March, UPS handled about 13,000 packages a day that needed to clear customs as they entered the US, she said. By September, the first full month after the end of the de minimis exemption, the company was handling about 112,000 such packages each day.
UPS was able to automatically process about 90% of those shipments with the help of technology, including AI, Tomé said. But 10% needed “manual intervention,” she said.
“Where they needed some help, they really needed some help,” she said.
Do you have a story to share about UPS? Contact this reporter at abitter@businessinsider.com.
