What Is a Section 321 Type 86 Entry?

On September 28, 2019, the US Customs and Border Protection (CBP) launched a filing process for Section 321 Type 86 Entries to help improve the flow of imports into the US. According to the CBP, only merchandise shipments imported by one person that fall under a total daily value of $800 will qualify for this type of entry.

Orders that meet these requirements will then be released through the revamped Automated Commerce Environment (ACE) importing platform and officially exempted from any taxes or duties, which is the main attraction to online sellers for obvious reasons.

More than 1.8 million packages that sufficiently address the CBP’s criteria for a Type 86 Entry enter the US every day. The US organization’s previous electronic filing system, or the Automated Brokerage Interface (ABI), didn’t provide any support for self-filers or brokers that needed clearance for their smaller, less valuable e-commerce packages. Now, with a more efficient and cost-effective program in place that accelerates the flow of these kinds of imports, retailers can better manage rising costs, volumes, and pandemic threats to ensure their customers’ orders keep moving.

The Benefits Go Beyond Saving on Duties

When handled properly, Section 321 Type 86 Entries present many additional opportunities to both save money and improve delivery speed.

From a speed-to-market standpoint, Type 86 Entries avoid many of the time-consuming steps in a typical retail supply chain process. With orders arriving in the US literally packaged for delivery, they can be immediately entered into the final-mile delivery carrier’s network (be it UPS, FedEx, USPS, etc.) and avoid additional handling and transportation.

Many warehousing and fulfillment costs can be avoided altogether because services like inventory storage and carrying costs go away. Some packaging and fulfillment costs are still incurred, but they’re essentially pushed upstream to an overseas facility that’s preparing the orders for delivery in a lower-cost environment.

If you want to truly maximize the value of Section 321 Type 86 Entries, however, you’ll need a customs broker with an automated filing process that efficiently consolidates a high number of orders. Boosting productivity for imports requires digital solutions that simultaneously enable automated billing and ratings in addition to managing multiple submissions of master bills with thousands of attached house bills.

Take These Steps to Get the Most Leverage

Shippers should look for forwarders and customs brokers who offer end-to-end visibility from order placement to order fulfillment if they want to get the best use out of Section 321 Type 86 Entries. Today’s consumer expects to be kept in the know when it comes to the status of their product’s customs clearance and in-transit movements. Without logistics services providers who can contribute this level of insight, it’s difficult for online retailers to really reap all the rewards.

The CBP takes Section 321 Type 86 Entry eligibility pretty seriously, meaning they’re a lot more likely to carefully check that any shipment attempting to file under a Type 86 Entry accurately complies with their regulations. There are also many different exceptions for Section 321 shipments that you need to keep track of during this process. For example, certain alcohol and tobacco goods or products subject to inspections and specific quotas won’t make the cut to qualify, so it’s important to verify that your shipments are actually eligible before officially filing.

Cutting costs and increasing revenue have both been huge priorities for most in the retail industry following the devastating disruptions that COVID-19 has produced over the past couple of months. Luckily, the CBP’s introduction of Section 321 Type 86 Entries could not have come at a better time for importers struggling to cope with ever-expanding e-commerce demands.

Geoff Tice is President of Kesco Logistics (www.kescologistics.com), a full-service freight forwarder and customs broker headquartered in New York, with locations around the world. Kesco specializes in serving the retail industry with end-to-end supply chain solutions that include foreign fulfillment, customs clearance, ocean- and air-freight, and truckload solutions. Visit www.kescologistics.com to learn more.

This article originally appeared in the Fall 2020 International issue of PARCEL.