According to Business Insider, UPS CEO Carol Tomé revealed on the company’s third-quarter earnings call that packages are being delayed for weeks due to incorrect customs declarations from inexperienced shippers. The crisis began in August when the Trump administration ended the de minimis exemption, causing UPS’s daily customs-cleared packages to skyrocket from 13,000 in March to 112,000 by September. Tomé described many new customers as “naive” about required customs information, with 10% of shipments needing manual intervention despite UPS’s AI systems automatically processing 90%. Customers reported incorrect tariff applications, including 200% rates meant for Russian aluminum, and packages marked for disposal even after paying duties. This breakdown in customs processing reveals deeper systemic issues in global trade infrastructure.
Table of Contents
The De Minimis Domino Effect
The elimination of the de minimis exemption created a perfect storm that neither shippers nor carriers were prepared to handle. For years, this loophole had allowed low-value shipments to bypass complex customs procedures, creating an entire ecosystem of small-scale international commerce that operated with minimal paperwork. When this safety net disappeared overnight, it exposed how dependent modern e-commerce had become on simplified cross-border logistics. The immediate consequence was predictable: national postal services like Germany’s Deutsche Post temporarily halted US-bound shipments entirely, forcing those volumes onto private carriers like UPS without adequate preparation time. What’s particularly telling is that even experienced business shippers with years of cross-border experience found themselves caught in the chaos, suggesting this isn’t merely an issue of consumer education but rather a fundamental breakdown in communication between regulatory changes and practical implementation.
The Automation Gap in Customs Processing
While UPS’s achievement of automatically processing 90% of shipments through AI systems sounds impressive, the remaining 10% requiring manual intervention represents a critical failure point in high-volume logistics. In the context of 112,000 daily packages, that’s over 11,000 shipments each day needing human review—a volume that would overwhelm even the most robust manual processing teams. The reality is that current AI systems struggle with the nuance and complexity of customs declarations, particularly when dealing with incomplete or contradictory information from inexperienced shippers. This isn’t just a UPS problem; it’s an industry-wide challenge where the gap between technological capability and real-world application becomes most apparent during periods of rapid regulatory change. The fact that food products specifically became problematic suggests that certain categories of goods have particularly complex classification requirements that neither shippers nor automated systems handle well under pressure.
Broader Implications for Global E-commerce
This situation exposes a fundamental vulnerability in the global e-commerce supply chain that extends far beyond UPS. As CEOs across the logistics industry watch this unfold, they’re likely reevaluating their own customs clearance capacities and customer education programs. The shift from business-to-business shipping dominated by professional logistics managers to consumer-to-consumer and small business shipping means that carriers now bear responsibility for educating millions of occasional shippers about complex international trade regulations. What makes this particularly challenging is that customs requirements vary not just by country but by product category, value, and even the shipper’s history—creating a multidimensional problem that resists simple technological solutions. The temporary withdrawal of national postal services from US-bound mail indicates that even government-backed entities recognized they lacked the infrastructure to handle this new regulatory environment.
The Road Ahead for Cross-Border Shipping
The resolution to this crisis will require more than just better customer education or improved AI systems—it demands a fundamental rethinking of how cross-border e-commerce interfaces with customs enforcement. We’re likely to see increased investment in pre-shipment validation tools that help shippers complete declarations correctly before packages enter the system. There’s also growing pressure for standardized digital customs platforms that can integrate with multiple carriers and regulatory agencies. For small businesses and individual shippers, the era of frictionless international shipping may be ending, replaced by a new normal where customs compliance becomes as fundamental to the shipping process as addressing and postage. The companies that succeed in this environment will be those that recognize that technology alone cannot solve human factors—the solution requires combining sophisticated systems with intuitive interfaces and proactive customer support.
