Commissioner says E-commerce Challenges Regulators and Shippers Alike
Electronic commerce is a booming business, but it’s putting a strain on U.S. Customs and Border Protection’s land, sea and air ports of entry, Commissioner Kevin McAleenan told guests at the U.S. Chamber of Commerce’s 6th Annual Global Supply Chain Summit, Tuesday, in Washington, D.C.
The numbers are staggering. Office of Trade records show that e-commerce resulted in nearly a 50 percent increase in express consignment billings in five years and a 300 percent increase in international mail. In fiscal 2013, the agency processed 150 million international mail shipments. By fiscal 2017, that number was over 500 million shipments.
The explosive growth in e-commerce, particularly small parcels, is also outpacing the ability of retailers and carriers to handle the volume. Almost 80 percent of Americans shop online, and the global e-commerce market is now $2.29 trillion in sales, the Commissioner pointed out, citing statistics from the Pew Research Center and the U.N. Conference on Trade and Development.
E-commerce shipments pose the same health, safety and economic security risks as container shipments, but with a higher volume. Criminals see drugs and other contraband shipped in small packages as less likely to be discovered and counterfeiters can now ship directly to consumers and retailers. “Just consider the damage that counterfeit brake pads or air bags or cosmetics or pharmaceuticals can do,” McAleenan said.
CBP is taking action to address the challenges of e-commerce that protects consumers while supporting legitimate business. The agency is reaching out to foreign and domestic stakeholders to share advance electronic data and create incentives for carriers to comply with U.S. laws and regulations. “Our risk management practices can no longer focus on traditional shipping methods,” he said, especially for goods arriving from unknown or less experienced importers.
CBP is also bringing federal agencies together to share critical information. One example, McAleenan said, is the Commercial Targeting and Analysis Center, a law enforcement partnership focused on targeting shipments that pose a risk to safety and investigating environmental crimes, illicit wildlife shipments and cultural property trafficking.
The center’s joint targeting and enforcement efforts resulted in 243 seizures of unsafe imported products in fiscal 2017 worth more than $3.8 million, figures CBP provided at a March Senate Finance Committee hearing. CBP is also establishing relationships with state and local government in supply chain awareness.
CBP will use analytics and data mining to recognize trends, threats and anomalies to identify high-risk shipments. “We recognize technology is key for this effort,” McAleenan said.
CBP is also continuing its national media campaign to highlight the dangers of illicit goods and doing business with illegitimate sellers or buying counterfeit merchandise.
“The stakes have never been higher as we balance border security and trade facilitation in an increasingly competitive and complex global environment,” the Commissioner said. “The global supply chain is changing and CBP is changing with it.”