Updated: July 15, 2025
Reducing Costs & Simplifying Shipping with Section 321
We’ve written extensively on Section 321 in the form of our Section 321 comprehensive guide as well as on the latest changes as of 2024. Here, we expand on the topic of its benefits to businesses. After all, Section 321 entries have skyrocketed as per Customs and Border Protection data that shows 685 million entries were made under Section 321 in 2022, up 67% from 2018. Section 321 offers a way to avoid many of the costs of doing business across our borders. From allowing duty-free imports of low-value goods, Section 321 directly contributes to businesses saving on import taxes and reducing shipping times. However, significant policy changes in 2025, including the removal of the exemption for imports from China and Hong Kong effective May 2, 2025, and a full repeal for commercial imports effective July 1, 2027—mean businesses should plan for reduced benefits over time. We delve into these and other topics below.
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What is Section 321?
Section 321, established by the U.S. Customs and Border Protection (CBP), permits businesses to import low-value goods—those worth $800 or less—into the U.S. without paying duties or taxes. This “de minimis” threshold allows companies to reduce shipping costs and streamline customs clearance. The law was updated in 2015 by the Trade Facilitation and Trade Enforcement Act (TFTEA), raising the de minimis value from $200 to $800, making it even more beneficial for ecommerce businesses.
The Main Benefits of Section 321 for eCommerce
Reduced Business Expenses
The most significant benefit of Section 321 is the potential to reduce overall shipping costs. By avoiding duties and taxes on low-value goods, businesses can manufacture or source products from countries with lower production costs—such as Mexico—and import them to the U.S. without the added expense of customs tariffs. (Note: As of May 2, 2025, this no longer applies to goods from China or Hong Kong, where businesses previously avoided Section 301 tariffs under the $800 threshold; the full repeal in 2027 will end this for all commercial imports.)
For example, businesses that would otherwise be subject to tariffs on eligible goods can avoid those costs under Section 321, provided the goods meet the $800 de minimis threshold and current restrictions. This reduction in import costs allows companies to maintain competitive pricing and improve profit margins, though businesses should prepare for transitions as the exemption phases out.
Streamlined Shipping Process
Section 321 also accelerates the shipping process by reducing the paperwork required for customs clearance. This minimizes delays at the border, allowing goods to reach U.S. customers faster. Ecommerce businesses can benefit from Entry Type 86, a system that enables qualified participants to file shipments electronically through the Automated Broker Interface (ABI), expediting the release of goods.
With fewer customs requirements and automated data entry, businesses can offer faster, more reliable delivery, enhancing the customer experience.
Improved Customer Experience
Speedy delivery is a table stakes factor in ecommerce success. Leveraging Section 321, businesses can offer faster cross-border shipping, which is increasingly important in a market where consumers prioritize quick delivery. The streamlined process ensures that international shipments can enter the U.S. more quickly, providing a competitive edge and boosting customer satisfaction.
Flexibility and Scalability
Section 321 gives businesses flexibility in sourcing and fulfillment. By storing inventory in fulfillment centers near the U.S. border—such as in Canada or Mexico—companies can reduce delivery times to U.S. customers while benefiting from tax-free imports. This strategy not only helps cut logistics costs but also allows businesses to cater to the U.S. market more effectively, offering affordable shipping options and faster delivery.
Further, utilizing Speed Commerce or other partners that specialize in Section 321 can provide end-to-end services, simplifying the process and ensuring compliance.
Best Practices for Using Section 321
To maximize the benefits of Section 321, businesses should adhere to a few key practices:
- Monitor Shipment Limits Section 321 allows only one duty-free shipment per importer, per day. Businesses need to coordinate with their fulfillment partners to ensure they don’t exceed this limit, as multiple claims can lead to penalties—including new civil penalties starting August 4, 2025 ($5,000 for the first violation and up to $10,000 for subsequent ones when violating U.S. customs laws via de minimis attempts).
- Accurate Documentation CBP requires proof of the fair retail value of goods, along with consignee names and addresses. Ensuring that all paperwork is accurate and complete will help avoid delays and ensure smooth customs clearance.
- Automate ACE Entries For faster processing, businesses should utilize the Automated Commercial Environment (ACE) system. Automating customs entries through Entry Type 86 simplifies the data submission process, speeding up customs clearance and minimizing manual paperwork. This is particularly useful for high-volume businesses that import goods regularly.
