UPS Returning or Disposing US Bound Packages

The NBC News story reports that UPS has begun disposing of or destroying U.S.-bound international packages that repeatedly fail to clear customs under newly tightened tariff and import rules. Many packages are being held or destroyed after three failed attempts to submit required customs paperwork.

These disruptions stem from the Trump administration’s abrupt end to the de minimis tariff exemption, which had allowed packages valued under $800 to enter the U.S. duty-free. The sudden termination of that program has overwhelmed customs systems, causing massive backlogs, increased scrutiny, and loss of packages.

Many smaller shipments — often from e-commerce sellers or individuals abroad — are now subject to full import duties, stricter documentation, and more rigorous checks. UPS acknowledged that missing or incomplete paperwork is triggering many of the disposals.

Customers and small businesses have reported chaos: notifications of import scans days before delivery, lengthy holds at customs, surprise tariff or brokerage bills, and then, in some cases, notices that the package is “undeliverable” and will be destroyed.

The story highlights that UPS is not alone: other carriers, including the U.S. Postal Service, have also faced delays, and global mail services at one point suspended U.S. deliveries amid confusion over the new rules. (See related coverage)

The consequences are especially harsh for small businesses and international vendors who rely on cross-border shipments to maintain inventory, fulfill customer orders, and generate revenue. Many fear losses if goods are destroyed or delayed indefinitely.

Main Points

Package destruction: UPS is disposing of U.S.-bound shipments when customs paperwork fails multiple attempts.
Policy shift root cause: The end of the de minimis tariff exemption has forced many previously duty-free packages into full import processing.
Documentation breakdown: Incomplete forms or missed requirements are triggering customs rejections and product loss.
System stress: Customs and postal systems are unprepared for the surge in packages needing tariff processing.
Small business risk: International sellers and businesses that depend on mail-based sales face revenue losses, stock disruptions, and reputational harm.
Consumer impact: Ordinary shoppers ordering goods overseas may experience surprise fees, indefinite delays, or cancellation without remedy.

Effects on International Shipping & Small Business

Cost escalation: The removal of the de minimis exemption means every package, no matter how small, may now incur duties, brokerage fees, and processing costs that erode margins.
Inventory risk: Small sellers often maintain limited stock; delays or destruction of inbound goods can leave them unable to fulfill orders, damaging customer trust.
Cash flow strain: Sellers might pay tariffs or brokerage fees in advance for items that never arrive; the capital is tied up without return.
Barrier to entry: International vendors may find U.S. markets less viable, reducing competition and raising prices.
Logistics complexity: More paperwork, stricter compliance demands, and customs navigation increase the operational burden on small-scale exporters.
Lost consumer confidence: Shoppers may hesitate to order internationally if risk of loss, surprise fees, or delays becomes too high.
Data on volumes: One report indicates international shipments plunged 81% immediately after the de minimis policy ended. Reuters

Projections & What Could Lie Ahead

Potential Positive Outcomes (Pro)

Greater tariff enforcement: The policy may reduce goods entering underpriced or misdeclared, leading to more accurate revenue capture.
Formalization of trade: More small businesses may integrate with formal import systems, improving legal compliance and accountability.
Investments in customs infrastructure: To avoid future chaos, customs agencies and carriers may modernize systems, digitize paperwork, and expand capacity.
Rebalancing supply chains: Some vendors might localize production or shift to domestic suppliers to avoid cross-border risk.

Potential Negative Outcomes (Con)

Business failures: Many small sellers may not survive losses from destroyed inventory or unfulfilled orders.
Reduced global e-commerce: Marketplace diversity could shrink as cross-border trade becomes more burdensome.
Unpredictable consumer costs: Buyers may face opaque or inflated fees long after placing orders, discouraging cross-border commerce.
Legal disputes: Carriers, customs agencies, and customers may see rising litigation over lost or destroyed goods.
System overload & inefficiency: If customs agencies cannot scale properly, backlogs may persist, causing cascading delays in all imports.
Retaliatory trade responses: Some exporting countries might retaliate with tariffs or stricter export controls if cross-border trade becomes hostile.