EU Customs Guidance Drops: 28 Days to July 1 | Decoding Cross-Border Ecommerce | Ep #79

The EU just dropped its implementation guidance for the July 1 customs change — and we're now less than 30 days out. Same kind of fire drill the U.S. ran last year on qualified party, just with more pages to read and more puzzles to solve.

In this episode of the Decoding Cross-Border Ecommerce podcast, Clint Reid, Founder and CEO of Zonos, and Aaron Bezzant, Zonos' Head of Global Trade Strategy, dig into the freshly published 32-page guidance and what it actually means for shippers, postal operators, marketplaces, and consolidators preparing for July 1, 2026.

They unpack the H7 vs. H1 vs. H6 declaration types and how the €3-per-line-item fee really works (hint: it's not per parcel — it's per HS subheading, and consolidation matters), the surprise gotcha that you can't use IOSS if you want preferential trade agreement treatment, why the EU explicitly does not want carriers collecting on delivery from consumers, the postal carve-out for UPU shipments that lets origin posts designate an EU declarant, and the express-carrier scramble to collect powers of attorney from every shipper.

The conversation also covers what's coming November 1 (product identifiers: manufacturer number, merchant number, and the optional standardized GTIN/EAN/UPC), the broader trend — the U.S. shifting from qualified party to broker-enabled clearance later this summer — and how Zonos is positioned to help, with our new Netherlands office, our U.S. broker license, and the postal infrastructure already moving the majority of postal volume into the U.S.

🎧 Tune in for a clear-eyed read of the new guidance, the trade-offs hiding inside the H7 vs. H1 decision, and what to do in the 28 days before July 1.

Chapters
[00:00:00] EU implementation guidance just dropped — 28 days out
[00:00:32] Déjà vu from the U.S. qualified party 30-day fire drill
[00:01:00] Disruption scale: the U.S. was a 10, the EU is a 7
[00:01:40] What the 32-page guidance confirms (and what surprised us)
[00:02:24] When does a joke become a dad joke?
[00:02:54] Duty-free is dead — except for the €45 gift exemption
[00:03:38] The €3 duty: per line item, not per parcel
[00:04:12] H1, H7, and H6 — the EU's clearance types
[00:04:30] H1: 10-digit HS, country of origin, full data
[00:05:20] H7: simplified, 6-digit HS, no country of origin
[00:05:58] Why H7 consolidation matters — the anorak example
[00:06:30] H7 trade-offs you shouldn't ignore
[00:07:11] Why €3 and not ad valorem (yet)
[00:07:30] The parallel to the U.S. QP technical limitations
[00:08:44] 2028: standard duty calc and the EU Data Hub
[00:09:21] Can you skip IOSS to skip the €3? No.
[00:09:32] Preferential trade agreements: yes, but…
[00:09:50] To get FTAs you have to move to H1 — and lose IOSS
[00:10:30] Lose IOSS, lose bulk clearance in the Netherlands
[00:11:30] How the decision tree forces logistics choices
[00:11:38] Consolidators vs. integrators on FTAs
[00:12:20] Postal and FTAs: same rules, different practicalities
[00:12:50] The mixed-shipment math — when FTAs are (and aren't) worth it
[00:14:54] Returns: non-refundable, with no real exception
[00:15:38] How merchants should think about H7 vs. H1
[00:16:34] Express carriers chasing powers of attorney from shippers
[00:18:01] DHL/FedEx/UPS billing DDP — and the marketplace concern
[00:18:34] The postal carve-out for UPU shipments
[00:19:09] Origin posts can designate an EU indirect representative
[00:19:48] What "declarant" actually means — and the liability cascade
[00:21:02] Australia Post example: one EU declarant for all volume
[00:21:30] No surprise collection on delivery — the EU said so
[00:22:01] Duty is for businesses, not a tax on consumers
[00:23:31] Could July 1 get delayed?
[00:24:09] The smaller-country knock-on effect
[00:24:27] How Zonos is helping — prepay app, postal volume into the U.S.
[00:24:53] Recent go-lives: Colombia, Togo
[00:26:11] Why Zonos' new Netherlands office matters
[00:26:20] Acting as the declarant in the EU
[00:27:36] Commercial carrier rails vs. postal: what's still being built
[00:28:36] Don't forget: November 1, product identifiers kick in
[00:29:21] Manufacturer, merchant, and standardized identifiers
[00:30:33] Why the standardized identifier (GTIN/EAN/UPC) is optional
[00:31:32] The next five months: EU + U.S. + November 1
[00:32:24] The two-line summary: compliance is ratcheting up — and they want their money

Transcript

SPEAKER_01 0:06

Welcome to another episode of the Decoding Cross-Border E-Commerce Podcast. Aaron, uh, I think we talked about this last time, uh, but now we have information on the guidance on the de minimis change into the EU. It's June 3rd, and this goes in uh today. Yes, today is June 3rd. Yes. Yes, yes, no, so and the changes go into effect July 1st. And when did the guidance come out? Uh the implementation guidance came out today. Today, all right, everybody.

SPEAKER_00 0:35

We have uh less than Are you having a case of deja vu? Yeah, this is like US 30 day. And this might not be the last case of deja vu we have this summer either. So and that was uh that was a pretty chaotic 30 days. Yeah, I think we I think we've got a I think we've got a double header coming up this summer between the EU changes and probably more stuff coming out in the US. We'll we'll table that. Let's hope for a few days.

SPEAKER_01 1:05

Let's zoom out. Comparing it to the US, how disruptive is this? Do how disruptive was the US on a scale of one to ten? And how disruptive is this on a scale of one to ten?

SPEAKER_00 1:17

US is more disruptive, was more disruptive for sure.

SPEAKER_01 1:20

It was like a 10 in disruptive. I don't know how it could have been.

SPEAKER_00 1:22

That was pretty bad. Um let's give this one uh let's give this one a seven.

SPEAKER_01 1:28

Uh pretty disruptive.

SPEAKER_00 1:29

Yeah.

SPEAKER_01 1:30

So all right. So what what's happening? Just tell to generally, what is it? What's the what's the change? Talk to us.

SPEAKER_00 1:39

Yeah, and actually, you know, uh, we kind of put this together quickly because we had the the guidance that just rolled out. We knew this was coming, and then the details that a lot of the questions operationally and implementation-wise, that like we're waiting for a document to come out. Now we just got a 32-page document that I feel like I went back to school today going through this document. But you were so excited. Talk to me about what you found in the document. You're like Clint. Tons of exciting things. Nuance, this nuance, we'll get to the fun stuff at some point. Mostly what I expected, but you know, some surprises in there too. Um, but I think to start with, we usually have a dad joke, right? We usually do, I usually try to weave it in naturally. I'm not gonna do that this time. Okay, but I do have a question for you. Like, when does a joke become a dad joke? I don't know. When the punchline is apparent. Ah, jeez.

SPEAKER_01 2:38

I told you, don't tell me the joke beforehand. I usually don't know when they're coming. And so everybody gets to watch me real time if they're watching or even care how slow I am on the uptake. That was good.

SPEAKER_00 2:48

That was good. All right. So, and the other thing that wasn't apparent, apparent, was all the details of this EU uh stuff that was coming out. What we knew was come July 1st, EU was removing their 150-year-old de minimis. We also knew that they're gonna put in some simplified duty calculations for B2C shipments into the EU. So um, you know, kind of the high-level stuff we knew. Uh, all that was really confirmed with this implementation guidance of and think of it, think of it this way: the there's a lot of details about the what-ifs and how does it affect B2B? How does it affect C2C shipments? What happens is de minimis goes away. Duty-free is dead, duty-free is 150 uh except for gifts. There's still a 45 euro gift um de minimis. Now it's the standard duty calculation for everything where duty applies except B2C shipments under 150 euro. And that is where this 3 euro fee gets thrown around, which is it's a duty. It's a three euro duty, and it's charged per line item. So it's not based on value, it's not anything else, it's per line item on the declaration. What does per line item mean? Ooh, that's a good question. You'd think that would be a straightforward answer, and it for the most part it is. Um it's so they in the EU they have some simplified clearance processes. What they call as an H7 is what's going to apply to most of these shipments. And on this H7, why do they call it that? I don't know. Oh, okay. It's just a number. I mean, why do they call it a type 11 or type 1? I see, I see. It's it's it's a clearance model, right? H1 is more of the formal model, but it requires all the data elements. And so let's let's talk with the H1. Okay. Okay. Let's do a little a little game here on how you can define a line. An H1 requires a full 10-digit HS code, description, um a country of origin, right? And then of course the values. What type of shipments are going in H1 today? Uh shipments for sure that over 150 euro. Okay.

SPEAKER_01 5:05

So even small package shipments over 150 euro H1s.

SPEAKER_00 5:07

Yep. Okay. Um and the the typical example of a or definition of a line item is by HS code description country of origin. Yep. Now, if you move to the simplified H7, which can be used for shipments under 150 euro. Now, there's another one called an H6 for postal specific up to 1,000 euro. We don't, it's simplified. We won't talk about it much. Most of what's going to be used in both postal and commercial will be that H7. The required datum elements are a six-digit HS code, no country of origin.

SPEAKER_01 5:42

So now you can so the same shipment in an H1 would have three line items. And if it's you're going to do it um with the simplified H7, it's what you can put those all in one line item. As long as they share the same digit subheading. Six-digit subheading.

SPEAKER_00 5:59

Give me an example of a good that would typically have a whole bunch of different ten-digits um, well, they gave people in this, in this, they gave an example of like uh an Anorak, a wind cheater, and a wind jacket that might actually have different HS codes at the at the eight and ten digit level, but at the six they share the same. And they show that example of like, hey, actually combine all of these into one line item and pay the pay one three euro fee. But if it goes to an H1, it's now nine euros because each one's actually a different HS code. So there's advantages for consolidation on this simplified clearance process that um is interesting because they they can even be made in different countries, but it doesn't matter because on that H7 they don't ask for it. But there's a lot of trade-offs here. We'll get to them. There is, there is.

SPEAKER_01 6:43

So don't don't walk away from this episode right now thinking that everything should go in as an H7.

SPEAKER_00 6:47

Yeah, everything's great. So H7 can be used for everything under 150 euro. That does not include and that does not include excise goods or prohibited or restricted goods. Okay, but that's gonna be the so the line share of e-commerce will be using H7 on these on these low-value shipments, and we'll use that consolidation logic on the declaration. Now, do you know why they're doing this three euro duty and not just regular ad velorum duty?

SPEAKER_01 7:11

Uh I was gonna ask you that question, but let me try to answer it.

SPEAKER_00 7:15

Yes, please.

SPEAKER_01 7:16

Um let's speculate here. Postal? It's super complicated the the answer. The postal difficulties in calculating duties. Really? It's not just postal. No. Well, I mean, I know what this has to do with China. Like, you know, all the things that are.

SPEAKER_00 7:30

But why didn't they just say why don't they just do ad valorum?

SPEAKER_01 7:33

I don't know. They're going to in two years. Right. This is a temporary process. Why is it temporary? I don't know, Aaron, you're embarrassing me. Come on. You're a software guy. Easy math.

SPEAKER_00 7:44

Their systems aren't ready to do anything else. That's it. They're just they this is like we gotta do something, and this is the easiest way to do it.

SPEAKER_01 7:52

They've got Okay, you know what? I should have gotten that right because Aaron, why did they do such a simplified process into the US for qualified parties? Yeah, it's technical limitations. So how did they solve this technically into the US? It's a simplified process. What's the process? The qualified party process.

SPEAKER_00 8:17

You mean how does that qualified process work? Yeah, they had to go outside the ACE environment because it wasn't ready yet. Correct. And it's all done in a in a parallel path with spreadsheets. Email. An email. And an attachment. Yep. Now this is going to be in their software, but it's going to count based on the line on a declaration multiplied by three.

SPEAKER_01 8:35

A little bit better than the US process in that case.

SPEAKER_00 8:38

So um that I mean really is a technical limitation why they did it this way. And the plan is to be regular duty calculations in two years. And in the interim, they set up this EU um commission because right now you got like 27 different systems for clearance and everything. They're unifying that across the whole EU. That's where this EU data hub comes in. So they're working on the technology to be able to kind of unify this EU clearance. So, anyways, great stuff. Um, De Minimus goes away. This is the trend around the world. Three euro per line comes in, depends on the clearance type. Um, now there's some other nuances to this. What are the questions you have? Let's just hit the questions kind of in the order you got them.

SPEAKER_01 9:21

If if I skip IOS, can I skip the the three euros here?

SPEAKER_00 9:26

Now three euro applies for for all B2C shipments under 150.

SPEAKER_01 9:30

Okay.

SPEAKER_00 9:31

Uh trade agreements. Ooh, good.

SPEAKER_01 9:33

Yes.

SPEAKER_00 9:34

You can like preferential treatment. I can get preferential treatment. Absolutely, you can. Okay. How does that work? Um you want all the gotchas around that. So I know that yep. So there's technically a path to do this. Now, is it realistic for a lot of shippers? Probably not. Here's why. The only way to get preferential treatment is to move it from that simplified H7 declaration to a more formal H1 declaration. That's where you have to have all the extra data control.

SPEAKER_01 9:59

Okay, so all I have to do then is just that's it's just that simple. I just do an H1 instead. But you also can't use IOS anymore. Okay, so not only I can't hold on. So IOS, which was didn't they come that out? It's like this is an upgrade. So we lose the upgrade.

SPEAKER_00 10:16

Yeah, and I don't understand.

SPEAKER_01 10:18

I don't fully understand why. So you can't use IOS if you want free trade agreements. You want preferential treatment on your meaning that the tax has to be then collected with the duties in the clearance process if you want that treatment. Okay. Yep. But that's it. You just have to that that's the only nuance.

SPEAKER_00 10:32

But when you do that, once you move it from IOS, then you bring in another problem. What iOS has this great benefit of being able to use one country to clear into for the entire European Union. When you go outside of IOS, they also said, well, when IOS isn't being used, you must clear in the destination country. Wait, wait, wait.

SPEAKER_01 10:54

So under IOS, you can do one. I'm just pitching physically, right? You have you're clearing into the Netherlands, let's say. Which is very common. Which is very common. People are doing that in the Netherlands. They bring everything. Now, if you're in free trade agreements, they have to clear it individually into each individual country. Yep.

SPEAKER_00 11:13

Okay, so and that's because the rule if it's not an IOS shipment. Yeah. Do you see how the kind of the decision tree kind of works you into? Forces you away from if you want preferential treatment, you gotta go away from IOS, which then forces you to use a logistics provider that can clear the destination country. And a ton of e-commerce logistics providers like to do things like bulk clearance in the Netherlands to for the entire European Union.

SPEAKER_01 11:38

Aaron, consolidators. Do you think they're going to be getting free trade agreements applied to their goods going into these countries?

SPEAKER_00 11:45

Um that's going to be very difficult for them because most of them like to push IOS for this reason. What about the integrators? UPS, FedEx, DHL. It'll be easier for them. Yep. And here's the other thing. I've seen solutions with consolidators where they allow for clearance to the destination country, but it comes at a cost. Using express carriers comes at a cost. So now you've got the cost of transportation. Like maybe there's a good solution you have. It's a you know it's a complicated world, but make sure if you're gonna go away from IOS just to get preferential treatment, now you've got to bring in the transportation costs and see if it all still makes sense.

SPEAKER_01 12:20

What about the postal stuff? Is that gonna get the free trade agreements?

SPEAKER_00 12:23

Um it's the same, it's the same thing that and honestly, but postal is clearing in the destination country, right?

SPEAKER_01 12:30

Like like a true postal shipment would so a true postal shipment, as long as it's H1 clearance and it is clearing into that country, actually could get this treatment. Yeah. So in order for this to clear differently, is this the broker then that's making the decision on the clearance process?

SPEAKER_00 12:46

That's a good question. I'm not the expert on clearance and how that all works and how how they know to use the H1 to get the preferential treatment. Those are some details we're working on to try to get sorted out. Interesting. But think of the math though. If you have a mixed shipment, okay, let's say you have a mixed shipment of things you want preferential treatment on and others that you don't.

SPEAKER_01 13:07

So like a hoodie, a shirt, and um a shirt that's made in China, a shirt that's made in Malaysia, and a hoodie. Uh-huh.

SPEAKER_00 13:18

So you got to take into account now, okay, what's the value of the stuff I want preferential treatment on? How much do I save on duties there? I now have to clear in the destination country. So is there extra cost or not with my transportation to do that? Now I'm going to an H1 clearance. I have to give the country of origin and the full HS code. Now my line item consolidation benefits go away, and I might get charged more, you know, additional three euro fees that I wasn't, that I wouldn't if I still but the three euro fee goes away if it's if it's only on the stuff that's preferential treatment.

SPEAKER_01 13:48

All right. So if the whole batch had preferential treatment, you might save nine euro. If one item has preferential treatment, you're saving three euro out of the nine. But if you that's the math of like, is that worth it? Oh, but if you did it the other way, it'd be three euros because you can consolidate them under the same six digits. So some complicated math. All right, we're uh I'm sure we'll be getting very good at doing this uh um on the fly because that's kind of that's kind of our our thing. But that's crazy.

SPEAKER_00 14:14

And really, I was just looking at this from the perspective like, okay, as a business, like I came from uh, you know, uh an e-commerce retailer, shipping operations, those kind of things. So I'm looking at this through the lens of how do I navigate this and make decisions? And I think the majority of people are gonna go, you know what, let's just keep it simple for now. Preferential tariffs are you I think there's gonna be use cases for it for sure. Um, but it is not a simple, straightforward answer. Once they threw in that little caveat that, oh, you can't use iOS for uh uh for uh preferential tariffs. That that kind of threw a monkey wrench in all this that I didn't see coming. So Okay, but the good news is on e-commerce on returns. I was just gonna ask about returns. What do you think is gonna happen?

SPEAKER_01 15:02

There's good news for returns? No, there's not. I was gonna say, what are you talking about? It's non-refundable, non-refundable. Okay, yeah.

SPEAKER_00 15:10

Um dang. Yeah, this is all good news, right? All good news here. Um so on H1 returns. Non-refundable. There's some language in there that like maybe there's some exception, but really for the most part, in all practice, there's there's no there's no refunds on this. I mean, that's kind of a status quo what what we have here in the US was you know the some of the IP and 122 teras.

SPEAKER_01 15:38

Okay, how are merchants gonna calculate this? I guess they're gonna have to just decide. Do you think generally either let a software like dynamically try to make decisions and then you have to change the clearance process? I mean, that'd be super tricky. You're probably picking one path or the other. Either I'm gonna be doing all H7s or H1s.

SPEAKER_00 15:55

And here's the other thing that I like we need to be working closely with our partners to understand. Just because you can consolidate something, you have to make sure your provider is consolidating it the most efficient way possible when they create the declaration, create the entry.

SPEAKER_01 16:14

Which means you need to produce really good documentation so they do it right. Yeah, which that we we help with that software to do that to automatically make sure it's okay. That now, but contrast for me. So the the express carriers, power of attorney, like there's this power of attorney stuff, the declarant, we need to talk about the declarant versus postal operators. There's how are these two being handled differently, or not necessarily handled differently, but why practically are they different?

SPEAKER_00 16:41

So this is where it gets interesting too, specifically around IOS shipments. There's also that they're pushing the liability for the declarant or the person that should be um that's gonna be responsible for the duty, the debtor. They're pushing that on to the IOS merchant, or they could have it, they could sign up an indirect representative to be able to act in their behalf. Um this is like it's it's one thing in concept, because they they technically just want this duty collected upstream, but they didn't put very good rails in place to actually make this happen, practically speaking, to make sure the duty can be paid. Uh, it would make a lot more sense if they just made the duty somehow combined with IOS on remittance, and then these IOS uh um uh merchants can just remit duty along with their taxes, but instead the IOS still gets remitted, the duty gets collected at import, and the rails to actually get that duty where it needs to go are it it's now kind of up in the air and getting figured out right now. Um, what's happening is if the IOS is holder is technically supposed to be the declarant, but a representative can step in their place. What we're seeing is some express carriers reaching out to shippers to sign a power of attorney so that way the the shipper can just be the declarant and then you know DHL, FedEx, GPS, whoever will bill their customer like a normal DDP transaction where they're there's gonna be all the duty and taxes back to the shipper. So um, but they're having to get a POA from each of their customers uh to try to try to make this all work. Um and there's a lot of concern from marketplaces and others around like their liability for this duty, that's it, there's a lot of fragmented disconnected relationships here to make sense of it all. Um but it gets even more complicated. So DHL, for example, owns a relationship with the shipper and they're delivering and they're doing the clearance, and it all it all makes sense, right? That'll probably be the declarant. They own the relationship with that shipper. But if you're La Post, Deutsche Post, any other European postal operator, how much of a relationship do you have with a shipper in Canada over what is coming to you? You have you have and you have no contractual relationship or anything with that shipper. So they did one smart thing here. They they carved something out specific for postal operators that allows them to, in fact, I can just read it here. Let's see here. Um postal operators acting acting under the UPU. So this is just a normal postal shipment that's tied in with the UPU, can ask the Pope postal operators at origin to designate an indirect representative in the EU to be the declarant.

SPEAKER_01 19:27

Okay, so let's say Australia going to Europe, Australia Post can select a declarant. Or they could be the declarant. You have to be an EU entity. Okay, if they had an EU entity. So they have they can pick someone with an EU entity, um, similar to the qualified party process to be the declarant. Yep. What uh okay, what does the declarant entail? What do they why why is there a declarant? I don't understand.

SPEAKER_00 19:57

Uh they need a throat to choke uh when it comes to duty. Who's responsible for duty and the data on that that's coming in? What is responsible? So they're the payer of the duties all the time?

SPEAKER_01 20:06

They're the payer? Uh no, they're just still unresponsible. What does that mean? Okay, whoa.

SPEAKER_00 20:11

So they don't necessarily pay the duties, but they're responsible for the duties. I mean, tech you could have business arrangements to have someone else pay it. It's kind of like a an importer of record might have the ultimate liability for the case. Got it for two. So it's kind of like an butt.

SPEAKER_01 20:23

This per this is the this is the backstop, the only backstop.

SPEAKER_00 20:28

Yeah, they they do have a cascade of like the first line. And then there can be like a second, if they don't pay it, they default or something. So what could they because that's cas- oh maybe it's just too much, but it cascades.

SPEAKER_01 20:38

It's like it gets more complicated. They're the they're going after everybody here that they can't.

SPEAKER_00 20:42

If you get the right party to be the declarant, they're the responsible party to make sure things get paid. Now the payment to customs might be facilitated through the carrier or through the postal operator in the EU, but ultimately that that person is or the broker. Yep. Yeah. But the the declarant? The declarant. Yeah. So Okay. Yeah. So that's where, like a, you know, an Australia Post, for example, could sign up with a EU entity as the declarant to be their representative for all shipments coming from Australia into the EU. And that would then satisfy the complications that like DHL trying to get a POA from every shipper. Instead, Australia Post doesn't have to go out and do that. They they can sign up and have someone represent all of their shipments.

SPEAKER_01 21:30

How practical is it for the post in this case to have collection upon delivery? Let's say you're a foreign postal operator, right? Into the US, you've been forced to collect duties. It's it's it's like is this like an optional thing? I mean, like uh is the is the destination post gonna do collect upon delivery or they don't want that at all. Did they like explicitly say they don't want that?

SPEAKER_00 21:54

Oh, yeah, yeah. They they don't want that. The whole intent of this is the duty is a is for the business. It's not a tax on consumers.

SPEAKER_01 22:01

Oh, oh, so it's paid by the uh the exporting. I've heard this before. In the US, I think uh Trump loved to say that. This isn't a tax on consumer.

SPEAKER_00 22:10

And they want they don't want that surprise delivery, you know, electronic delivery. Yeah. But operationally speaking, that's why they and that's why they want to push the liability of the declarant on the IAS holder or their indirect representative and and so on. They they don't want it to be the consumer. However, it could be somebody else. And there has been talk about like, well, from a business arrangement standpoint, they can still go collect from them, even though someone else is a declarant. And there might, there's posts exploring that too. Um, we'll see, but in practice, that is not the way of the future. That is a recipe. This is this is that's a recipe for problems.

SPEAKER_01 22:49

So the US, the qualifying party process pretty much made this impossible. Yep. In Europe, it's not necessarily mandated, it's just difficult practically to pull this off.

SPEAKER_00 23:01

It is out. I I think so. And there there has this is where it's interesting. The sentiment within the EU, uh, postal operators and even carriers trying to figure out how to how to approach all of this. There's been question marks because this implementation guidance hasn't come out. So there's been a lot of exploration of people willing to say, hey, can we still collect on delivery? Maybe that's our plan. Now that this is rolled out, we'll see if the any of those sentiments change. But practically speaking, um, having a B D DP on these B2C shipments is is really the right path to go. Is there is there any chance this gets delayed?

SPEAKER_01 23:36

I'm very interested to see what they can do in four weeks.

SPEAKER_00 23:41

Ooh, I don't even know where to put my money on that one. Now that this has come out and more comments and things are going to come in and they can update this guidance, I'm curious to see if they if they run into major snags.

SPEAKER_01 23:53

There's probably, you know, let's say 200 countries out there probably half of them no longer ship, these post offices no longer ship to the US. Right? Half of them. Most of the volume, there's a lot of the volume coming in, but a lot of these smaller countries. This is now all these countries shipping to Europe, especially like that are out in that region, um Asia, etc. Like that's that's uh that's gonna be super impactful for them. Um now Aaron, what are what are uh just to kind of like as we finish up here? How do how are we helping with this? Because we so we moved the vast majority of postal volume into the United States, um, which means that we're for the most part, I think, pretty equipped to help now go into these other countries. Let's say we're collecting duties inside of a prepay app, um, you know, our our mobile app inside of who did we just go live with someone like the other day? What country?

SPEAKER_00 24:53

Oh, geez. We go live with was it uh I don't remember which one you're talking about. There's the number of Columbia? Uh that that's one that's been recent, yeah.

SPEAKER_01 25:00

Yeah. Um Togo? Anyways, but um so we can collect the duties there, and it's gonna be probably fairly easy for them now to comply with this. The collection aspect of the collection aspect, yeah. I think and then us working either as the declarant, which we, you know, we have some documentation on this, either acting as the declarant, but facilitating that collection of the duties and getting them to the you know, uh to the final authority or to the final payer of those duties.

SPEAKER_00 25:27

Yeah, that that's the beauty of this is um because we went through the the storm of last year in the US and the that level 10 disruption that we had there, there is a lot of things put in place that we can leverage to help foreign posts outside the EU. Now add the EU to their uh their list of countries where they they collect duty on alongside the US, and we can leverage that same framework to help post continue shipping to the EU. Uh, then we are we're also working very closely with IPC, UPU, and the EU Post to put the the framework in place there to make sure the everything's in place to be able to pay them properly on all of these shipments. And the here's the crazy part about this uh where did we just set up a new office? Netherlands. In the EU. And that actually positions us to be able to act as a declarant on these shipments and alleviate some of those those uh friction points as well. So we're actually set up very well to be able to turn on a solution of the EU in the in the limited time given. I mean, heck, we did we did it to the US with much less preparation than we have now going to the EU. So I'm pretty confident we can have, I'm very confident and bullish that we can have some very workable solutions in place.

SPEAKER_01 26:45

Come to workable and fast. One thing our team can do is move quickly. We have we already have most of these applications in place. It just about getting in touch with us and our team, and we'll we'll help the the post. I mean, look, and merchants, right? So if you're a foreign post or you're an express carrier, you're a consolidator, and your merchants are needing help. This is just a start. Like calculating this is you know, somewhat simple, kind of been simple for a qualified party process as well. That's not gonna remain simple, right? It's about to get more complex, and then same thing with the EU, and that's where we've already got all of this built out and are, I think, ready to help. Uh, I mean, we work with retailers, marketplaces, large marketplaces, postal operators, customs, right? So we're kind of we have uh an ecosystem that's uh pretty unique.

SPEAKER_00 27:36

Absolutely. And it and it's worth talking, like one thing we didn't touch on much was the rails for collection of the within the commercial carrier space. I think that's pretty well figured out. Uh we talked about it a little bit. If you're you know Atlanta cost guarantee customer of ours, you'll see your calculations change and duties start getting calculated, and we'll still be able to guarantee it. And and the rails are already in place for that. Where there's some some newer hiccups and issues on the postal side that we've got to put some solutions together to help with that. Um, but overall, you know, to your point, our teams, our team moves fast and we'll have solutions ready to roll. Uh, I think there's more details that'll be coming out. Obviously, the guidance just came today, so we'll have more information as we as we start putting these puzzle pieces together and have a clearer vision. We'll probably have some different webinars for postal operators. We'll have a lot of things coming out to help um keep everybody, get everybody ready to rock and roll.

SPEAKER_01 28:32

Okay, one last thing. This is July 1st. What happens November 1st?

SPEAKER_00 28:37

Oh my gosh. We totally forgot one very important thing. You're right, you remembered. And thank you for remembering product identifiers. This was another topic as they try to capture more information on the on the goods coming in. They have and and the way luckily they're phasing this in so it's not all hitting on July 1st. That's not close, man. Four months before peak. Four months. Now, this we'll call this a practice period from July 1st to November 1st. You can start transmitting this data. Here's the best part about it it's data that already exists. So it's not like creating data. It's it exists. In the ether, okay. In the ether. And that's what that's what the EU wants. They just want people to give them that data. What is this data? What's the what's the product identifiers here? What is this? Part numbers, manufacturer numbers, UPC codes, etc. So they they bucket them into three different categories. You've got um, let's just say the from a manufacturer they assign a part number. Is that part number standardized, like a UPC code or EAN number, or is it just their own made-up number that's not actually publicly registered? Yeah, right. So that's one where it's driven by the manufacturer. And then you as a seller, if you're reselling my product that I give you, it could my product comes with my part number, and you might overlabel it with your number, or maybe it's just my own number for your own inventory purposes. Yep. That's that's a merchant-driven part number. Now you might use the same number, or you might have your own in addition to it. Those are the numbers we're talking about. They want both those numbers. They want both of those. Now, they have three fields: one for your number, yeah, one for the manufacturer's number, my number, and one for my number that is standardized. So if I have a UPC code on mine, I could just put the same number. The same number could go in both fields. The the standardized one is not required. It's only it's optional. Okay, explain why.

SPEAKER_01 30:34

Why is this standardized even there? What's the point?

SPEAKER_00 30:37

Um because they want to know if it's registered in a public registry somewhere versus just made up by me as a manufacturer. There's a different that's a differentiator.

SPEAKER_01 30:47

So you could have a SKU that has the color in it or whatever, but that might not be the registered. Yeah, you could have you could have something different here.

SPEAKER_00 30:54

I can go to the UPC database and find information about a particular product. And so that's where and if you as a reseller just use my number for everything, it could be the same number across all the fields. But they just want visibility into that.

SPEAKER_01 31:09

Okay, how a consumer in Japan, right, sit shipping something, how are they gonna get this? These numbers.

SPEAKER_00 31:17

Oh, yeah. There's uh that's a whole other topic of collecting those numbers and passing them. And there's carve outs on when it's not required, like handmade goods and those kind of things. But a lot of that going on. Um, but a lot of how does it get collected? How does it get transmitted? That's the industry trying to sort that out. The good news is it exists in ether, and we have some research.

SPEAKER_01 31:35

We're very good at doing this kind of stuff and getting these this information, but man, this is wild. It's gonna be fun.

SPEAKER_00 31:41

So if we got to lay out the next six months, no, five months, wait, less than five months. Yeah. Um, we've got duty to minimis going away. We just talked about all of that in the EU. We've got an enhanced postal clearance process coming into the U.S. Going to a normal clearance process, most likely. Yep. That's coming later this summer. That'll be disruptive. And then you've got the part number, you know, product identifier stuff coming in November. And that's gonna impact everybody. And the and the stuff in the US is also there's a lot of data requirements around that too. So we're actively uh we've got some creative solutions to be able to capture these extra data elements, which we don't have time for today. But the problem is country, you know, if you had to sum it up in two things, compliance for these low value shipments is ratcheting up. That's data. They want more information and they want their money. That's where the de minimis is going away. And so that's those are two things we're very well equipped to solve, and we're in the middle of uh of working with the industry on. So we'll continue to keep everyone updated as as things come out. Okay. All right, now I think we can actually finish. Let's wrap it up.

SPEAKER_01 32:47

Hey, thanks, Aaron. Thanks.