CBP's New Mail Entry Rule—Key Dates Importers Should Know | Decoding Cross-Border Ecommerce | Ep #81

The other shoe just dropped. CBP released two interim final rules and a general notice today — and the way postal shipments enter the U.S. is about to change in 30 days, with a much bigger change landing this fall.

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, are joined by Jonathan Sullivan, Zonos' Chief Data Scientist.

They walk through what each of the three CBP releases actually says — the procedural confirmation that de minimis is officially gone, the suspension of the current Qualified Party process, the new "upgraded spreadsheet" interim window for the next 90 to 120 days, and the new Entry Type 13 voluntary test coming this fall. They also unpack the calculation shift (standard duty calculations with stacking tariffs, a ~8.6% average tariff increase per CBP's own analysis, and the return of preferential trade agreements like USMCA for postal), the exceptions that don't fit the interim process (alcohol, tobacco, anti-dumping/countervailing, and quota goods), and what postal operators should be telling their customers right now.

The conversation then dives into the bigger fall change: Partner Government Agency (PGA) data requirements hitting ~50% of postal shipments, the broker becoming the importer of record on Type 13, the 232/301 attestation savings hiding in shipper data, and the pre-collection (catalog sync via Dashboard Lite) and post-collection (email/WhatsApp follow-up) solutions Zonos has already built to handle this without turning every shipment into a friction point.

🎧 If you operate a postal lane into the U.S.—or ship through one—this is the episode to watch before the 30-day clock runs out.

Chapters

[00:00:00] Welcome Jonathan + the three things CBP just dropped

[00:01:23] IFR #1: De minimis suspension, officially rubber-stamped

[00:02:10] IFR #2: Qualified Party out, Type 13 in — and the interim window

[00:04:34] Dad joke: why banks have drive-throughs

[00:05:15] What changes in 30 days: brokers required, standard calculations, ~8.6% bump

[00:06:30] FTAs return to postal — USMCA finally back in play

[00:07:11] The MPF advantage postal keeps

[00:08:53] Exceptions: alcohol, tobacco, anti-dumping/countervailing, quota

[00:11:42] What changes this fall: Partner Government Agency data

[00:13:55] Why ~50% of postal shipments are subject to a PGA

[00:19:25] Broker becomes the IOR on Type 13 — a structural shift

[00:19:50] Solving for PGA data: pre-collection vs. post-collection

[00:22:09] Catalog sync via Dashboard Lite (Shopify, eBay, Etsy)

[00:28:10] Individuals: counter UX and the prepay mobile app

[00:30:25] 232/301 attestations — the savings hiding in your data

[00:33:23] Type 13 is voluntary — but Type 1 means a $33 MPF

[00:36:04] Don't wait — start collecting now

Transcript

SPEAKER_01 0:06

Welcome to another episode of uh decoding cross-border e-commerce podcast. And I'm here with Aaron as the ush and with uh Jonathan Sullivan, our chief data scientist, who also oversaw um our acquisition of Evolve um Customs Brokerage. And so to talk about the new entry, well, the upcoming new entry process, which is uh going to evolve into a evolve, oh wow, a type 13 entry. But there's a little interim process here. So we had some guidance, an IFR, right? Which uh acronym means interim final rule. Interim. Interim.

SPEAKER_02 0:45

Interim final rule. Which I've never understood how you can have an interim final rule. It feels like an oxymoron to me, but I'm no I'm okay.

SPEAKER_01 0:53

So we got two of those, right, from customs today. And a what was the third thing they dropped?

SPEAKER_00 0:58

Here's a general notice as well.

SPEAKER_01 1:00

All right, so let's let's talk about this because this is massively impactful, even in the short term, in 30 days for foreign postal operators, right? It's gonna impact all these posts around the world coming in for their shipments into the U.S. And then it's gonna be even more impactful when the actual type 13 process comes in. So what happened today and what's going on? Would you want to take it?

SPEAKER_00 1:23

Yeah, sure. I'd be happy to. Um, so today there's uh it was three things announced the two IFRs um and one general notice. Uh the first one, which we'll touch on, is largely I'd say procedural. Um, it it continues the suspension of de minimis officially through an interim final ruling um for all non-postal um streams into the U.S.

SPEAKER_02 1:48

Which which really this is executive order came out, got rid of the de minimis last year. The big beautiful bill is putting into law starting next year.

SPEAKER_01 1:55

Correct. This this is really just like rubber stamping it again, just like oh hang on the really it's really, really gone. De minimis is gone. Okay, they're just like restating themselves. Okay. Yeah.

SPEAKER_00 2:04

So so I think that one we can just say that's understood. Business as usual. Nothing's changing.

SPEAKER_01 2:10

Yep, yep.

SPEAKER_00 2:10

Okay. Um, the second one um is the uh suspension of the qualified party process in its current form and the replacement with a new entry type 13 that's been announced, um, and and uh a deferred compliance window for the next 90 to 120 days that largely keeps most everything the same. There's a few new requirements that are introduced. Um, one, it does require uh full 10-digit HS codes. Um this uh puts um the qualified party process for postal entries into actual customs business very clearly, which means you need a broker when you're talking about customs business. Absolutely need a broker.

SPEAKER_02 2:56

Yeah, so I mean qualified parties up to this point didn't have to be brokers, which we weren't for a long time. Now we're moving from a basic spreadsheet to a fancier spreadsheet for a few months that will require a broker. Yeah. And um, but there's there's some advantages and disadvantages of this new process, but it's gonna be much more calculated and granular in the way it's uh um approaching everything. And it's really a uh a phased approach to get prepared for the type 13 entry that's coming in this fall.

SPEAKER_00 3:29

Yeah, and and that type 13 entry is gonna be a big change, right? It's gonna require um all the same PGA message set. So all the PGA? The partner government agencies. These are things like the Food and Drug Administration, the USDA, the EPA. They all have different requirements that you have to comply by, uh, different um information you have to disclose, um, and they have the ability to um to to pause entries um to prevent that entry from proceeding.

SPEAKER_01 3:59

But but what's but what's gonna happen over the next like until the new type 13 process comes in? We have a spreadsheet, what's happening with PGAs in this interim period?

SPEAKER_00 4:06

Yep, yep. So that'll happen in um like likely October, September, October, around that time frame. In this interim time period, business as usual there. No no pain. There's no pain immediately.

SPEAKER_01 4:18

Well no pain related to the extra. To the partner government authorities, but there are a few goods, right, that are going to be painful, and maybe we'll get to that. Um, I mean, it's some outliers, right? Correct.

SPEAKER_02 4:31

Well, let's talk about the current state, okay, future state. Let's talk about money. You know, let's let's all take this to the bank. In fact, do you know why banks have drive-throughs? I do you know why they have drive-throughs? I I don't know, Aaron. So the cars can meet their real owners. Come on. That was come on.

SPEAKER_01 4:54

So the cars can meet their real owners. Yeah, the bank.

SPEAKER_00 4:57

The bank owns the cars.

SPEAKER_01 4:58

Oh.

SPEAKER_02 5:01

All right.

SPEAKER_01 5:01

Let's talk money. That was good. That was let's talk money. All right. Um so today. Usually when you surprise me through jokes, I laugh. But if it takes me too long to get it, then I'm embarrassed. So I'm on the embarrassed side. Uh all right.

SPEAKER_02 5:16

So the spreadsheet today, very basic. Very basic. This started last summer. It started with, hey, in postal, the only calculation is IPA tariffs. Then those turned into the 122 tariffs. Yep. And that's it. There's none of your standard duty calculations. There's no 301 tariffs, 232, all the stacking stuff that's complicated for the commercial lane. Postal hasn't had that. It's been very easy to calculate. That's changing in 30 days. The new spreadsheet is going to move to a standard calculation, stacking tariffs, all of the, all of the goodness that comes from that, which actually is gonna uh CPP actually did a whole analysis on this. It's like uh it's gonna result in about uh on average an 8. I think 6.7% increase in 8.62% uh increase in uh the average tariff based on their analysis.

SPEAKER_01 6:10

Do you think they took into account for uh free trade agreements?

SPEAKER_02 6:13

Which have not been allowed inside of I don't know that they did. I know.

SPEAKER_01 6:17

Well, because we have not been able to offer free trade agreements inside the qualified party process.

SPEAKER_02 6:21

They may have. They did say their methodology was looking at type 11 entries on the commercial side, so maybe, maybe I'll give them credit and say yes.

SPEAKER_01 6:30

However, for certain posts, this actually might be a net decrease.

SPEAKER_02 6:34

It could this is gonna be.

SPEAKER_01 6:36

Let's say Canada, right? That's a that's a good example of the so much volume coming in from Canada to the US, and they've not been able to get any treatment for USMCA Kuzma. Exactly, exactly.

SPEAKER_02 6:45

Well, and that's where the the uh the postal up to this point has had some advantages and disadvantages in the calculation. Yeah, free trade agreements is one of those disadvantages. Right now we're moving it into parity in the calculation, and so uh is it's no longer hey, is postal better or worse? It's like, no, it's gonna be the same calculation. Yes, it's just and you're gonna have some of the same advantages like free trade agreements.

SPEAKER_00 7:11

Okay, well, there is actually an advantage that postal has and retains. Um so postal today doesn't have a what they call merchandise processing fee. Uh that merchandise processing fee for informal entries, so these are things less than $2,500, is typically $2.69. Um, that um is confirmed to not be applicable both with this uh upgraded spreadsheet, but also with the entry type 13. That continues to be the case even there. So there is uh uh an advantage for postal in that sense, but it is relatively small small.

SPEAKER_01 7:45

Yeah, well, okay, when you look at it in terms of maybe a duty percentage, right? Average order value probably in postal is item value is probably less than 100. So that's sure. So as a percentage impact, it's going to be pretty high by comparing postal to a different entry process, a commercial pro commercial entry.

SPEAKER_02 8:03

Yep, yep. That'll that'll definitely be a win uh for the postal community.

SPEAKER_01 8:07

Um but in the but the uh the commercial entries, they're are they're still able to consolidate and get that um that merchandise processing fee down per parcel if they do a consolidation, which happens with some usually not with the express carriers, but with some consolidators.

SPEAKER_00 8:23

Yep. So typically what happens is they'll they'll group a whole bunch of consignments as long as it's under that uh $2,500 threshold into one entry, and that $2.69 can be spread across all the all the consignments in that entry.

SPEAKER_01 8:39

All right, so it's the broker now needs to do a calculation. Do brokers this is pop quiz, do brokers do calculations for duties typically? Typically it's done in ACE. ACE. They're actually not so this is this is not as easy as it sounds. Spreadsheet is easy, but properly calculating duties is not. How is CBP gonna audit and deal with this? Just do their best, I guess, to try to you know determine how I we'll see, I guess. Remains to be seen. But there there's gonna have to be some type of audit process, I'm sure, because um we calculate duties for a living. We've been doing this for, you know, geez, 17 years almost. Uh a lot of brokers have not. And so as you look at, you know, your foreign postal operator, these are what are okay. If you're a foreign postal operator, what are some questions you're asking now, your broker um that that uh might become doing this in T US? You mean your qualified party? Yeah, you're qualified. Okay, yeah. What questions should you be asking your current qualified party?

SPEAKER_02 9:46

I I think it's I think it's worth talking to any postal operators working with us. It's status quo for the next few months. Uh because we're a broker. We're a broker, we've got the technology. We know how to do all of this.

SPEAKER_01 10:01

And we have tools for your if you have been utilizing our um dashboard for your customers, they're gonna have a much more complex calculation. It's gonna be a lot more valuable for merchants to figure out what is my actual total landed cost of my my goods.

SPEAKER_02 10:16

Yep. And that's that's actually a key point here when we're talking about calculations. Uh, I know some postal operators have just been like, all right, well, 122 tariffs, 10%. I'm just gonna I'm just gonna calculate it my myself. And then we're processing it, it's working great. No, no big deal. But the calculations are much more complex. It's you know, a sp a different duty rate by HTS code plus the stacking rules. It's extremely complex.

SPEAKER_00 10:42

And and those stackings can get very complicated. If something is an automotive part but made out of steel or aluminum, and uh, you know, there's certain rules about how those stack and certain thresholds for if the steel content's below a certain amount, then it's an exemption. And are you collecting that information from the from the actual shipper? And so there's a lot of these things that that make it even much more than just one rate per HCS code.

SPEAKER_02 11:06

And and that that's part of the beauty of us being a technology provider first, is we've got the tools to help with all of that.

SPEAKER_01 11:14

So I look, I and I'm super biased, we have the best, most comprehensive land and cost calculator. Oh duties and taxes, bar none, it's not even close. And this is hard for us, right? Like we spend a lot of time getting this right, and so uh it's gonna be rough, I think, until this can start getting processed in ACE to get this correct. No, absolutely, absolutely.

SPEAKER_02 11:35

And and so um if we look at this transition, you might look to yourself like, oh, good. Uh I need to deal with the calculation and I'm I'm good to go. I'm gonna go focus on something else now. But the reality is what's coming in a few months with the PGAs, that's where you need to also start planning now.

SPEAKER_01 11:56

So probably for these foreign postal operators, two messages. One, you better let your merk your customers know this is changing, right? This is one of the first things. Start getting your well, we can help get your message together, right? What's changing, how it's gonna impact them, because they're gonna be surprised when the duty bill is different than what they've been getting, right? So you need to communicate that. But second is the upcoming changes. Let's should we dive a little bit deeper into those changes?

SPEAKER_02 12:23

And I I think if you're not working with a qualified party that's also a broker, you need to be rethinking. And and CVP actually talks specifically about that in this of like they understand it might be a little disruptive that you need to be, you know, looking at your qualified party, making sure they're ready for this and actually have a broker involved. Um, but yeah, let's let's start talking about now. You let's say you get that locked down. This is a very short window of time that this this interim spreadsheet process is going to be applicable. Um three to four months from now. So we're talking about.

SPEAKER_01 12:57

So probably before peak. Uh-huh. Oh no, actually, they'll probably do it like on right before Thanksgiving, right? Like right before peak. Because why wouldn't they? It's like let's just throw it out right before Black Friday. Yeah, like the day before.

SPEAKER_00 13:13

Yes, we do. So we do know there's there's actually a little bit of ambiguity here about how long this uh upgraded spreadsheet process can last, but um, it's either 120 days or 90 days. Uh-huh. Uh within 90 days, that's when we expect the entry type 13 test to um to be available. And within 120 days, we expect that to end. But there's also language that says that within 120 days that spreadsheet process ends, or potentially when the entry type 13 process begins. And so uh it's either end of September, end of October, both of those are and that's where we're we're trying to get a little clarification.

SPEAKER_02 13:51

But the reality is I would I would start planning for end of September. Okay. September 22nd-ish, right, is 90 days from when this is going to be announced tomorrow officially.

SPEAKER_01 14:01

This is like a pre-notice, but it'll actually be a the initial kind of no message to your customers is look, we've got you covered, still gonna be a billion for duties and taxes. The duties are changing, not a lot is changing for you. However, in 90 to 100 days, a lot of things are changing for you.

SPEAKER_02 14:17

What are those things that are that they I do want to carve out one one thing that's I I think we missed on this interim spreadsheet process. If you have anybody selling alcohol or tobacco, yes, yeah, that's not gonna that's not gonna be going on this this response.

SPEAKER_01 14:30

Okay, so there's gonna be the uh the exceptions at the bottom of that you know notice that says, hey, there's a few things you need to worry about. Alcohol tobacco needs to go through a formal entry. Formal entry, which means type one. Correct. All right. What else besides alcohol tobacco is impacted?

SPEAKER_02 14:46

There's some anti-dumping, countervailing quota is the last one.

SPEAKER_01 14:50

Okay, give me examples of what that could fall under that.

SPEAKER_00 14:53

Yeah, so there's um limits to how many of a specific commodity type that can be imported in at a specific duty rate. Um and those are soft quotas, but there's also hard hard quotas as well. If there's any of those HTS codes on your on your filing that can't be processed through this, how many do you think of what would do you have any idea of how many of our shipments are would be impacted on it with those?

SPEAKER_01 15:16

No. Okay, interesting. All right, we'll get that answered. But I think overall it's gonna be very small. I mean, super small is a small percentage. Very small. So that okay, a few exceptions in this interim process, otherwise, otherwise more money, depending on country and if FTAs are apply or not. Yep. New process. What did should they be telling their customers, these postal operators, that they need to get ready for? PGAs is a big one because a large percentage and the posts need to get ready for this at the retail counters. What does that mean with these partner government authorities? What do they need to get?

SPEAKER_00 15:46

Just to put it in perspective, how many how many shipments or what percentage of shipments would you say are subject to a PGA? Or potentially subject. Or I guess if we include CPSD, potentially subject.

SPEAKER_01 15:57

I get a cheat because I kind of remember if it's around 50%, I believe you said that. That's correct, it's close to 50%. That's crazy.

SPEAKER_00 16:03

So about half of all shipments, uh parcels that you process today. In postal. In postal, we would expect to need additional data elements to be able to satisfy those partner government agency needs.

SPEAKER_01 16:14

So these additional data elements need to come in with the shipment, or we need to have gathered it indirectly on the post office's behalf with that customer, which we have solutions to do. So you need a what are some examples of this additional data elements you're gonna need.

SPEAKER_00 16:28

Yeah, so the Food and Drug Administration, they require anything that that is uh FDA eligible um to have a product code in addition to the HTS code. So this will specify exactly to their taxonomy. It's generally five or uh five or seven digits. What um what is that is that product code anchored in anything? Or is it like Yep, so they have a uh um a wizard that you can use to build this yourself on their site. It's so you kind of classify it to this product code. You have to do that for everyone. Um, it's not super friendly. Their site is, I'd say, um, it was it's not the most easily accessible. And there's a lot of information being left on the table. So uh we know what the HTS code of the product is. That eliminates a large portion of all FDA product codes. And so we're able to help you identify with really quickly what that what that code is. And many times it's it's known exactly. In some cases, it's narrowed down to a few. And we can uh we've built a lot of technology to help infer and make that process a lot easier where a user can attest and confirm that that's correct, and or they can say no, and we'll have very friendly questions to help them.

SPEAKER_01 17:35

When and who can get this product code at what point in the journey, right? Someone's showing up, they're they're about to ship a shipment, and let's say they're in Japan and they're using our mobile app, right? And they're taking photos. Or let's say someone's in you know Europe going to a post office and they're just going to the retail counter and the post office isn't using our app. What are um when when do they when and what needs to be gathered? Or it's a business, right?

SPEAKER_00 17:59

Yep. So we'll have a few solutions available for all of our customers. Um, the the first we'll we'll talk about is um and they're all actually.

SPEAKER_01 18:07

What if there isn't a solution? Just like what practically needs to happen and that needs to be gathered, and then let's talk about how to solve that problem.

SPEAKER_00 18:14

Sure, sure. So you'll need to gather, and it really depends on the commodity that you're shipping, uh, but you have to uh gather certain pieces of information. It could be the genus and species of the wood that you're uh uh makes up the product that you're shipping. It could be the FDA product code, it could be certain attestations of compliance um for the different partner government agencies. But there's a a number of these fields that you need to be collected, and it varies tremendously by the product type.

SPEAKER_02 18:42

And isn't there also um disclaim codes for like, hey, if it's personal use for certain situations that you could say, hey, this is this is just a personal use uh exemption from getting all of the other data? There's those kind of situations too, right?

SPEAKER_00 18:56

Yeah, that's correct. So it depends on the PGA and the partner government agency itself, but there are certain cases where if you meet certain criteria, and one of those might be end use or transaction type, then maybe that's disclaimable. Uh, but you'll have to know that and you have to attest to that. So this is like the uh a giant decision tree.

SPEAKER_01 19:16

Okay. So this decision tree is happening, and and let's say that just you're any, let's say we're not involved, right? So your former postal operator, you're working with your broker. This foreign postal operator needs to gather this type of information, give it to the broker, make the broker comfortable. We missed something super important about these brokers. Who's the importer of record on this? The broker. The broker. So no matter what, and it's mandated, correct?

SPEAKER_00 19:37

Yeah, that's very different from all other entry types.

SPEAKER_01 19:40

So now this broker's on the hook, right, for what's coming in. And so they're gonna be like pushing back on these foreign postal operators to gather this information themselves. Okay, now, Jonathan, to what you I think you were going is like we've had to think a lot about how we're gonna solve these problems. What are the solutions that either are in place today for a lot of foreign postal operators or they can start integrating with us um uh in order to, you know, and heck, look, if you're not working with us, you can go build something like this to go do it yourself if you want, right? But it just let's let's throw out some ideas of like how can you solve for this problem?

SPEAKER_00 20:15

Yeah, I think there's two ways to solve this problem. Um there's one which is uh I'd say prior to label creation, collect all the data elements you need for that shipment to to transit and be able to be cleared by it by a broker.

SPEAKER_01 20:27

So label gets created prior to that, sorry, prior to that, in an interface at the counter, sure, you're you're you're creating friction to get this information in some way or another in a UI. Yep. Got it.

SPEAKER_00 20:42

Okay, yep. Or the second way is to after the shipment's been created, maybe that's something that's happening via API or some other flow that's asynchronous, before it can clear, you have to get that information as well. Um, at that point, you risk if there's um uh uh delays in actually answering those questions, gathering that information, you risk the potential of holds at the border and delayed in uh processing times. Um so uh of those two, you know, the it could be the better customer experience might be that pre-collection of information. Could be. It'd be much more.

SPEAKER_01 21:16

Okay, so let's talk about how to how to pre-collect then. How that's because that just sounded super painful. How do you reduce the friction in the pre-collection?

SPEAKER_02 21:23

I'd like let's just put a pin in real quick. The post-collection would be we'd have tools to be able to send out messages, send out an email to somebody, email, WhatsApp, data collection, etc. Yep. Tell them, hey, we need some data, they go and attest to it. We we bring that in, marry that to the shipment, we're able to create the entry. Yep. Great. But if we already have that ahead of time, we don't have that step.

SPEAKER_00 21:42

Yeah, so if that's pre collected. So for example, if you had a catalog on file with your postal operator, or maybe it's in your e commerce platform that has the relevant information already attested to, then you can just look that up in the catalog when the shipment's created, and there's actually no additional questions, there's no uncertainty left.

SPEAKER_01 22:00

Okay, now then this goes to one of the like the solutions that we have built in order to manage this. Originally, when this rolled out, we gave a tool in our dashboard, we call it dashboard light, essentially, kind of a light version of our dashboard, to get your duty calculation to which was so at Etsy sent out an email to all their sellers and said, Hey, go use OnoSys calculator. Um, a lot of postal operators, um, like let's say in Australia, right? So all the retailers in Australia already have access to this dashboard. So one of the things they're gonna be able to do is I'm just gonna connect my my channels, right? Channels. Let's say a channel's Etsy, a channel is eBay, and now we're we're pre-gathering this information. And here's where this might become a superpower for some of these post postal operators is they can now have an experience that's super seamless pre-shipment, right? In order to attest for this information, including free trade agreements, right? Like that should be able to be on the table. So, what would that experience look like? Let's let's go for a business first, and then we'll get to an individual. Like, how can a business is now inside of our dashboard, right? Or you, hey, you can use our APIs to go create this kind of experience too. So we have the APIs. So as we talk about this interface, be thinking about how you could use this if you want it outside the interface as well. Because we're just going to provide this to your to your customers to go in and get this info.

SPEAKER_00 23:18

Yep. So the process is quite simple. Um, a verified account can log into their um dashboard, their their light account. They'll go ahead and they'll link their um e-commerce platform. It could be a Shopify store, eBay, Etsy, um, any of the supported uh e-commerce channels, they'll add uh authorize us uh to be able to pull order and catalog information. That'll get synced to us automatically. And then when there's a shipment created at the postal counter by that same tracking number, as long as that's in that e-commerce platform, which you generally do to be able to send out shipping notifications and the like, we'll be able to look up and say, okay, here's the exact catalog items that are in there. And all you have to do is you test one time, we store that information, and every single time you ship that item, that's already on file. You don't have to redeclare that same.

SPEAKER_02 24:06

But if I'm if I'm okay, so I sync my catalog as a as a merchant, we bring that in. How do I know how to test?

SPEAKER_00 24:12

Yeah, yeah, that's a great question. So we'll have we'll have uh uh and this can be triggered on shipment, or it could you could do it all at once in the catalog. Um, but you will ask you a series of questions, like a uh a question tree depending on the commodity.

SPEAKER_01 24:25

And we have an API that does this called we have an API.

SPEAKER_00 24:28

It we branded it as Zonos Clarify, which will just ask clarifying questions of what exactly this product is, uh any add it'll walk you through in a real user-friendly. The goal is that even my grandmother could be able to handle this, right?

SPEAKER_02 24:43

Um so it'll be she's pretty smart from what I hear.

SPEAKER_00 24:46

My my grandmother is. Um I believe it. But it will be it will be um very uh user-friendly to be able to walk through here's what we need. And in fact, what we do even before we ask all those questions is we actually infer what we think the answer to those questions might be, and we'll we'll give you a box at the top. Hey, it looks like you're shipping lipstick, it isn't it, it doesn't contain any pesticides and it meets this criteria. Click yes or no, and if they click yes, that they full stop, they're done. If they click no, then they can go ahead and answer those questions manually by themselves.

SPEAKER_02 25:18

So would the the tool then be really scrubbing my catalog and then just flagging the ones that I need I need to add more information so I could prepare everything ahead of time, and then as those goods are shipped, you're seeing the orders and linking that to the uh to tying all of that data to the entry, that's correct, supplementing with the the existing postal data that's like the IT mat and and other data elements, uh, that then create the full entry and all the data requirements needed.

SPEAKER_00 25:47

That's correct. And that way you can ensure you have full compliance of data and that um that that shipment is unlikely to be held by a PGA at the border.

SPEAKER_02 25:55

And then if as a business, if I uh was a little lazy and didn't stay on top of it, or I added a whole bunch of new stuff and didn't get uh do all the uh attestations, I would then be prompted to do that if I started shipping any of those goods. Correct. And then I but I would do it once for that that SKU and then it would be done.

SPEAKER_00 26:13

So the first time you ship a brand new product that maybe you haven't gone through this process for, we would be able to send you an email, a text, or WhatsApp, etc. Uh, with a link. You would click on that link, you'd be prompted with those same types of questions that would and that we would save that off on that catalog item. And now any future time you ship that item, we can just look up those attestations and handle it that way. There's no need to re-attest every single time you ship. So it'll be a really transparent experience, a really um you know user-friendly experience for for those that want to do everything ahead of time or those that would prefer to do it on the fly, uh, but we will minimize the the effort required at that point.

SPEAKER_01 26:52

All right. So there's some solutions. It is more complicated for these businesses, there's no doubt. And we're gonna be doing a lot more trainings and things on this stuff in the coming days. These businesses are gonna have and do have some of these same problems in the commercial stream, correct? They do, and it's actually quite unfortunate. A lot of these goods get held at the border. Um, while commercial is rough for these types of goods. There's that's there's a reason it's all going through postal right now. And so if it's it's a great way to keep your volume and know though that even though your your shippers are going to experience pain, it's a lot more painful for these PGAs, usually in the commercial stream.

SPEAKER_00 27:31

Yeah, the but the worst customer experience for both your shippers and their customers is to have that delay at the border while a broker.

SPEAKER_01 27:38

I see this as an opportunity. Honestly, like these postal operators, I see as an opportunity to like build out a better experience, right, than some other some of your um some of the other solutions that are out there to actually go and uh expand your volume. Like, don't look at this as like like necessarily like you can either take a crisis and turn it into an opportunity, or you can just sit on your hands and yeah, you'll get clobbered. And you will, like this, this stuff will clobber you if you don't if you don't get ahead of it. Individuals, right? The counter. How this is much different.

SPEAKER_02 28:15

Like I I I think probably the easiest way to illustrate this, and to to your point earlier, this is the experience we'll we're gonna walk through in our mobile app is the same kind of experience you could build into your your counter software with our APIs, right? Yep. Um But wouldn't you say that the prepay app, we have a mobile app that's deployed in a number of countries where someone creates their declaration, they can take a photo, create a declaration. What they need to be asked for today is pretty straightforward. But in the future state, if I'm your grandma or myself, this is probably not as smart as his grandma. When I when I go to create my my declaration on my shipment, is it true that I'll just start based on the what I'm trying to ship, I'll just get asked some questions? That's exactly very interactive, right?

SPEAKER_00 29:01

Super interactive and super uh easy to handle. And again, we'll we'll we'll front run everything with an inference. So we'll say, here's based off of the commodity description you provided, the image, uh, the HS code, um, here's what we think is the right answer to these questions. Please confirm that. And they can attest all in once with one click if if that's correct. Or if they say no, then they'll just go ahead and they'll they'll answer the relevant questions uh with with with what is what is correct. And so it's a very it balances that user experience uh with also the the full attestation that's needed for for compliance.

SPEAKER_02 29:38

So very similar to the businesses, but a business is pre-doing a lot of work with their catalog, whereas the the user might be you know shipping their you know one-time shipment and they just get get asked some questions for that shipment and the products are shipping and away they go. Correct.

SPEAKER_01 29:53

Okay. Wow. I and if you don't have this, you're gonna have to figure out a way to gather this kind of information from an individual. Well, in some way, one way or another.

SPEAKER_02 30:02

And this isn't this is such a complex dynamic set of information that you need that varies by commodity and government agency, that it it's not gonna be supported by the standard data that is is in postal. Yeah, and so this is a supplemental data stream that we're having to build out to complement um you know what what's existing today in uh in postal data.

SPEAKER_00 30:25

Yeah, none none of this is on an IT Matt. And I know we've talked about partner government agencies and the the need for that, but there's also a need for handle 232 and 301s as well. So these are the additional duties beyond uh the standard uh duty rates, uh called most favorable nation rates. Um there are many things that might be considered an automotive part or they might not be an automotive part based off of their HTS code. If you can if you can attest, hey, this is a non-auto part, then you get a different duty rate. Huge cost savings, or like the country of smelt and poor or test. Precisely the aluminum or steel content will influence the actual amount that's paid. And so if you if you don't collect that, your shippers will have to pay essentially the worst case scenario, right? They'll have to pay as though it was, you know, 100% steel or 100% aluminum, and um it was as though it was melted and and poured in in Russia, which has punitive uh duties on that. And so if you can collect this information ahead of time, you can offer that that uh differentiated experience on on cost as well. You brought up the IT, Matt.

SPEAKER_01 31:33

How how like how is this data or is this data, some of the like these elements, how is it going to come through? The is the UPU, IPC, are they doing some things to get enhanced data elements through the the data stream?

SPEAKER_02 31:48

They're working on some enhanced data elements for the EU, right? Product identifiers, but that's like three fields that's basically part numbers. So this is this is a whole nother bottle.

SPEAKER_01 31:59

So correct me if I'm wrong. I see in my mind, right, like these postal operators, they have their data stream with their um through the IT map, right? That's happening through the normal postal data stream. And they're probably gonna have a supplemental data stream that's connected directly to their broker. Correct. It really, I mean, realistically, like a dual integration. Whether, and actually honestly, the post, like if we're getting that data, the post office doesn't have to do the dual integration. We're like sidetracking with the post. Well, it's like, hey, we'll gather this data and enhance what's coming through in the IT mat. But otherwise, you got to gather both sets of data and give your broker that set of data for um for the broker to be able to actually get this entry done correctly.

SPEAKER_00 32:41

Yeah, and and just a quick trivia. Um if you um if you look at the the totality of goods that are affected by these 232, 301, and MFN um uh sorry um and PGA requirements. PGA requirements? Yep. That's that's close to 90%. Actually, a little over 90, wasn't it? Yeah, it's like 94%. If you look at the the force labor, that's with the 301 tariffs that are coming. Yep, yep.

SPEAKER_01 33:09

Okay, so oh geez. So the 301 tariffs that are coming, the 232s and the PGAs, the volume that we see, 91%, oh wow, will be impacted by something. By something in one of those categories.

SPEAKER_02 33:23

Yeah, so that could be your your uh that that that'll impact the calculations, that's why the the data needed, all of that. It's the new world is is very different than the old world.

SPEAKER_00 33:34

And and and I call this out specifically because there is a a decision point that you have to make, right? Um so after this 90 to 100 three to four months, right? Um you can decide to to participate in the entry type 13 test. And it is a test that they're calling, it's voluntary. You don't have to do it, but if you don't, then all of those things will be subject to formal entry, type one, which has a much higher MFN if you don't want to. What is the MFN fee in type one? The merchandise processing fee, it's three dollars and some change for the low end per entry.

SPEAKER_01 34:15

So alcohol tobacco tobacco comes through right now, somebody's getting a $33 fee just in clearance fees on the tobacco. That would be the fee.

SPEAKER_00 34:25

That'll start in 30 days, right?

SPEAKER_01 34:28

Yeah, yeah. Okay. There is their ability to do consolidation and maybe get tricky on or you know, at least you know, try to help out a little bit here if someone if there's a lot of volume coming through like that for a certain postal operator.

SPEAKER_00 34:42

Yeah, so consolidation informal is possible. You have to have the um you can have different ultimate consignees, so that you have to have it going to different people in the end in the US, but it has to have the same what they call nominal scale.

SPEAKER_01 34:55

Seems like a lot of work for just a few goods.

SPEAKER_00 34:57

Yeah, yeah. It it it will be, and especially if you look at the volume that's maybe coming on a given uh airplane or truck, right? Um, because that's kind of where you're saying it's gonna be tough to consolidate. You're not really gonna have those economies of scale.

SPEAKER_01 35:10

You need so some postal operators might just want to say no to a few goods.

SPEAKER_02 35:16

Alcohol and tobacco. Yeah, yep. That yep, that could that could be a reasonable approach for sure. So yeah, I I think in the end, uh this is this has been awesome. Um we just we've been digesting these just this morning. Uh there's there's a lot to unpack here, but I think we have a good handle on on kind of and we kind of saw a lot of this this coming and the way this is rolling out. Um but it's gonna be the disruption's not gonna be right out of the gate. Um, I I think the calculations are what's gonna land first. That's only gonna be a month from now. Calculations are gonna change. Broker will be required to be in the mix uh for for processing these new spreadsheets. But come this fall, that's that's what you really need to be gearing up for and and preparing for because that's where the the true disruption comes.

SPEAKER_00 36:04

And I think there's a danger to wait, right? So um don't be caught flat footed. These changes take time to collect these data elements. Um, and so that work should start immediately. Yeah.

SPEAKER_01 36:16

All right. Well, our team's gonna be ready to help for those that uh are working with us. We're also happy to answer any questions for postal operators, but uh uh all right, riveting. Um, I'm sure we'll have another episode soon on geez, everything EU, everything else going on. Uh we're we're we're definitely busy. So thanks for coming on today and uh looking forward to next time. All right, thanks, Clint.

SPEAKER_00 36:37

Thank you.