CROSS-BORDER & GLOBAL 2025

6 WAYS TO OPTIMIZE CROSS-BORDER & GLOBAL SHIPPING PAGE 7

CROSS-BORDER & GLOBAL 2025 PARCELindustry.com

SPECIAL ISSUE

WHEN AIR FREIGHT RIVALS OCEAN FREIGHT: What Cost Parity Means for Global Commerce. Page 14

DE MINIMIS IS DEAD: WHAT SHOULD INTERNATIONAL RETAILERS DO NOW? PAGE 12

FROM BORDERS TO BUBBLE WRAP: HOW GEOPOLITICS ARE IMPACTING ONLINE BUYS. PAGE 20

WHAT PARCEL SHIPPERS NEED TO KNOW ABOUT THE TRUMP TARIFF LAWSUITS. PAGE 16

O T E E R E IB H R K C C I CL SUBS

CONTENTS ///

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Volume 32 | Issue 6

08 12 20 24 28 06 EDITOR’S NOTE Thriving Amidst Uncertainty

By Amanda Armendariz

08 A MICRO FOCUS AMIDST MACRO NOISE Extreme macro and regulatory uncertainty means shippers will likely stay focused on things they can control — specifically, key idiosyncratic developments within the parcel space that could be significant opportunities/risks depending on how well they can be leveraged.

By Ravi Shanker

10 MITIGATING THE IMPACT OF TARIFFS BY INVESTING IN SUPPLY CHAIN VISIBILITY A “head in the clouds” approach won’t cut it for supply chain professionals — building proactive visibility into your supply chains will.

By Thomas Strain

12 DE MINIMIS IS DEAD: NOW WHAT FOR INTERNATIONAL RETAILERS?

By Alison Layfield

14 WHEN AIR FREIGHT RIVALS OCEAN FREIGHT: WHAT COST PARITY MEANS FOR GLOBAL COMMERCE

By Rathna Sharad

16 WHAT PARCEL SHIPPERS NEED TO KNOW ABOUT THE TRUMP TARIFF LAWSUITS

By Andrew M. Danas

18 PARCEL COUNSEL INTERNATIONAL: WHISTLEBLOWERS AND THE FALSE CLAIMS ACT

By Brent W. Primus, JD

20 FROM BORDERS TO BUBBLE WRAP: THE GEOPOLITICS OF YOUR ONLINE BUYS

By Srividya Jandhyala

22 THE PACKAGING REVOLUTION: TRILLIONS IN TRANSITION TOWARD SUSTAINABILITY AND SMART TECH

By Yogesh Kulkarni

24 ECONOMIC CONDITIONS IMPACTING US SMALL BUSINESSES

By Ben Johnston

4 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

26 THE HIDDEN COSTS OF SUPPLIER EXPANSION Why diversification without discipline creates new risks.

By Peter Follows and Jamie Dunbar

28 REMAKING THE LAST MILE: HOW OPEN LOCKER NETWORKS CAN RESHAPE DELIVERY IN AMERICA

By Gary Winter

30 TO SUM UP

SPONSORED CONTENT 07 TAKE YOUR INTERNATIONAL SHIPMENTS TO THE NEXT LEVEL 6 Companies Who Can Help You Optimize Your Operation

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PRESIDENT CHAD GRIEPENTROG

[ amanda.c@rbpub.com ]

PARCEL (ISSN 1081-4035) is published 7 times a year by MadMen3. All material in this magazine is copyrighted 2025 © by MadMen3. All rights reserved. Nothing may be reproduced in whole or in part without written permission from the publisher. Any correspondence sent to PARCEL, MadMen3 or its staff becomes the property of MadMen3. The articles in this magazine represent the views of the authors and not those of MadMen3 or PARCEL. MadMen3 and/or PARCEL expressly disclaim any liability for the products or services sold or otherwise endorsed by advertisers or authors included in this magazine.

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CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 5

EDITOR’S PICK

Here are some of the most-read articles on our site in recent weeks. If you haven’t already checked them out, you might want to — there is some great information in there!

EDITOR’SNOTE

7 Key Takeaways from the FedEx GRI: Sticker Shock in Disguise

THRIVING AMIDST UNCERTAINTY

By Amanda Armendariz

I

nternational shipping has always been somewhat of a challenge, with different codes, regulations, and requirements sometimes baffling even the most experienced of shippers. But in 2025, cross-border and global shipping has become

6 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

even more complex, thanks to the increase in tariffs, the elimination of de minimis, and a general feeling of uncertainty. Many organizations are now scrambling to figure out if they need to source their production closer to the end consumer, how to absorb the costs of the tariffs without alienating their customers by raising prices too much, and more — not exactly an easy feat!

Hopefully, this special issue of PARCEL will help any shipper who is involved, in any way, with cross-border and global delivery to feel a bit better about the current state of things. Increasing your supply chain visibility, evaluating the pros and cons of expanding your supplier base, and staying up to date on the legal issues surrounding international shipments is one of the best ways to thrive amidst this uncertainty. At PARCEL, that’s what we are here to help you do.

As always, thanks for staying connected with us.

By TransImpact

Beyond the 5.9%: What Is New in the 2026 FedEx General Rate Increase (GRI)?

By Paul Yaussy and Matt Sumowski

How Flexible Warehousing Is Meeting the Surge in Parcel Volumes

By Kelly Zurawski

SPONSORED CONTENT

TAKE YOUR INTERNATIONAL SHIPMENTS TO THE NEXT LEVEL 6 Companies Who Can Help You Optimize Your Operation

Global parcel shipping is complex, with carrier networks, surcharges, and performance differing country by country.

Alexandretta Transportation Consulting helps shippers cut through that complexity, providing clarity and delivering measurable savings through international carrier negotiations. Our team understands the competitive landscape in Europe, Asia-Pacific, Canada, and the US — from carrier strengths in each market to how service levels and contract terms vary internationally. With this knowledge, we help clients secure stronger contracts and achieve significant cost reductions, giving shippers confidence in their strategy and results in an otherwise challenging global environment. www.alexandrettaconsulting.com | 714.606.9298

Enhance your global customer experience with Asendia USA’s international e-commerce shipping and returns solutions to Canada, Mexico, and worldwide. With nearly 40 years of experience and relationships in the international shipping industry, our solutions simplify cross-border logistics with affordable rates, automated customs paperwork, and reliable tracking, so you can sell worldwide with ease. With Asendia USA, you can grow and expand your global e-commerce business, improve customer experience and loyalty, reduce the complexity of cross-border shipping, and lower the cost of your international shipping and returns. Asendia USA currently delivers parcels worldwide for several top internet retailers. www.asendiausa.com | ecommerce.usa@asendia.com | 800.624.5287

Delta Cargo’s DeliverDirect is redefining small package delivery in the US market by offering a faster, more reliable, and cost-efficient solution. Backed by Delta’s extensive flight network and powered by SmartKargo’s advanced technology, DeliverDirect ensures seamless end-to-end visibility, transparent pricing, and adherence to service-level agreements (SLAs). Unlike traditional ground networks, DeliverDirect leverages air transport to minimize delays, reduce costs associated with surcharges, and guarantee timely deliveries — even during peak demand. With DeliverDirect, businesses can scale their e-commerce operations confidently, knowing that every package will reach customers with speed, accuracy, and consistency, setting a new standard in small parcel logistics. www.deliverdirect.com | sales@deliverdirect.com | 800.621.6258

ePost Global leverages 25+ years of expertise to simplify shipping with personalized end-to-end solutions. Now serving both international and domestic markets, we reach 200+ countries with the largest last-mile carrier network — delivering better rates, service, and reach for your e-commerce. epostglobalshipping.com | inquires@epostglobalshipping.com | 866.784.8444

At GLS, we believe every package carries potential — whether it’s personal or professional. That’s why our network doesn’t stop at borders. We’ve built seamless cross-border connections into Canada and reach more than 50 countries worldwide as part of GLS Group and powered by trusted partners including the strength of Royal Mail.

With GLS, your shipments move quickly, transparently, and reliably, so people, businesses, and possibilities stay connected — no matter where the journey begins or ends. www.gls-us.com | sales@gls-us.com | 888.SHIP.GLS

ShipNetwork powers peak season success with fast, precise, and scalable fulfillment built for e-commerce brands. Our nationwide network reaches 98% of the US in 1-2 days via ground shipping, reducing both transit times and transportation costs. With 99.99% order accuracy, operations run smoothly even in the busiest shopping months. Our exclusive shipping method optimizes every package across multiple carriers, ensuring the lowest rates with dependable delivery. From Black Friday through year-end, leading brands rely on ShipNetwork to keep performance high and costs under control.

Shipnetwork.com | getstarted@shipnetwork.com | 866.722.9687

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 7

A MICRO FOCUS AMIDST MACRO NOISE

Extreme macro and regulatory uncertainty means shippers will likely stay focused on things they can control — specifically, key idiosyncratic developments within the parcel space that could be significant opportunities/risks depending on how well they can be leveraged.

T

he more things change, the more they stay the same. A lot has changed in the last 12 months, and yet we find ourselves in a reasonably familiar place for the parcel industry. A year ago, it felt like the destocking downturn was ending, impending rate cuts would turbocharge the economy, and once we get past the uncertainty of an election year, it would be relatively smooth sailing ahead. However, uncertainty brought on by tariffs, the global geopolitical environment, and broad policy making

By Ravi Shanker choppiness have upended supply chain planning. Yes, similarities to last year include continuing to wait for the restocking to truly arrive, continuing to look for imminent rate cuts, and instead of an election, it is tariff uncertainty that we need to get past for better visibility ahead. Few could have predicted the last nine months to play out as they have and fewer still can confidently predict what might happen in the next nine months.

From a macro perspective, there is little clarity out there. In our most recent survey of 98 shippers

8 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

conducted Aug 27-Sep 3, ~26% of respondents said that they do not expect a recession (down from 41% last May) but almost half the respondents said that they “do not know” if there will be a recession or not (up significantly from 30% in May), highlighting continued uncertainty. In line with most still feeling as though they do not have clarity, a slim majority of respondents noted they have not changed their inventory actions (52%), while some have pulled forward orders (26%) and others have paused or cancelled

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orders (22%) — again negating fears of a significant pull forward of activity.

The plurality of respondents indicated that their inventory levels are “just right” (37%) while an even amount (27%) have noted they are either too high or “hard to say/depends on macro in the coming months.” Re the changes to de minimis rules, amongst the shippers who used the de minimis rule for imports, there was an even split between shippers who indicated that their response to the rule going away will be to pay the higher duties and those who expected to take other actions. The next most selected choice was to reroute goods and import them a different way (31%), and 13% selected that they would eliminate the sourcing action. All in all, it appears most shippers are still operating in an environment of uncertainty, yet most have yet to change their inventory actions to account for the changing policies (and those puling forward orders may be offsetting those who have paused/cancelled orders).

Amidst this backdrop of broad macro uncertainty, parcel shippers have their work cut out in also dealing with micro/ idiosyncratic industry considerations that could present significant opportunities/risk (depending on your position in the e-commerce supply chain). The three main parcel-specific trends that we are keeping our eye on in the next 12 months include:

to be on the same course as they have been for the last few years, including significant restructuring and cost-cutting. What will it mean for shippers that the largest independent parcel carriers are focusing on cost-cutting rather than growth? Will that send shippers into the arms of emerging third-party logistics providers like Amazon Logistics or smaller, regional carriers? Will the incumbent parcels need to raise prices to offset their downsizing?

1. Uncertainty about the incumbent parcel carriers. UPS, FedEx, and the USPS are the three main independent third-party parcel carriers and each is going through their own cost-focused transformation. UPS announced a significant drawdown from its largest customer in January and has embarked on a multi-year, multi-billion dollar downsizing program as a result, FedEx is coming to the end of one of their own multi-year, multi-billion dollar cost-cutting programs (DRIVE) and is about to embark on another (Network 2.0), the USPS has a new Postmaster General, though for now they appear

2. The rise of 3P marketplaces. While enterprise customers might need to respond to industry changes by exercising more control over their e-commerce supply chains with more insourcing and shorter/faster moves (consistent with the “regionalization” of e-commerce supply chains that we have seen over the past couple of years), SMB shippers might feel like the world is their oyster with all the parcel carriers courting their business as their “last” avenue of growth. However, it’s not just the parcel carriers who are pursuing SMB business — enterprise shippers are as well, via the expansion of third-party (3P) market-

All in all, it appears most shippers are still operating in an environment of uncertainty, yet most have yet to change their inventory actions to account for the changing policies (and those puling forward orders may be offsetting those who have paused/ cancelled orders).

places, where SMB shippers can leverage the superior reach and logistics costs of larger shippers to expand their target market, while lowering costs. The benefit to the enterprise customer is more scale, resulting in lower cost per piece. In recent months, a number of retailers like Nordstrom, Lowe’s, Best Buy (and soon Ulta Beauty, among others) have joined leaders like Amazon, Walmart, and Target in launching 3P marketplaces for SMB customers. Further “platformization” and growth of 3P marketplaces could be a win-win for enterprise and SMB parcel shippers, potentially at the cost of incumbent parcel carriers.

3. Transformational technologies move out of the lab into the real world.

History might see 2025 as the year of breakout transformational technologies in the parcel space, particularly AI, autonomous driving, and humanoid robots. Generational leaps in agentic AI ability is transforming customer service and solving bottlenecks in supply chains; mobility leaders like Aurora, Waymo, Tesla, Gatik, and others are generating driverless vehicle revenues today with full commercial launch imminent; and embodied AI is manifesting itself in robotics, both specialized and in humanoid form.

Parcel giants like UPS, FedEx, Amazon, Walmart, and others are leading the charge with investment in robotics/ humanoid startup companies with eventual applications both within buildings (warehouses, sortation centers, stores) and in the field (home delivery). Drone deliveries continue to improve in capabilities (especially beyond visual line of sight), cost, and reliability as well. The net result of this broad-based technology deployment could make parcel delivery a highly efficient, low-cost 24x7 on-demand service for the end customer in the coming years.

Ravi Shanker is Managing Director, Morgan Stanley.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 9

By Thomas Strain

MITIGATING THE IMPACT OF TARIFFS BY INVESTING IN SUPPLY CHAIN VISIBILITY

A "head in the clouds" approach won’t cut it for supply chain professionals — building proactive visibility into your supply chains will

W

hile duties imposed earlier this year remain technically in force, recent court rulings have put these tariffs in limbo. A federal court declared many of the tariffs unlawful under emergency powers, though enforcement is paused pending appeals, leaving businesses to navigate a gray area between higher costs and the potential for large refunds. For supply chain professionals, the political implications of this move are somewhat immaterial — you need solutions to maintain smooth supply operations without incurring avoidable costs.

Excessive duties on some necessary imports may be unavoidable. However, that doesn’t mean supply chain professionals should remain complacent when it comes to the rest of supply chain operations.

For example: End-to-end visibility is

one of the most important characteristics of a healthy supply chain that helps you meet the needs of your customers, and it is instrumental in reducing the havoc that major disruptions can cause.

No matter the industry, certainty helps reduce risks associated with overreliance on specific suppliers, regions, or transportation modes, ensuring that businesses are not overly exposed to single points of failure.

How to build greater visibility into your supply chains? The deployment of advanced software and analytic solutions can help, but it’s more than just simply throwing a software product at a problem — it takes strategic implementation with the right partners and the right technologies. Here are some things to think about.

Identifying Blind Spots As supply chains have experienced more frequent disruptions, demand for

10 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

end-to-end visibility — from warehouse to customer — has become a growing priority. And because today’s customers have come to expect their suppliers to pinpoint where their assets are at each moment throughout the shipping process, using the proper data and software to provide customers with realtime information about their shipment increases customer satisfaction.

Whether it’s enhanced radio frequency identification (RFID), ultra-wideband or Bluetooth technologies, or artificial intelligence (AI) software solutions, their integration into companies’ Internet of Things (IoT) platforms are no longer optional. In addition to providing vital information to customers, these tools also allow professionals to identify potential bottlenecks before they occur and make adjustments before they affect the customer. In the coming years, it’s likely that visibility will become the rule rather than the exception.

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Indeed, the companies that are most successful at mitigating supply chain challenges are embracing the digital transformation of their supply chains.

Today, AI solutions can provide realtime analytics, encourage predictive modeling, and automate mundane tasks like inventory management and product tracking. Tomorrow, they will be able to do even more, and may have the power to completely transform supply chain management.

The Importance of Clean Data for Real Visibility Leveraging AI comes with a catch — it’s only as effective as the data from which it can glean insights. Indeed, maintaining clean, accurate databases is increasingly challenging given the increasing influx of data generated by interconnected systems and devices.

And the data isn't always reliable; even the most sophisticated AI tools can generate inaccurate insights instead of actionable improvements.

Here, it’s important for supply chain professionals to examine data accuracy when evaluating potential software solutions. For example, transitioning to software with a 99.9% data accuracy rate will provide companies with a demonstrable competitive advantage.

They won’t be spending precious time fixing mistakes that AI pulled through because the data was wrong. Additionally, they’ll be ahead of the curve thanks to accurate data that will speed up the work and enhance their employees’ ability to work quickly and efficiently.

Combining quality data with a robust AI component to filter noise and highlight actionable trends will reduce costs, enhance efficiency, and improve customer satisfaction.

Advanced Scenario Modeling in Times of Turmoil When it comes to influencing factors like tariffs, it can be helpful to model potential impacts in order to best prepare for them. It’s here that agentic AI can make a real difference.

Where generative and other traditional AI systems require human input to train

the program and create new content, agentic AI has a higher degree of autonomy and can generate actions and decisions without human intervention.

Using machine learning and natural language processing, agentic AI is always building on its previous experiences and incorporating new data with historical information.

In an era of increasingly powerful AI, professionals can dig deeper into larger mines of historical data to reveal new insights and empower more accurate predictive analyses.

Specifically, agentic AI's ability to learn from previous tasks is what separates it from traditional AI tools.

A forecast might identify a potential stockout in the future. Agentic AI, having learned from experience, can tell whether that demand indicates a trend that may necessitate a shift in production — or if it’s just an outlier that does not require significant action. This sort of information can be gleaned from market trends, competitor information, historical statistics, and more, enabling AI to notice things like rising costs and proactively develop a solution. From this information, it can deliver actionable insights that can improve supply chain functionality and eliminate friction.

In conjunction with other leading-edge technologies, agentic AI can help deliver even deeper insights. IoT can provide information on data points like machine health status, asset tracking, and production rates. Agentic AI can harness that information and provide actionable insight your teams can use.

Elsewhere, secure blockchain databases

allow for encrypted data exchange, and can help grant secure, real-time access to all transactions in a vendor database.

Here, it can help eliminate the need to manually update and reconcile individual accounting systems.

Preparing Yourself Before the Next Major Challenge Certain visibility into the entire supply chain will only become more important in the coming years. And while you may find that your current supply chain tools are serving you adequately, few things in this industry are more constant than change and unforeseen complications.

In an era of increasingly powerful AI, professionals can dig deeper into larger mines of historical data to reveal new insights and empower more accurate predictive analyses. Better forecasting means less risk of excess inventory and wasted production resources. You'll also discover a better understanding of your customers, putting you in a position to amplify the strengths of your unique value proposition, provide more precise services, and identify new business opportunities.

Your team will be better informed to make important decisions and explore newly discovered possibilities.

The bottom line is that supply chain managers must become more datadriven than ever before, and ready to deploy software and hardware solutions that support that goal. Those who adapt quickly and effectively will better meet today’s demands while setting themselves up for greater success tomorrow.

Thomas Strain is Vice President of Technology at Surgere. He leads the company’s technology organization as well as its hardware integration to bring data-driven supply chain software solutions and business intelligence platforms to the market. He has significant previous experience leading strategic development of business intelligence, retail e-commerce, and enterprise software solutions in the automotive market. Tom holds an M.S. in Information Technology from the Florida Institute of Technology and a B.S. in Computer Information Systems from Saint Leo University.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 11

DE MINIMIS IS DEAD:

NOW WHAT FOR INTERNATIONAL RETAILERS?

U

ntil recently, retailers shipping to the US could take advantage of an unusually high $800 de minimis threshold — meaning most cross-border packages entered duty-free. On August 29, the US government eliminated it.

Many international retailers built business models around keeping shipments under that $800 mark, knowing millions of parcels could slide through customs without added fees or paperwork. Although the change had been on the horizon, its arrival left little room for adjustment. Retailers like Canadian luxury fashion company Ssense even filed for bankruptcy.

Within days, international postal volumes to the US dropped by more than 80%, according to the Universal Postal Union. Postal operators across Europe and Asia turned off the US lane

By Alison Layfield

entirely, rather than risk being stuck with unpaid tariffs.

Airlines, including Lufthansa, refused to carry US-bound postal freight for the same reason. In Mexico, Correos de México suspended shipments altogether before partially resuming letters and documents that hold “no commercial value” and Canada Post told senders that every shipment to the US must now be prepaid with duties. Even DHL curtailed its standard business parcels into the US, keeping only Express intact.

As a result, sellers have scrambled to cancel orders, consumers are waiting on packages that may never arrive, and the busiest shipping season of the year has been thrown into disarray.

Consumers in the Crosshairs The burden has fallen directly on the buyer, and orders placed in August that

12 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

weren’t processed before the cutoff may never reach American doorsteps. Some sat in limbo at customs, others were returned to sender without warning, and for those that did make it through, new duty charges pushed prices higher. Many consumers encountered unexpected notices demanding payment before delivery. In some cases, the duty demanded exceeded the value of the item itself, which left buyers questioning whether to abandon the purchase altogether.

The ripple effects extended beyond discretionary shopping. Posts in some countries initially halted letter mail, reportedly blocking routine items like government forms, medical prescriptions, and ballots until rules were clarified. For Americans abroad, that meant paying courier rates for critical paperwork, or waiting weeks for governments and posts to adjust. The confusion damaged trust in the dependability of international mail,

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For e-commerce, the shock was equally damaging. Buyers accustomed to scrolling through global marketplaces for low-cost goods suddenly faced checkout totals padded with duties and fees. Small retailers overseas lost their price advantage, and shoppers quickly abandoned carts.

The uncertainty eroded confidence that cross-border shopping was worth the hassle, and consumers who had embraced direct-from-merchant imports are now questioning whether to stick with US-based sellers, fundamentally changing shopping behavior.

The Bottleneck at USPS No operator felt the strain more than USPS. Until now, the Postal Service rarely collected duties, only for shipments above $800. That represented a fraction of inbound volume. With the threshold gone, millions of packages suddenly required duty assessment, and USPS lacked the infrastructure to manage it. Its counters could process duty payments in person, but there was no digital system to handle the surge of parcels arriving each day. For consumers, that means packages could languish in warehouses waiting for a bill or get returned to sender if the process stalled.

Customs and Border Protection structured the new system around electronic filings, placing the burden of data and payment on carriers, intermediaries, or shippers themselves. That approach reduced the risk of bottlenecks inside CBP but left USPS struggling. Unlike UPS or FedEx, which maintain in-house customs brokerage, USPS currently has no equivalent infrastructure. Instead, it had to lean on a handful of CBP-approved “qualified parties” to handle duty payments for postal shipments.

As of September, only a small number were certified, and not all foreign posts had partnered with them. The result was inconsistent: some packages cleared, others stalled indefinitely.

Adding to the challenge was the new requirement that every commercial shipment carry detailed harmonized

system (HS) codes. Many merchants never stored this data in their systems, forcing them to scramble to assign codes in real time. Without the correct code, shipments could be flagged, delayed, or rejected outright. For USPS, the convergence of new duties and data requirements introduced significant friction. Packages that once moved seamlessly now triggered a cascade of manual interventions, slowing the entire network.

The strain also reshaped USPS’s role in the market. Previously, its low-cost postal partnerships gave US consumers affordable access to overseas sellers.

With duties now layered on and no clear system to handle them, USPS risks ceding ground to private couriers.

FedEx and UPS, despite charging much higher rates, can at least guarantee a functioning clearance process. That shift threatens USPS volumes at precisely the moment when its financial position remains precarious.

De minimis’ demise exposed a fragile supply chain that was running on borrowed time, and now the industry has no choice but to modernize.

Best Practices for Shippers There is no single workaround, but several practices can help sellers and logistics providers adjust against these updates. The first is tightening product data. Clear item descriptions, accurate country of origin, and HS codes down to six or 10 digits are now essential.

Merchants without HS codes must work with providers or lookup tools that can generate them reliably.

The second is adopting Delivered Duty Paid. Postal Delivered Duty Unpaid service is effectively dead for the US market. Merchants need to

build duties and taxes into checkout, collecting payment upfront. Some foreign posts are already using the Universal Postal Union’s new DDP tool to make this possible.

Merchants must also run cost models.

Switching from postal to courier options multiplies shipping costs, forcing sellers to decide whether to absorb the cost, raise prices, or stop selling into the US altogether. Another option is exploring US warehousing. Importing inventory in bulk at wholesale value, then selling domestically, avoids the retail-value duties that now apply to individual cross-border parcels. Many merchants are weighing this shift to distribution centers inside the US. Finally, sellers must stay in sync with carriers. Airlines and posts continue adjusting policies week by week.

Contingency planning is now essential to reroute or switch providers quickly if lanes close again.

The Stakes for Global Commerce De minimis’ demise exposed a fragile supply chain that was running on borrowed time, and now the industry has no choice but to modernize. Data accuracy, transparent pricing, and investment in compliant infrastructure are prerequisites for surviving in the market.

This is also a turning point for consumers. If they continue to demand overseas goods, retailers will have to re-engineer supply chains to meet them. If not, cross-border commerce will contract, and the US will see a shift back toward domestic fulfillment and stocking strategies. Either way, the habits of the last decade are over.

What comes next will be determined less by policymakers and more by the speed of adaptation among shippers and sellers. Those who treat this as a temporary disruption will fall behind.

Those who move quickly to redesign their cross-border strategies will define the next era of global commerce.

Alison Layfield is Vice President of Product Development at ePost Global.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 13

WHEN AIR FREIGHT RIVALS OCEAN FREIGHT:

WHAT COST PARITY MEANS FOR GLOBAL COMMERCE

F

By Rathna Sharad

or decades, air freight has carried a reputation: fast but expensive, efficient but prohibitive at scale. Ocean freight, by contrast, has long been the cost-saver’s choice. Slower, yes, but the only viable option when shipping bulk at a margin.

That traditional equation is shifting. New cost dynamics, paired with regulatory changes like the end of the US de minimis rule, and the shift to agile supply chain sourcing models are pushing brands to revisit their supply chain math and towards smaller, controlled drops of inventory. In 2025, in the wake of ocean freight volatility, just-in-time air freight is a competitive strategy.

Ocean Freight’s Softening Rates — and the Cost Curve Shift McKinsey & Company data shows that ocean freight rates began declining in Q3 2024, driven largely by expanded shipping capacity and easing disruptions in the Red Sea. By Q1 2025, a combination of Lunar New Year slowdowns and tariff-driven uncertainty further depressed prices. Starting February 1, the US announced new tariffs on imports from Canada, Mexico, and China, prompting many merchants to

14 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

either front-load shipments ahead of the effective dates or delay orders until the scope and enforcement of the measures were better understood. This uneven demand, layered on top of already soft seasonal volumes, put additional downward pressure on ocean freight rates.

The Drewry World Container Index (WCI) illustrates this trajectory clearly: rates fell from $3,905 per 40-ft container in early January to around $2,044/FEU by mid-September 2025 — a 48% drop in just nine months. At first glance, falling ocean rates would seem to widen the cost gap between sea and air. But in reality, the opposite is happening. The very volatility that is driving ocean prices down has also highlighted its fragility: long lead times, congestion risk, and tariffs that stack up across borders.

Air freight, once seen as prohibitively costly, has been closing the gap, particularly for small, high-margin shipments.

Air freight costs per kilogram have been relatively stable through 2025. This stability, combined with ocean freight’s volatility, narrowed the cost ratio between air and sea to levels not seen in years. Historically, air was 12–15× the cost of ocean freight, but in mid-2025 the gap compressed to just

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In some windows, shippers even converted ocean bookings to air, treating it as a viable hedge against inventory stockouts and tariff shocks.

The De Minimis Disruption: Why Regulation Changes the Equation On August 29, 2025, the US eliminated the long-standing de minimis exemption that allowed goods under $800 in value to bypass duties and taxes. For merchants, this marks a seismic change combined with the new widespread tariffs.

Where once a direct-to-consumer brand could rely on low-value shipments flowing by ocean or postal carriers with minimal cost impact, that pathway is closing.

Now, every shipment, regardless of value, faces customs scrutiny, duties, tariffs, and compliance requirements.

This is where air freight becomes strategically attractive.

When compliance is unavoidable, speed to market takes on new importance. Why wait six weeks on the water, paying duties all the same, when air can move inventory in days?

The de minimis change flips the calculus: efficiency is now as valuable as economy.

Just-in-Time Inventory in a Post-De Minimis World The rise of cost parity is not just about rates; it’s about flexibility. Brands increasingly operate in an environment where inventory tied up at sea equals capital at risk. Long lead times expose merchants to demand shifts, tariff surprises, and consumer expectations that won’t wait.

Air freight enables just-in-time inventory strategies that align with modern e-commerce:  Faster response to demand spikes. Seasonal launches, influencer-driven trends, and regional promotions can be replenished on demand.  Reduced holding costs. Less safety stock is required when shipments can arrive in days, not weeks.  Greater geographic agility through regionalization. Merchants can diversify sourcing and fulfillment across multiple regions. Whether shifting production from China to Southeast Asia or positioning inventory closer to end customers in Canada or Europe, merchants have more options without the long-term commitment and volume requirements of bulk ocean containers.

This agility is particularly vital as regulatory complexity grows.

Tariff engineering, product classification requirements, and regional compliance checks add layers of unpredictability.

Air freight mitigates some of that exposure by reducing the window of uncertainty.

What This Means for Global Merchants The convergence of air and ocean rates does not mean

brands should abandon containers altogether. Ocean will always have a role for bulk replenishment, low-margin SKUs, and long-term stock planning. But the shift signals a strategic rebalancing.

Merchants now have permission to view air freight not as a last resort, but as a primary lever in their global logistics strategy. For high-value categories like beauty, electronics, and apparel, where margin protection and consumer expectations are paramount, the case is especially strong.

In effect, the question is no longer “Can we afford air freight?” but “Can we afford not to?”

Parity between air and ocean freight may not be permanent. Capacity swings, geopolitical events, and new tariff regimes will continue to reshape the cost landscape. But the structural shift is clear: e-commerce merchants now have an expanded toolkit.

The end of de minimis and tariff uncertainty accelerates this change, ensuring that compliance costs are borne regardless of mode. When duties apply either way, time becomes the differentiator. Air freight’s value proposition (speed, flexibility, and just-in-time capability) has never been stronger.

For merchants navigating 2025’s new logistics reality, the winners will be those who rethink old assumptions, diversify their strategies, and treat air freight as more than an emergency fallback. Air freight is now a growth enabler.

Rathna Sharad, founder and CEO of FlavorCloud, has 30+ years of experience working in global supply chain and international trade logistics and has 20+ years enabling modern e-commerce experiences, the combination of which has positioned her perfectly to create an “anywhere-to-anywhere” logistics solution that enables any brand to go global. FlavorCloud, founded in 2018, is a cross-border shipping logistics platform that removes international shipping friction for midsized direct-to-consumer brands enabling them — for the first time — to keep pace with the accelerated demand of international e-commerce.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 15

WHAT PARCEL SHIPPERS NEED TO KNOW ABOUT

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THE TRUMP TARIFF LAWSUITS

arcel shippers have been challenged by the uncertainty of changing trade policies and tariff rates since President Trump returned to office in January 2025.

Adding to the uncertainty of parcel shippers seeking to navigate the new tariff landscape are lower court rulings finding some of the tariffs unlawful.

With an appeal currently pending before the United States Supreme Court, parcel shippers have questions about whether the tariffs will continue and whether collected tariffs will be refunded.

An examination of the issues in the current litigation underscores the fact that the current Trump Administration tariff policy is likely to continue even if the Supreme Court declares some of the Trump tariffs unlawful.

The core issue in the current litigation is the authority of the President to unilaterally impose tariffs and change

Andrew M. Danas

trade policy without the explicit approval of Congress. Article I of the United States Constitution vests in Congress, not the President, the authority to regulate commerce with foreign nations and to impose and collect duties. Thus, if a President negotiates trade deals or tariff rates, they need to be ratified by Congress.

In specific circumstances Congress has delegated authority to the President to impose or adjust duties. For example, under Section 232 of the Trade Expansion Act of 1962, Congress has given the President the authority to impose tariffs on products due to national security issues. Section 301 of the Trade Act of 1974 provides that the President can impose tariffs based on an investigation by the United States Trade Representative (USTR) of alleged unfair trade practices. Section 338 of the US Trade Act of 1930 permits the President to impose tariffs of up to 50% on goods imported from countries that

16 PARCELindustry.com  CROSS-BORDER & GLOBAL 2025

discriminate against US commerce.

Section 122 of the Trade Act of 1974 allows the President to impose a tariff of up to 15% on goods from countries where the President finds that there has been a “large and serious” US balance of payments deficit.

Many of President Trump’s new tariffs on particular types of products or commodities, such as automobiles, auto parts, copper, and steel and aluminum, have been imposed pursuant to explicit Congressional authority under Section 232 of the Trade Act of 1974. Other tariffs, especially on goods from China or for shipbuilding, are Section 301 tariffs.

Each of the above-referenced statutes, while clearly authorizing Presidential imposition of tariffs, also require time-consuming administrative procedures or investigations. In the case of Section 122 duties, Congress must continue the action authorizing duties after 150 days.

SUBSCRIBE FOR FREE! tariffs. Four of those judges also stated that such an authorization by Congress would never be authorized.

However, four of the federal appellate court judges dissented, agreeing that in authorizing the President to “regulate” international trade in IEEPA Congress had authorized the President’s imposition of the fentanyl or reciprocal trade tariffs.

The V.O.S. case has been appealed

To avoid these procedures, the majority of the “America First” tariffs have thus been imposed under the International Emergency Economic Powers Act (IEEPA). This law allows an immediate action to regulate imports and exports once the President has declared a national emergency. It is often used to impose economic sanctions against foreign countries, companies, or individuals.

However, unlike other laws, IEEPA never mentions tariffs or duties. It instead says that the President can “regulate” imports and exports. The Administration claims that the power to “regulate” is enough authority to impose fentanyl or reciprocal tariffs against certain countries.

To date, the courts considering these arguments have agreed with importers that IEEPA does not authorize the imposition of President Trump’s tariffs.

In the lead case, V.O.S. Selections, Inc. v. Donald J. Trump, et al, the Court of International Trade unanimously held that Congress did not give the President the authority to impose tariffs under IEEPA. With all judges hearing the case en banc, seven judges of the United States Court of Appeals for the Federal Circuit agreed that IEEPA did not authorize President Trump’s specific

Regardless of how the Supreme Court rules, parcel shippers should not expect significant changes to the Trump America First Policy. to the United States Supreme Court. It is on a fast-track, with oral arguments scheduled for November 5, 2025. The case appears destined to be a historic ruling about the power to tax and regulate foreign trade under the US Constitution.

Regardless of how the Supreme Court rules, parcel shippers should not expect significant changes to the Trump America First Policy. The Supreme Court may hold that Congress did constitutionally give the President the power to impose tariffs under IEEPA. The Court could also hold that only the specific IEEPA tariffs that were legally challenged are unlawful, or that its ruling only applies to the specific plaintiffs.

However, even if the Supreme Court rules that none of the IEEPA tariffs are authorized, Congress always has the authority to adopt and ratify the tariffs President Trump has already imposed.

The President can also impose tariffs using other laws. As noted, many of the America First tariffs that have been imposed are Section 232 or 301 tariffs.

These statutes provide clearer authority for

the President to impose tariffs. Indeed, on September 25, 2025, the same federal appellate court that held that the current IEEPA tariffs are unlawful affirmed the lawfulness of modifications of certain Section 301 tariffs that President Trump imposed against Chinese goods during his first term.

President Trump’s “suspension” of the de minimis program may also not be immediately affected by the current Supreme Court litigation. While involving many of the same legal issues, the challenges to suspending de minimis imports are the subject of a separate litigation, which may continue once the Supreme Court has issued its ruling.

Over $171.3 billion in tariffs have been paid since President Trump took office on January 20, 2025 through August 31, 2025. Even if declared unlawful, the ability of parcel shippers to obtain refunds of IEEPA tariffs is unclear. The Supreme Court could order a blanket refund; send the case back to the lower courts to fashion a mechanism for refunds; or require individual importers to file their own lawsuits if they want to seek a refund.

Parcel shippers anticipating possible refunds of their IEEPA tariffs should be monitoring their current imports; the imposition of specific IEEPA tariffs; and either seeking extensions of their entry liquidation dates or filing protests with Customs to ensure that they protect their legal rights to claim duty refunds if the IEEPA tariffs are ultimately struck down.

Parcel shippers should also recognize that the America First Trade Policy and higher tariffs are unlikely to go away as a result of the litigation.

Andrew M. Danas is a partner with the Washington, D.C., law firm of Grove, Jaskiewicz and Cobert, LLP, Washington, D.C. 20036. Visit www.gjcobert.com or email adanas@danaslaw.com for more information.

The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 17

States to pursue perpetrators of fraud on its own, the FCA allows private citizens to file suits on behalf of the government (called “qui tam” suits) against those who have defrauded the government. Private citizens who successfully bring qui tam actions may receive a portion of the government’s recovery. Many Fraud Section investigations and lawsuits arise from such qui tam actions. (emphasis added) The Department of Justice obtained more than $2.9 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2024. More information about those recoveries can be found at https://www.justice.gov/archives/opa/pr/ false-claims-act-settlements-and-judgments-exceed-29b-fiscal-year-2024, and the 2024 FCA statistics can be found at https://www.justice.gov/archives/opa/ media/1384546/dl."

PARCEL COUNSEL INTERNATIONAL: WHISTLEBLOWERS AND THE FALSE CLAIMS ACT

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By Brent Wm. Primus, J.D

he False Claims Act (FCA) is a federal statute that traces its roots to the 14th century in England. As we will see, it is very much alive and well in 2025 in the United States.

The FCA is now codified as 31 U.S.C. §§ 3729 – 3733. The Depart of Justice website describes it as follows: "The FCA provides that any person who knowingly submits, or causes to

submit, false claims to the government is liable for three times the government’s damages plus a penalty that is linked to inflation.

FCA liability can arise in other situations, such as when someone knowingly uses a false record material to a false claim or improperly avoids an obligation to pay the government.

Conspiring to commit any of these acts also is a violation of the FCA. In addition to allowing the United

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The concept of qui tam arose in 1318 when King Edward II offered one third of the penalty to a person that successfully sued government officials who moonlighted as wine merchants.

During the American Civil War, there was extensive fraud by government contractors. As a result, Congress passed the False Claims Act, which President Lincoln signed into law in 1863.

The law included a qui tam provision for someone who successfully sued on behalf of the government which entitled such persons (relators) a percentage of any recovery. The sponsor of this legislation was US Senator Jacob M. Howard who justified payments to those we now call relators and, informally, “whistleblowers” stating: "I have based the [qui tam provision] upon the old-fashioned idea of holding out a temptation, and ‘setting a rogue to catch a rogue,’ which is the safest and most expeditious way I have ever discovered of bringing rogues to justice."

Source: Wikipedia - False Claims Act of 1863 It should be noted that not all whistleblowers are rogues. They could also be persons who are doing what they believe

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to be the right thing to do under the circumstances. In the modern era, they are very often business competitors.

I first learned of the False Claims Act in the early 1990s from an article in the magazine Traffic World. The article described how a furniture manufacturer based in Kansas City had been criminally charged by the federal government under one or more provisions of the Fraudulent Acts against the Government statutes, which included the False Claims Act. The underlying situation was that this company sold furniture to the government on sales terms whereby the government was charged the invoice price of the various items plus freight charges. The company was audited by the Government Accountability Office (GAO). To the best of my recollection, the article did not report what prompted the GAO to initiate its audit so it is not known whether a whistleblower was involved.

The audit revealed that the furniture manufacturer had an arrangement with its carriers whereby they received an “allowance” from the carriers that was either credited toward payment for future shipments or refunded in cash. The effect of this was to reduce the amount of the freight charges the company actually paid. The company did not refund or disclose such credits to the government, which led to the criminal charges. The company pled nolo contendere (no contest) and paid a $7,000,000 fine!

I had this case in mind when I wrote a previous PARCEL Counsel column titled “Marking Up the Freight: Lawful Revenue Center, or Illegal Fraud” for the December 2010 issue of PARCEL magazine (view PARCELindustry.com/ MarkingUptheFreight). It should also be kept in mind that in addition to the federal False Claims Act, most states have statutes regulating business and trade, which would make this conduct a misdemeanor in transactions involving private parties as well as in transactions involving the government.

Which brings us to 2025 and international shipping when in June of 2025 the Ninth Circuit Court of

Appeals announced its decision in the case of United States ex rel.

Island Industries Inc. v. Sigma Corp., No. 22 55063, __ F.4th __. A portion of the court’s summary of its decision reads as follows: A jury found Sigma Corp. liable under the False Claims Act for knowingly making false statements on customs forms to avoid paying tariffs on some of its imports from China. Island Industries, Inc., filed suit under the False Claims Act, alleging that Sigma made two types of false statements on customs forms to evade antidumping duties that applied to welded outlets.

So what does this mean for businesses importing goods into the United States?

The consequences for noncompliance with the laws and regulations administered by the CBP have very significantly increased.

The court held that: 19 U.S.C. § 1592 [of the Tariff Act], which provides a specific mechanism for the United States to recover fraudulently avoided customs duties, does not displace the False Claims Act as to claims like Island’s. Rather, § 1592 overlaps with the False Claims Act, which reaches antidumping duties that an importer has fraudulently evaded paying.

So what is the significance of that very legally technical excerpt from the decision? In plain English, it dramatically raises the stakes for violations of the laws and regulations administered by US

Customs and Border Protection (CBP).

The jury returned a verdict in favor of Island Industries finding that Sigma was liable for violating the FCA and that it owed $8,085,546.00 in underpaid duties. The court trebled this amount to $24,256,638.00 and added additional penalties resulting in a total judgment of $26,080,783.00. Based on the decision of the Circuit Court of Appeals, the trial court awarded more than 2.7 million dollars as a qui tam payment to Island Industries.

Sigma had argued that the Tariff Act applies, and not the False Claims Act. The court ruled that both the Tariff Act and the FCA could apply, meaning that the FCA can be applied to tariffs covered by the Tariff Act. So what does this mean for businesses importing goods into the United States?

The consequences for noncompliance with the laws and regulations administered by the CBP have very significantly increased. As in other areas of the law, saying that one was not aware of the law is not a defense. Accordingly, importers must take steps to review and make certain that all of their procedures strictly comply with the CBP rules.

To conclude, whenever conducting business with the federal government or being involved in activities subject to government regulation, strict compliance with the applicable rules, whether they be in a statute, regulation or the terms of a contract, should be strictly adhered to.

All for now!

Brent Wm. Primus, J.D., is the CEO of Primus Law Office, P.A., the Senior Editor of transportlawtexts, inc., and Director of Virtual Education for the Transportation and Logistics Council, Inc. Your questions are welcome at brent@primuslawoffice.com.

The information contained in this article is intended to be general background information. It does not constitute and should not be relied upon as legal advice. Readers should contact a qualified attorney should they have a specific legal question.

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By Srividya Jandhyala

FROM BORDERS TO BUBBLE WRAP: THE GEOPOLITICS OF YOUR ONLINE BUYS

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n e-commerce platform where individual sellers with personal storefronts sell handmade or vintage items in the tradition of an open craft fair probably never expected their success to be defined by geopolitics. Yet, Etsy’s Seller Handbook now has a long section explaining what global tariffs mean for shop owners and what they should do about them. How is geopolitics rewriting the rules for e-commerce?

The digital revolution has made cross-border e-commerce more accessible and convenient. Whether it is eyelash serums, soccer balls, cameras, or millions of other products, customers increasingly turn to online retailers, even those located in a different country.

Scroll through different options, place an order, and expect your package at your doorstep. According to one estimate, the size of the global B2C cross-border e-commerce market was expected to reach a staggering $7.9

trillion by 2030, up from just $785 billion in 2021.

Geopolitics, however, can change the trajectory of that growth. And its impact is visible in the shopping options you see, how you order, and the delivery of your package.

Shopping Options Cross-border e-commerce was supposed to democratize shopping. Everyone could reach for a product, sold by any retailer, located anywhere in the world. As long as it could be packed up and shipped, any customer could, in theory, get it.

Companies like Shein made us believe.

Shein, a global e-commerce platform specializing in fast fashion, offers as many as 600,000 items on its platform and ships to 150 countries around the world. But Indian customers couldn’t access Shein products for five years.

In 2020, Shein was one of several Chinese companies banned by India following clashes between India and China along the Himalayan border. Before the

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ban, the app was popular in India; it offered Indian customers a variety of trendy designs at affordable prices.

But once it was blocked, customers had to look elsewhere.

In 2025, the company reentered the market in partnership with the Indian company Reliance Retail. Under a longterm licensing deal, Shein’s technology would support the sale of products manufactured and sourced in India.

Unlike five years ago, when clothes were imported from China, style options for a customer in India look different.

Order and Payment The premise of cross-border e-commerce was that a customer can buy from (and hence pay) a seller in a different country. But payment interoperability is still an issue.

According to one study, about a third of firms in Southeast Asia reported losing online export sales because they were unable to accept payments from foreign customers. In other words, these sellers

SUBSCRIBE FOR FREE! couldn’t accept payments the way buyers wished to pay.

But which payment system should they adopt? Research finds that geopolitically distant countries are much less likely to interlink payment systems. In a world of rising geopolitical tensions, there is growing competition among payment systems that are backed by different governments vying for efficiency and supremacy.

Package Delivery If you found what you were looking for, and managed to pay the seller, you might expect your cross-border e-commerce experience to end with the package at your doorstep.

But when the US suspended the “de minimis” rule that allowed imported items below a certain threshold to avoid customs duties, many shipping services across the world paused deliveries. They needed time to revamp their paperwork and payment processes. Small Etsy vendors based outside the US now have to re-evaluate their prices.

Customs procedures and cross-border shipping remain a challenge, with the risk of delays and added costs.

Customs clearance can be delayed if a seller fails to attach the right documentation. Not assigning the right code can be devasting for small sellers whose margins are slim.

According to one study, about a third of firms in Southeast Asia reported losing online export sales because they were unable to accept payments from foreign customers.

Given the central role of customs procedures in e-commerce, geopolitical tensions can incentivize

governments to use administrative policies in blunting the competitiveness of products from certain countries. Ask Dutch farmers, who are major producers of tulip bulbs. At one point, the Netherlands exported tulip bulbs to almost every major country in the world except Japan. As it turned out, Japanese customs officials took particular interest in Dutch tulips.

Perhaps hoping to shore up their own domestic producers — Japanese farmers were once major tulip growers themselves — customs officials insisted on checking every single bulb by cutting it vertically down the middle. Even Japanese ingenuity couldn’t stitch them back together and bring them to market.

Srividya Jandhyala is a Professor of Management at ESSEC Business School.

She is the author of The Great Disruption: How Geopolitics is Changing Companies, Managers, and Work.

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By Yogesh Kulkarni

THE PACKAGING REVOLUTION: TRILLIONS IN TRANSITION TOWARD SUSTAINABILITY AND SMART TECH

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s the backbone of global commerce, packaging is no longer just about boxes, bottles, and wraps. It's about sustainability, smart design, customer experience, and artificial intelligence.

With markets shifting and consumer demands evolving, the global packaging solutions market is entering an era of transformative growth.

According to recent findings from Towards Packaging, the global packaging solutions market is expected to grow from USD $1.307 trillion in 2025 to USD $1.907 trillion by 2034, expanding at a Compound Annual Growth Rate (CAGR) of 4.33% over the forecast period. This momentum is not just about volume; it's about value creation through innovation and sustainability.

Global Outlook: Europe Leads, Asia-Pacific Surges Ahead Europe, known for stringent environmen-

tal regulations and advanced packaging infrastructure, continues to dominate the global market in 2025. However, the spotlight is rapidly shifting toward Asia-Pacific, with countries like China, India, and Southeast Asian economies driving exponential growth through e-commerce and fast-moving consumer goods (FMCG).

Materials in Motion: Paper Rises as Plastic Reigns While plastic remains the dominant material, its supremacy is being tested by the rise of paper and paperboard.

Consumer demand for biodegradable and recyclable solutions is pushing brands to reimagine their packaging lines.  The recycled packaging segment was a standout in 2025, leading market share as brands scrambled to meet carbon-neutral goals.  Conversely, new and hybrid packaging solutions are gaining traction blending bio-based plastics, hemp pulp, and

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aluminum for function and form.

A notable case includes PAPACKS’ partnership with Wandarra in Australia.

Announced in July 2024, this collaboration aims to replace fossil plastic packaging with hemp-based alternatives, addressing a country where only 49% of the 5.5 million tons of annual packaging waste is recycled.

Sector Shifts: E-Commerce & Food Drive Demand The digital boom continues to rewrite packaging priorities. From durability and shelf-life extension to last-mile branding, packaging is becoming the silent salesman. Food and beverage was the leading end-user segment in 2025, driven by convenience packaging, on-the-go formats, and rising home deliveries.  Meanwhile, the healthcare sector is poised for rapid expansion, thanks to temperature-sensitive materials and

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tamper-proof innovations that meet regulatory compliance.

According to the US Census Bureau, e-commerce sales accounted for 16.2% of total retail sales in Q1 2025, underscoring packaging's integral role in brand trust, customer satisfaction, and product safety.

The Green Wave: Consumers Want Clean Packaging Sustainability is not just a trend; it's a consumer expectation. Circular economy models are pressuring brands to switch to recyclable, reusable, and compostable formats. Governments across the globe are tightening packaging mandates, including the EU’s Packaging and Packaging Waste Regulation (PPWR) requiring all packaging to be recyclable by 2030.

The sustainable packaging industry is set to grow from USD $294.30 billion in 2024 to USD $557.65 billion by 2034, at a 6.6% CAGR. Key players include Amcor Plc, WestRock LLC, Berry Global Inc, Huhtamaki Oyj, and more.

Brands like Nestlé, Unilever, and Amazon are responding with paper

bottles, compostable mailers, and plant-based wrappers. This shift isn’t just ethical; it’s economical.

Artificial Intelligence: The Brain Behind the Box From material optimization to predictive demand planning, artificial intelligence is revolutionizing packaging design and supply chains.  AI-driven CAD tools are now used to simulate strength-to-weight ratios, reducing material waste by up to 25%.  Machine learning algorithms analyze consumer usage patterns, optimizing packaging for regional shipping and in-store behavior.  Smart packaging solutions, including RFID, QR codes, and freshness sensors, are elevating engagement and traceability.

Challenges on the Horizon Despite strong growth prospects, the packaging industry is not without its hurdles:  Raw material price fluctuations, especially in oil-based plastics and pulp, continue to disrupt manufacturer margins.

 Recycling infrastructure limitations in developing regions hinder large-scale sustainable packaging deployment.  High costs of R&D and smart packaging technology are still barriers for smaller manufacturers and startups.

What Lies Ahead?

The future of packaging lies at the intersection of sustainability, intelligence, and consumer experience. As packaging transforms into a strategic differentiator, companies that embrace AI, digital design, and closed-loop materials will lead the charge into the trillion-dollar future.

Whether it's a biodegradable bottle or a box that talks to your smartphone, the next decade in packaging is about far more than what’s outside; it's what’s inside that transforms markets.

Yogesh Kulkarni is an experienced Research Analyst specializing in the packaging sector, with a strong foundation in statistical analysis and market intelligence. He currently contributes his expertise to Towards Packaging.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 23

ECONOMIC CONDITIONS IMPACTING US SMALL BUSINESSES

By Ben Johnston

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ritical issues continue to challenge small businesses, from tariffs and strained supply chains to ongoing inflation, access to funding and a tight labor market.

Here are the key factors impacting the small business economy today and what organizations can do to work around them: Inflation: Small business owners face a number of challenges today, including the residual effects of the inflation spike of 2021 and 2022, elevated cost of capital due to a higher interest rate environment, and a tight labor market for those looking to add staff. Small businesses must also contend with elevated interest rates and disgruntled customers who are still upset by the significant runup in prices over the past several years.

Advice for Navigating This: Business owners should be judicious in their expansion plans. In uncertain economic times it is important to focus on goods and services that provide a demonstrated value to customers. Before launching a new product or opening a new facility, it is important to thoroughly test the market to determine demand and pricing power. Make sure that expected sales will more than cover anticipated expenses and be sure to have access to sufficient capital to cover several months of operating expenses in case anticipated sales take longer than expected to materialize.

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Tariffs: Tariffs on the import of foreign goods could, over time, make manufacturing in the US more economic relative to importing goods from abroad, which could be good for some industries. But in the short to medium term, these tariffs are likely to drive inflation significantly higher and cause significant disruption to the global supply chain, threatening many US jobs at manufacturers, wholesalers, and retailers who rely on the global supply chain to source the components, raw materials, and finished products they sell. Higher tariffs will certainly cause prices to rise for US consumers, as tariffs drive up the cost of the product being imported and these costs must be passed on to the customer. This will not only spur inflation but will lower overall consumption, slowing the economy.

President Trump’s executive order repealing the “de minimis” tariff rule is poised to have a significant impact on a wide range of small businesses. Some of the most impacted will be small e-commerce retailers that reach their customers through platforms such as Amazon, Etsy, Ebay, or Shopify. While many of these retailers are domestically owned and operated, many others operate from overseas and have used the previous $800 de minimis limit to flood the US with incredibly low-cost consumer goods including clothing, electronics, beauty products, home goods, and toys.

In addition to retailers, shipping and logistics companies

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out of banks toward higher yielding fixed income products, and commercial defaults have risen substantially. In addition, interest rates are higher today than in years past, making it more challenging for businesses to afford financing. Fortunately, businesses with strong credit profiles and a history of financing essential use equipment have quality options both with banks and non-bank lenders. However, business owners should expect a higher cost of capital than in years past and therefore should calculate the cost of the financing relative to the expected profits that the financing will generate to ensure a positive return on investment.

Advice for Navigating This: For business owners who borrow money to purchase inventory, acquire equipment, and fund expansion, it is important to maintain multiple financing relationships. Banks have been pulling back from lending to small businesses over the past several years, and having contacts at both bank and non-bank lending institutions can help secure the fastest and lowest-cost capital when borrowing is required.

will now have to handle increased processing workloads, which adds cost and slows delivery times.

On the flip side, domestic manufacturers should benefit from less competition and the ability to achieve pricing power in a market that, for many de minimis-impacted products, has become uneconomic to produce in the United States. However, some US manufacturers could be impacted if component parts that they had previously sourced abroad now fall outside of the de minimis exemption.

Advice for Navigating This: US businesses that import critical goods from abroad should determine if it is possible to source these goods domestically or to vertically integrate their supply chains to produce these goods domestically themselves. If domestic production would prove uneconomic, business owners will need to pay close attention to the tariffs being levied and which countries they are impacting most.

Working quickly to move production from one country to another could prove valuable should certain countries receive stiffer tariffs than other neighboring countries with similar production capabilities.

Access to Funding: The market for obtaining small business financing has been tight since banks scaled back their exposure in the spring of 2023 following the collapse of Silicon Valley Bank, First Republic, and Signature Bank. Since that time, many banks have seen deposits move

Access to Labor: Despite significant tightening from the Federal Reserve, labor markets remain incredibly tight. This means that small businesses are struggling to find quality candidates at prices their business can afford. This is especially true for part-time and seasonal employees. This labor shortage will be exacerbated by the crackdown on the hiring of undocumented labor and the large-scale deportation of undocumented individuals. A significant loss of undocumented labor would create a labor shortage that would limit services and move the overall cost of labor considerably higher across the country.

Advice for Navigating This: Consider investing in new technologies and business processes that allow a business to operate with fewer employees. Installing software that can better manage inventory or can help customers self-serve can save time and may allow a business to operate longer with fewer staff. For a business’s most critical employees, consider offering additional perks such as flexible work hours, continuing education, or opportunities for career advancement. Strong relationships and the ability to satisfy employees’ career goals can help retain critical personnel in tight labor markets.

Ben Johnston is the Chief Operating Officer of Kapitus, one of the most experienced and trusted names in small business financing. As both a financing provider and a marketplace with an expansive network of financing partners offering a variety of products, Kapitus has connected over $7 billion in growth capital to almost 65,000 small businesses.

Through Kapitus, small business owners are matched with financing tailored to individual needs, including term loans, revenue-based financing, SBA loans, equipment financing and revolving lines of credit, either directly or through its financing network.

CROSS-BORDER & GLOBAL 2025  PARCELindustry.com 25

THE HIDDEN COSTS OF SUPPLIER EXPANSION Why diversification without discipline creates new risks

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By Peter Follows and Jamie Dunbar upply chain leaders are under pressure. Tariffs, nearshoring trends, taxes on small parcels, climate risks, and rising customer expectations have made the need for supplier diversification increasingly urgent and, in some cases, unavoidable. And while adding more or duplicate suppliers may reduce dependency on any one partner, it also multiplies complexity, and with it, the strain on management.

The bottom line: diversification without strong operational discipline can create more problems than it solves.

The False Comfort of Diversification It’s tempting to think about adding suppliers strictly in terms of lowering risk. But as many leaders have learned, supplier diversification can introduce parallel processes, redundant SKUs, vendor overlap, and compliance

headaches. Complexity creeps in quietly, showing up as hidden costs, delayed decisions, and operational bottlenecks.

Diversification reduces exposure to single points of failure, but it doesn’t eliminate the need for rigorous risk mapping and operational optimization.

An additional wrinkle is that not all new suppliers are equal. Expanding the supplier base often means engaging with unvetted or less financially stable partners, which can shift risk rather than reduce it. And each new supplier typically introduces its own data sources and formats, which complicates reporting and governance.

Balancing Efficiency with Resilience Executives often consolidate suppliers to gain pricing power and simplicity.

But too much consolidation increases vulnerability, while too much diversification breeds inefficiency. The art is

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finding the equilibrium.

A consumer printing and shipping company we worked with learned this firsthand. They attempted to diversify geographically by spreading production across three sites — east coast, west coast, and gulf coast. The logic was sound: produce SKUs closer to where customers lived to cut shipping costs and shorten delivery times. A custom book ordered in New York, for instance, should ship from the east coast rather than the gulf south.

The reality was more complicated.

Some SKUs could only be produced in certain plants, and backlogs at one site often forced jobs to shift to a location farther away. This not only raised costs but also created delivery delays at critical moments such as holidays or milestone occasions. The solution required more than three strategically located facilities. It required disciplined

SUBSCRIBE FOR FREE! planning, capacity optimization, and cross-site alignment so that each plant could flex production when the others fell behind.

Even with physical diversification, resilience depends on the ability to manage production rates, balance backlogs, and ensure consistent quality across sites. Otherwise, the costs of reshuffling work and expediting shipments can outweigh the benefits of a regional footprint.

A Framework for Smarter Decisions Supply chain leaders need structured criteria to guide decisions. One simple but effective framework can be broken down into four elements:  Cost – What do we gain or lose financially with each supplier decision?  Risk – How does diversification or consolidation impact supply continuity?  Strategic Fit – Does this supplier or network align with our long-term goals?  Agility – How quickly can the supplier scale up or down when demand shifts?

Agility is often overlooked but increasingly vital. A household goods manufacturer recently faced this tradeoff when diversifying cleaning product production between its own US facilities and third-party partners in Mexico.

During COVID, nearshore vendors proved invaluable when labor shortages crippled domestic plants. To preserve that safety net, leadership chose to keep a portion of volume external, even though it cost more per unit than producing in-house.

This decision created short-term financial pain but preserved long-term flexibility. The external partner remained engaged and capable, providing insurance against future shocks. It’s a vivid example of how scenario planning and risk quantification matter: companies must weigh immediate margin pressure against the value of preserving capacity and relationships that might save them in a crisis.

When the Pressure Cascades Complexity doesn’t just stay at the

executive level. It cascades to the front lines. More suppliers mean more handoffs, more SKUs, and more decisions for teams already working at full tilt.

Leaders must prepare their organizations for this pressure by:  Equipping teams with real-time visibility tools.  Capturing and sharing institutional knowledge across sites and geographies.  Training managers to handle parallel workflows without losing productivity.

Diversification doesn’t succeed without the people who manage it daily.

While diversification spreads risk, resilience comes from visibility, governance, operational discipline, and supplier partnerships built on shared foresight.

Building Partnerships Beyond the Contracts The best protection against disruption isn’t always more suppliers. It can be stronger relationships. Transparency, joint forecasting, and aligned packaging specifications can make a lean supplier network more resilient than a bloated, poorly managed one.

Take a mid-sized packaging firm that worked closely with just two core board suppliers. Because those suppliers were looped into quarterly forecasts, they kept extra raw stock on hand and reserved press time during seasonal peaks. When holiday demand spiked, the company met customer deadlines without resorting to costly rush orders,

something competitors with larger but looser supplier networks couldn’t manage.

Particularly in high-margin, low-volume industries, forward-looking companies are increasingly moving beyond transactional purchasing to collaborative partnerships, where suppliers have visibility into demand plans and a seat at the table for capacity planning. In these settings, trust and alignment often outperform sheer supplier count.

Looking Ahead As nearshoring accelerates under tariff and geopolitical pressures, supply chains are increasingly regionalized.

This creates a new set of questions:  Where should capital be allocated to build resilience?  How do companies secure commitments to support growth?  Which supplier relationships should be deepened, not duplicated?

In a landscape of rising complexity, companies that streamline processes, improve equipment reliability, minimize changeover times, and strengthen throughput will have greater predictability and more capacity to absorb shocks.

A strong competitive advantage will be found by organizations that avoid confusing diversification with resilience. While diversification spreads risk, resilience comes from visibility, governance, operational discipline, and supplier partnerships built on shared foresight. For small-package supply chains, where speed and consistency drive loyalty, the challenge is to embrace diversification without letting complexity erode performance. Those who diversify with intent, optimize operations relentlessly, and invest in trust-based supplier relationships will be the ones who win in the long run.

Peter Follows is CEO | Founder of Carpedia International, and Jamie Dunbar is Director | Partner of Carpedia International.

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By Gary Winter

REMAKING THE LAST MILE: HOW OPEN LOCKER NETWORKS CAN RESHAPE DELIVERY IN AMERICA

E

-commerce has made the flow of parcels a defining feature of modern life.

Yet as the US parcel market moves more than 21 billion packages annually, its delivery infrastructure still leans heavily on traditional home delivery. While convenient, this model is increasingly strained by surcharges, porch piracy, and missed deliveries.

Abroad, countries like Japan, the UK, France, and Germany have already embraced parcel lockers as an integral part of their logistics networks. The US now faces a choice: continue struggling with inefficiencies or build a cost-effective, consumer-friendly network of alternative delivery locations that meets the demands of the future.

Global Success: A Proven Model The US is not the first market to grapple

with the challenges of modern e-commerce. Cities across Europe and Asia have already shown that parcel lockers can move from novelty to necessity with remarkable speed.

In the greater Tokyo area, for example, more than 4,500 lockers are in operation, with 95% of residents living within a five-minute walk of one, according to Quadient. These networks thrive because they blend scale, density, and convenience.

Once lockers are widely available, consumer adoption follows quickly.

Amazon has already helped educate US shoppers on the concept. Now it’s time to move beyond closed systems to open networks that benefit carriers, retailers, and consumers alike.

Establishing a Locker Network in the US For US consumers, two forces shape delivery choices above all else: cost and

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convenience. Home delivery remains the benchmark for convenience, but lockers are emerging as a solid alternative, especially when failed drop-offs or porch piracy threaten reliability.

Cost adds another layer of incentive.

Since lockers are classified as business addresses, they avoid residential surcharges. What might cost $6.99 to ship to a doorstep could cost less than half that to ship to a locker.

Generational preferences are also accelerating the shift toward locker-based delivery. Gen Z and millennials, who are fluent in automation and self-service, gravitate toward lockers for returns and C2C shipments.

Instead of waiting in line at the post office, they can complete transactions quickly, anonymously, and on their own schedule Even so, long-term adoption will depend on location strategy and

SUBSCRIBE FOR FREE! Americans’ ability to habit stack locker engagement with other frequented locations. For example, gas stations — deeply rooted in America’s car culture and now evolving alongside the rise of EV charging — are a natural fit for locker placement. Similarly, grocery retailers like Kroger may provide opportunities to integrate lockers seamlessly into established shopping routines.

In multifamily housing, lockers near entrances and parking areas often fill within hours, which only proves how naturally they fit into residents’ daily routines. The need for lockers is especially urgent in dense urban centers like Manhattan, where an estimated 90,000 packages are stolen each day, underscoring the demand for secure delivery alternatives.

It’s important to recognize that for retailers and carriers, lockers are more than a convenience and security measure. They are an efficiency engine.

Consolidating multiple deliveries into lockers reduces failed drop-offs, cuts emissions, and lowers operational costs.

They also streamline returns, a growing pain point in e-commerce.

In fashion retail, where return rates average more than 20%, lockers reduce checkout abandonment rates and reduce the inconvenience of returns. By sidestepping residential surcharges and avoiding inefficiencies, lockers create savings that can either be reinvested or passed back to consumers.

The Road Ahead The future of last-mile delivery lies in open locker networks. Unlike siloed, carrier-owned solutions, open networks allow multiple carriers to share infrastructure, maximizing efficiency and consumer access.

Amazon has already educated US consumers on the benefits of lockers, but the opportunity extends far beyond

a single retailer. Even a modest shift of just five to 10% of US parcels moving to lockers would unlock significant growth potential, given the scale of the market. For landlords, retailers, and carriers, now is the time to invest in open networks that will define the future of last-mile logistics.

The US does not need a revolution in last-mile delivery, only a shift in mindset.

Lockers should be seen as essential infrastructure like broadband or transportation, not a nice-to-have amenity.

The message is clear: Embrace open locker networks now to meet consumer demand, enhance efficiency, and reduce risk. The future of last-mile delivery is secure, convenient, and cost-effective.

And lockers are at the heart of it.

Gary Winter is a consultant for Quadient.

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TO SUM UP Certain visibility into the entire supply chain will only become more important in the coming years. And while you may find that your current supply chain tools are serving you adequately, few things in this industry are more constant than change and unforeseen complications.

— THOMAS STRAIN

The end of de minimis and tariff uncertainty accelerates this change, ensuring that compliance costs are borne regardless of mode. When duties apply either way, time becomes the differentiator. Air freight’s value proposition (speed, flexibility, and just-in-time capability) has never been stronger.

— RATHNA SHARAD

Customs procedures and cross-border shipping remain a challenge, with the risk of delays and added costs. Customs clearance can be delayed if a seller fails to attach the right documentation.

Not assigning the right code can be devasting for small sellers whose margins are slim.

US businesses that import critical goods from abroad should determine if it is possible to source these goods domestically or to vertically integrate their supply chains to produce these goods domestically themselves. If domestic production would prove uneconomic, business owners will need to pay close attention to the tariffs being levied and which countries they are impacting most.

In fashion retail, where return rates average more than 20%, lockers reduce checkout abandonment rates and reduce the inconvenience of returns.

By sidestepping residential surcharges and avoiding inefficiencies, lockers create savings that can either be reinvested or passed back to consumer.

— SRIVIDYA JANDHYALA

— BEN JOHNSTON

— GARY WINTER

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GLOBAL SHIPPING. SMARTER STRATEGY. • Navigate carrier networks & surcharges • Gain clarity across markets & service options • Optimize regional vs. global agreements • Achieve measurable cost reductions EXPERT GUIDANCE FOR YOUR NEXT GLOBAL NEGOTIATION.

Parcel | LTL | TL N. America | EMEA | ASPAC 714.777.3377 | info@alexandrettaconsulting.com www.alexandrettaconsulting.com