In the wake of sweeping changes to U.S. customs rules, United Parcel Service Inc. is navigating a turbulent landscape of increased package volumes and processing delays. The elimination of the de minimis exemption, which previously allowed low-value shipments under $800 to enter the country duty-free and with minimal paperwork, has reshaped the logistics industry overnight. UPS CEO Carol Tomé highlighted these challenges during the company’s third-quarter earnings call, noting a surge in shipments as consumers and businesses turned to established carriers amid the regulatory shift.

According to Business Insider, Tomé explained that ‘many average people turned to the company to ship things to the US when the de minimis exemption ended.’ This influx has strained UPS’s operations, leading to suspended money-back guarantees for international shipments and customer frustrations over unprocessed or even disposed packages. The changes stem from President Trump’s Executive Order signed on July 30, 2025, suspending duty-free de minimis treatment for all countries, as detailed by the White House.

The Regulatory Overhaul Unpacked

The de minimis rule, dating back to 1930, had been a boon for e-commerce giants and direct-to-consumer sellers from abroad, particularly China. Its abrupt end on August 29, 2025, mandates full customs clearance for nearly all imports, imposing duties up to 50% on low-value goods. U.S. Customs and Border Protection (CBP) announced enforcement readiness in a release, stating it would ‘shut down a pathway long exploited by criminals to move fentanyl, counterfeit goods, and unvetted imports,’ per CBP.

Industry analysts point to prior proposals, such as CBP’s January 2025 notice of proposed rulemaking, which aimed to exclude certain low-value shipments from exemptions to strengthen enforcement. King & Spalding reported that these changes target illicit trade while bolstering domestic retailers crushed by tariff-free competition. However, the rapid implementation has caught carriers off guard, with UPS bearing the brunt due to its extensive international network.

UPS’s Operational Strains Exposed

Posts on X (formerly Twitter) reflect widespread sentiment, with users like fashion commentator Derek Guy noting a backlog leading to UPS destroying packages, amassing nearly a million views. Another post from Tracy Alloway of Bloomberg highlighted the U.S. complicating its tariff structure without adequate infrastructure, echoing concerns in logistics circles. These social media insights underscore the chaos, including reports of 25 countries halting shipments to the U.S., as shared by FinanceLancelot on X.

Simply Wall St News analyzed how these customs disruptions have led to delays and customer complaints for UPS, potentially reshaping its international logistics outlook. In a recent earnings discussion, Tomé admitted the company saw ‘more packages’ but also ‘customs issues,’ prompting operational adjustments like halting refunds on delayed international deliveries, as covered by Simply Wall St News.

Broader Industry Ripple Effects

The end of de minimis has broader implications beyond UPS. BBC reported that millions of shipments will now face duties, hitting U.S. shoppers with higher costs for lower-price goods. Logistics firms like FedEx, however, appear to be managing better, with no similar reports of package destruction, suggesting UPS’s challenges may stem from internal processing bottlenecks rather than universal government backlogs.

Lori Wallach, in X posts, clarified there’s no ‘paperwork backlog’ as the system is automated via CBP’s ACE platform, using the same 7501 form for all packages over $200 (excluding gifts). This contradicts misinformation online, emphasizing that UPS’s issues are isolated. Hogan Lovells noted the executive order’s focus on China initially, expanded globally to address synthetic opioid supply chains.

Economic and Trade Implications

Economists warn of inflationary pressures as import costs rise, potentially benefiting domestic manufacturers but burdening consumers. White & Case LLP detailed how the suspension eliminates duty-free entry for shipments valued at $800 or less, effective August 29, 2025, forcing carriers to adapt to new compliance requirements.

Recent updates from GHY International on September 24, 2025, include CBP’s clarifications on operational requirements for qualified carriers, such as automated system changes to enforce the suspension. This has led to new processes for collecting duties upfront, as explained in Ship by Mail‘s guide to duties and taxes for all U.S. imports from Canada.

Navigating the New Normal

For UPS, the path forward involves investing in technology and partnerships to streamline customs processing. Industry insiders suggest leveraging AI-driven platforms to handle increased data requirements, reducing errors and delays. Posts on X from ITN Logistics highlight UPS’s decision to end money-back guarantees, a move seen as necessary amid unprecedented volumes.

Global postal services are also affected, with PostEurop warning of disruptions to international mail starting August 29, 2025, deviating from Universal Postal Union standards. UK businesses, per World Options, must now prepare for full customs clearance on all U.S.-bound shipments.

Voices from the Front Lines

Customer anecdotes on X, such as from Truth May Hurt, describe exorbitant warehousing fees, with one user claiming a $100 package incurred $1200 in holds due to customs swamping. Julia Davis on X reported order cancellations as countries suspended American-bound shipments, amplifying the global trade friction.

Holland & Knight insights from January 2025 proposed modifications to exclude low-value shipments from exemptions, a precursor to the full suspension. As the industry adapts, UPS’s experience serves as a case study in regulatory resilience, with Tomé’s leadership under scrutiny amid these headwinds.

Future Outlook for Logistics Giants

Looking ahead, experts predict consolidation in the shipping sector as smaller players struggle with compliance costs. FlavorCloud outlined how the rule change will alter online shopping, urging consumers to anticipate duties on overseas purchases.

Ultimately, the de minimis overhaul aims to secure borders and level the playing field, but at the cost of short-term disruptions. UPS, with its vast network, is poised to emerge stronger if it can resolve current bottlenecks, setting a precedent for how global logistics firms handle policy-driven upheavals.