DELIVER Asia 2026 Conference Recordings

For decades, de minimis thresholds played a central role in cross-border trade.

At DELIVER Asia 2026 in Singapore, David Meads, Field CTO at Zonos, explained how these rules allowed low-value imports to enter countries without duties or taxes.

The concept dates back to 1939 in the United States, when policymakers determined that collecting duties on very low-value imports cost more than the revenue it generated.

To simplify customs operations, governments introduced a minimum threshold below which duties would not be collected.

In the United States, this threshold eventually rose to $800, allowing many small e-commerce purchases to enter duty-free.

Recent policy changes are rapidly reshaping this system.

The United States has already reduced the de minimis threshold to zero for certain shipments, meaning duties must be collected regardless of order value.

Other countries are moving in the same direction.

Thailand has lowered its threshold to effectively zero, the European Union has eliminated its previous exemption for low-value imports, and the United Kingdom has announced plans to remove its threshold in the coming years.

As digital customs systems become more sophisticated, governments now have the technological capability to collect duties efficiently even on low-value shipments.

This means the era of duty-free small parcels is quickly coming to an end.

For retailers selling internationally, the implications are significant.

Without de minimis exemptions, every cross-border shipment may now be subject to duties and taxes.

This introduces new operational challenges, particularly around customs clearance and customer experience.

Historically, many retailers shipped goods using DDU (Delivered Duty Unpaid) models, where duties were paid by the customer when the package arrived.

However, this approach can create significant friction.

Customers may receive unexpected charges upon delivery, leading to frustration and abandoned shipments.

Meads argues that retailers should increasingly adopt DDP (Delivered Duty Paid) shipping models.

Under DDP, duties and taxes are calculated and paid upfront during the checkout process.

This ensures customers know the full landed cost before completing their purchase.

The benefits are significant:

• fewer abandoned shipments

• better customer trust

• smoother customs clearance

• reduced delivery delays

Although DDP may appear more expensive at checkout, it typically leads to higher conversion rates and fewer operational issues.

When customers are asked to pay duties upon delivery, many refuse the package.

This creates a costly cycle for retailers.

The company has already paid for outbound shipping and must then cover return shipping costs. In many cases, the retailer simply abandons the package entirely because retrieving it is not economically viable.

These operational costs often exceed the perceived savings of offering lower upfront shipping prices.

As a result, transparent pricing through DDP is becoming the preferred strategy for cross-border commerce.

As customs enforcement increases, accurate product classification becomes more critical.

Every product crossing an international border must be assigned a Harmonized System (HS) code, which determines the duties and regulatory requirements applied to the shipment.

Historically, classification has been a complex and error-prone process.

Companies must not only identify the correct six-digit HS code but also determine the extended classification codes used by specific countries.

As governments require more detailed shipment data, the accuracy of this classification process becomes essential.

Advances in AI and automation are helping retailers manage these complexities.

Zonos has developed systems that assist with product classification, duty calculation and compliance management.

By training AI models on large datasets of product information and historical classifications, companies can improve the accuracy of HS code assignment.

New tools are also emerging that can identify products in real time.

For example, camera-based systems can scan barcodes or product images on a conveyor belt and automatically classify items as they move through a warehouse.

These technologies help ensure that shipments contain the correct customs data before crossing borders.

The removal of de minimis thresholds marks a major shift for global e-commerce.

Retailers can no longer rely on duty exemptions for low-value goods. Instead, they must build systems capable of handling duties, taxes and compliance requirements for every international shipment.

For companies willing to adapt, this change also presents an opportunity.

By investing in better duty calculation, accurate classification and transparent checkout pricing, businesses can create smoother cross-border experiences for their customers.

As Meads concluded, the future of cross-border commerce will depend on data, automation and proactive compliance strategies.