Sent Items #176: Sunday, January 19, 2025

What happens when I take a week off from writing (I’ve set a goal of a weekly Sent Items) is I drown in news to write about!

I’m on my way to Vegas to attend the Fancy Food Show. I’m told it’s like walking around a Costco, sampling new foods. Of course I’m there strictly for marketing purposes, helping up and coming CPG brands with their fulfillment and logistics needs. Let me know if you will be at the conference!

Let’s see what hit my radar this week:

• TikTok CEO Planning to Attend Trump’s Inauguration (link) - me thinks they will be juuuuust fine 😉 However, as of this morning, the banning of the App is officially implemented, as I noticed this morning when searching for it in the Apple App Store. I suspect this will be very shortt lived.

• Another carrier bites the dust - Pandion abruptly announced they are closing up shop (link).

• Much shakeup in the U.S. carrier ecosystem - my friend Doug King (VP Transportation at Stord) has a great post on what’s happening (link). Meanwhile Veho is doing some interesting stuff in the space. They announced a partnership with ShipHero (link) and just this week announced a new Premium Economy service (link)

• I contributed to an article titled 6 strategies to automate your operations that Fulfil, a modern ERP system published (link)

• Amazon Prime will no longer let clothing shoppers 'try before you buy' after this month (link)

• But the big story this week, like most weeks over the last few months, is tariffs / Section 321 / China. Earlier last week the CBP proposed a new rule to strengthen enforcement or parcels entering the country (link).

• Finally, and relatedly, I am speaking on a panel at the end of the month called Navigating Section 321 & Tariff Uncertainty in 2025. It is hosted by my friend Kyle Hency (Founder/CEO of GoodDay, prev Founder/CEO of Chubbies) along with Aaron Rubin (Founder/CEO of ShipHero) and Chad Carleton (CEO of Good Company, prev CEO of Everything Kitchens). You can reserve your spot here (link)

Let’s lead with the most important topic in e-commerce right now - tariffs.

Man, this is a confusing topic. There is China. There is Mexico. There are other countries involved. There is de minimis. There is Section 321, and 301 and Type 86. This is a very confusing issue and it is evolving quickly. Heck, just last night the WSJ wrote a story that Trump told advisers he wants to visit China as President to deepen a relationship strained by the threat to impose steeper tariffs on Chinese imports.

Earlier last week CBP announced draft changes to 321 (link) known as a Notice of Proposed Rulemaking (NPRM) that could exclude China-made products from the U.S. de minimis exemption. Currently, goods valued under $800 can be imported duty-free under the "Section 321" exemption. Only excluding antidumping and countervailing items, a small percentage of 321 imports, and typically not e-commerce related.

If this rule is finalized after the 60-day comment period, products on the Section 301 tariff list (including apparel, fashion, electronics), will be ineligible for de minimis treatment—meaning duty will apply on all imports, regardless of value.

This comes as many merchants are re-evaluating fulfillment strategies following Mexico’s exclusion of finished apparel from its IMMEX program. Some merchants were considering holding inventory in Canada to leverage the Section 321 exemption for duty-free U.S. consumer shipments. This NPRM throws a wrench in those plans for any impacted products.

General consensus is that any change in policy would be enacted to punish China-based marketplaces such as Temu and SHEIN. This new proposal grants CBP discretion to exclude anything at their discretion. This is short-term good news for those using 321 to import duty free into the US.

So will Section 321 live another day (sic: year …. sic: decade)? Or is the reality that the loophole is closing, and product that originates in China and eventually sold in the U.S. - regardless of how it arrives here and at what value - will be charged a tariff?

My perspective is that while it is fair to take advantage of loopholes, the sheer volume of product and brands taking advantage of it - particularly those companies that pose some level of national security concern - has created new levels of scrutiny that the Trump administration will likely curb.

• Another carrier bites the dust - Pandion abruptly announced they are closing up shop (link).

  This one felt like a grift from day one. 63 employees lost their jobs, without severance. Just 10 months ago, Pandion raised $41M, with sales forecasted north of $200M.

  The changes at USPS with workshare partners caused Pitney to close and others in recent memory. Pandion had a similar model, injecting volume into regional carriers, essentially a regional carrier arbitrage model. With the door firmly closed to inject into a low cost last mile carrier like USPS, these models fundamentally broke.

• With Pandion and Pitney now out of the market and services like UPS Surepost’s changed forever, the number of options in the market is being reduced.

• Even more shakeup in the U.S. carrier ecosystem - my friend Doug King (VP Transportation at Stord) has a great post on what’s happening (link). Meanwhile Veho is doing some interesting stuff in the space. They announced a partnership with ShipHero (link) and just this week announced a new Premium Economy service (link)

• Amazon Prime will no longer let clothing shoppers 'try before you buy' after this month (link)

• Amazon is shutting down its Try Before You Buy Prime program at the end of January. The service has been available to members since 2018, when it was first launched as Prime Wardrobe. With it, you could choose up to six items to try on, and send back whatever you didn’t want within a week for free. You’d only be charged for the items you decided to keep, and you could pick from select clothes, shoes, jewelry and accessories.

A couple final shameless plugs (disclosure: both companies are personal investments of mine):

Parabola announced their PDF parsing took is publicly available on their site (link)

Passport announced they acquired Brand Access. A fantastic milestone which continues to cement Passport as the industry’s leading player with internationalization capabilities through a combination of cross-border and in-country services. (link)

- Matt

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