UPS Disposes of U.S.-Bound Packages Over Customs Paperwork Issues

Trade Update • Oct. 14, 2025

Key Points

• On August 29, 2025, the U.S. ended the “de minimis” exemption, requiring full customs clearance and tariffs on all international packages.
• UPS clears about 90% of packages on the first day, but 10% face disposal if paperwork problems aren’t resolved promptly.
• Thousands of packages stuck in customs, especially at UPS hubs like Louisville, KY, are causing delays and losses.
• UPS tries several times to contact customers for missing information before disposing or returning packages.
• Businesses and consumers report losing goods, including high-value items, due to unclear instructions and vague tracking notices.
• The new customs rules disrupt shipping, raise costs, and require importers to improve customs compliance or seek alternative options.

Following the end of the “de minimis” exemption, UPS, the world’s largest parcel carrier, has started disposing of some international shipments to the U.S. when they cannot clear customs due to missing or incomplete paperwork. This exemption previously allowed packages valued at $800 or less to enter duty-free with minimal checks. Since its removal, all packages require full customs declarations, tariff payments, and documentation.

UPS Clearance Problems 

UPS reports that it clears about 90% of international packages on the first day of customs processing. However, the remaining 10% delays or disposal when shipments arrive with missing or incorrect paperwork.

Thousands of packages are now stuck at UPS customs hubs, especially in Louisville, Kentucky, which serves as the main processing center for U.S. imports.

How UPS Handles Problem Shipments

UPS says it contacts the sender or recipient up to three times to request missing information or documents. If customers do not respond, UPS may return or destroy the package under customs regulations.

The carrier states that it provides tracking updates showing when a package has a “customs issue.” However, many customers say these notices are too vague and do not explain what specific document or action is required. That said, many customers are reportedly getting confused and angry about the situation.

Some shipments have even shown conflicting updates, marked for “disposal” one day, then “in transit” the next, causing confusion among shippers.

Growing Customer Complaints

Businesses and consumers report losing goods, including high-value items, after failing to get clear instructions from UPS. Many say the carrier’s tracking messages do not give enough detail to correct the problem before disposal occurs.

In some cases, customers only discovered that their packages were destroyed after contacting UPS directly or through social media. Small importers have described financial losses from products disposed of before they could resolve the issue.

Market and Logistics Impact

The end of the de minimis exemption has increased shipping costs, slowed customs clearance, and added administrative burdens for international sellers. Some companies are switching to FedEx or DHL, which appear to have fewer disposal cases so far.

E-commerce sellers, especially those in Asia and Europe, now face higher compliance risks and longer delivery times to the U.S. The Universal Postal Union is introducing new digital customs systems to help postal operators meet U.S. import requirements.

What Importers and Consumers Should Do

• Submit complete customs paperwork before shipping.
• Monitor tracking updates and contact UPS support if a “customs issue” appears.
• Respond quickly to requests for additional information or payment.
• Use a customs broker for complex or high-volume shipments.
• Consider multiple carriers to reduce risks during the transition period.

How GHY Can Help?

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.