IDEAS home Printed from
   My bibliography  Save this paper

Logistics Reform for Low-Value Shipments


  • Gary Clyde Hufbauer

    () (Peterson Institute for International Economics)

  • Yee Wong

    (Peterson Institute for International Economics)


Sharp reductions in tariffs and quotas have propelled dramatic growth in global trade over the past several decades. Often overlooked, however, are the costs associated with trade logistics. In many countries logistics costs are greater deterrents to trade than remaining tariffs. Studies show that trade facilitation—i.e., the reduction of logistics costs—could increase annual global manufactured exports by as much as $400 billion. Hufbauer and Wong focus on two barriers that specifically hamper low-value shipments: (1) an unduly restrictive de minimis exemption from customs duty for low-value imports and (2) an unduly low "informal entry" threshold, the dividing line that determines whether the shipment requires just a little paperwork or a lot of paperwork to clear the entry process. The authors' estimates for the United States reveal that the payoff associated with raising thresholds and reducing "exceptions" could be significant. An increase in the de minimis threshold to $800 would generate net gains of around $17 million annually, taking into account the cost savings at each stage of the delivery chain and the revenue not collected by the customs authority. The saving of paperwork costs alone on de minimis entries might be $33 million a year. Raising the informal entry threshold to $2,500, and slashing the number of "exceptions," could generate net gains of $81 million per year. For emerging-market economies, potential gains from higher de minimis and informal entry thresholds are very likely more substantial relative to the size of their economies. Improving logistics and raising thresholds for low-value shipments are powerful and relatively inexpensive means of enhancing the trading system.

Suggested Citation

  • Gary Clyde Hufbauer & Yee Wong, 2011. "Logistics Reform for Low-Value Shipments," Policy Briefs PB11-7, Peterson Institute for International Economics.
  • Handle: RePEc:iie:pbrief:pb11-7

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Edwin M. Truman, 2006. "Reforming the IMF for the 21st Century," Peterson Institute Press: All Books, Peterson Institute for International Economics, number sr19.
    2. Mohsin S. Khan & Sunil Sharma, 2001. "IMF Conditionality and Country Ownership of Programs," IMF Working Papers 01/142, International Monetary Fund.
    3. Edwin M. Truman, 2006. "Strategy for IMF Reform, A," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa77.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iie:pbrief:pb11-7. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peterson Institute webmaster). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.