The impact of customs procedures on business to consumer e‐commerce in food products

Business to consumer (B‐2‐C) e‐commerce offers many potential benefits to firms, including access to geographically dispersed markets across international borders and enabling direct supply chain relationships with consumers. Language and currency differences, consumer liability implications and customs and inspection fees represent barriers to the expansion of international e‐commerce. Comparisons are presented of customs fees for regular and e‐commerce sized shipments of four food products from Canada to the USA. As these fees are largely charged on a flat rate basis, they place e‐commerce shipments at a considerable competitive disadvantage relative to traditional truckload sized shipments. The lack of agreement internationally on how to revise or harmonise customs regulations means that customs fees remain geared towards large shipments. Although the existing system was acceptable when most shipments crossing borders were large truck or container loads, the development of e‐commerce provides a strong incentive for change.