Mastering Section 321 Fulfillment: A Strategic Advantage for Cross-Border E-commerce

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📅 March 3, 2025 – Section 321 Status Update

As of March 2, 2025, a clarification issued by the White House confirms that duty-free de minimis entry under Section 321 remains active—at least for now. This means eligible goods valued at $800 USD or less can continue to enter the United States without incurring duties, provided all compliance requirements are met.

However, it’s important to note that the Executive Order limits eligibility strictly to goods originating from Canada and Mexico. Shipments with a country of origin listed as China are no longer eligible for duty-free entry under Section 321 starting May 2nd. Businesses relying on Chinese imports will need to explore alternative strategies to manage cost and compliance.

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For Canadian businesses selling into the U.S., customs duties and slow border processes are often some of the biggest hindrances to growth. Enter Section 321: a U.S. customs provision that allows for duty-free imports on shipments valued at $800 USD or less per recipient, per day.

When Section 321 is integrated into a logistics strategy like ours—where warehousing, brokerage, and transportation are all under one roof—it becomes more than a tactic. It becomes a competitive advantage.

Why Section 321 Matters Now

Section 321 is part of the Trade Facilitation and Trade Enforcement Act (TFTEA), enacted to encourage low-value trade by simplifying customs processing.

Key benefits for qualifying shipments:

• Duty- and tax-free entry for shipments up to $800 USD
• No formal customs entry for eligible goods
• Faster clearance at the U.S. border
• Streamlined fulfillment for direct-to-consumer (DTC) E-commerce

These benefits deliver the most impact when built into a fulfillment model like ours, where warehousing, compliance, and transportation work together in one unified system.

Which Industries Use Section 321?

Section 321 is widely used across industries, but especially by those shipping high-volume, low-value goods where cost efficiency is critical.

Industry	Why Section 321 Works
Apparel and Footwear	Avoids high import duties on fashion items
Electronics Accessories	Reduces the impact of Section 301 tariffs on China-made products
Health and Beauty	Speeds up delivery of consumer goods under $800
Lifestyle and Home Goods	Eliminates need for in-country U.S. warehousing

This model is especially appealing for small to mid-sized businesses, where cash flow and fast delivery can make or break market expansion.

Compliance, Handled

Executing Section 321 correctly at scale requires precision. SFI builds compliance checks into every step of the fulfillment process:

• Integrated E-commerce order sync connects with platforms like Shopify to import orders in real time.
• Smart shipment validation verifies value and monitors recipient rules (one shipment per day).
• Pre-screening of SKUs prevents restricted items from entering the Section 321 pipeline.
• In-house customs brokerage ensures all documentation (commercial invoices, CBP data) is filed correctly.

This automation significantly reduces the chance of errors or delays, and because SFI owns the entire logistics stack, there are no handoffs between third parties.

What About Entry Type 86?

Section 321 isn’t always the best fit, especially when goods fall under Partner Government Agency (PGA) regulation like the FDA or USDA. That’s where Entry Type 86 comes in.

Comparison: Section 321 vs. Entry Type 86 vs. Formal Entry

Feature	Section 321	Entry Type 86	Formal Entry
Value Limit	$800 USD	$800 USD	No limit
PGA-Regulated Goods	Not allowed	Allowed (FDA, USDA, etc.)	Allowed
Filing Requirement	None	Electronic via ACE	Required
Ideal For	Apparel, electronics, general DTC	Supplements, cosmetics, agri-products	High-value B2B or bulk
Duty-Free	Yes	Sometimes	No (unless under FTA)

At SFI, we help clients mix and match these models to ensure every shipment takes the most cost-effective and compliant route possible.

Fulfillment Timeline Walkthrough: From Order to U.S. Doorstep

One of the biggest misconceptions about cross-border shipping is that it has to be slow or complicated. With the right systems and infrastructure in place, fulfilling U.S. orders from Canada can be simple, just like domestic shipping.

At SFI, our Section 321 fulfillment workflow is built for speed, accuracy, and compliance—powered by automation, near-border warehousing, and an in-house brokerage team that handles everything from end to end.

Here’s a breakdown of what the process looks like:

Stage	What Happens	SFI Advantage
Order Received	An order is placed on your E-commerce store.	SFI integrates with platforms like Shopify, WooCommerce, and others to receive orders in real time.
Inventory Allocation	The system identifies the correct SKUs and warehouse location.	Inventory is stored in SFI’s Canadian facility near the U.S. border for faster turnaround.
Pick & Pack	Items are picked and packed—often within hours.	Fulfillment staff are trained for Section 321-specific packaging and documentation needs.
Automated Compliance Check	The system verifies shipment value, quantity, and destination against Section 321 rules.	Automated alerts flag non-compliant orders before shipping, keeping things running smoothly.
Documentation Prepared	Commercial invoice and CBP data are generated internally.	No need for client involvement—SFI’s brokerage team manages this in-house.
Cross-Border Trucking	Shipments are loaded onto SFI-owned trucks and head to the U.S. border.	Using SFI’s own fleet reduces delays and gives clients full-chain visibility.
Customs Clearance	Shipments clear customs with no duties or taxes (if compliant).	In-house brokerage ensures faster, more accurate customs processing.
Last-Mile Delivery	Parcels are handed off to trusted carriers like FedEx or UPS for final delivery.	Customers receive packages quickly, with tracking support built in.

How Fast Is the Turnaround?

For most orders, the process from “buy” to “border” takes just one business day. Depending on the customer’s U.S. location, delivery is often completed within two to four business days, which is on par with many domestic shipping timelines.

This speed is made possible by SFI’s control over every step of the journey. There are no third-party handoffs, no miscommunications between warehouses and brokers, and no need for clients to fill out customs paperwork manually.

During Peak Seasons or Sales Surges

Section 321 fulfillment through SFI is built to scale. During Black Friday, holiday rushes, or flash sale events:

• Extra warehouse shifts are scheduled in advance
• Shipping schedules are adjusted to stay compliant with volume and recipient limits
• Inventory buffers can be created in U.S. warehouses for orders that don’t qualify for Section 321

This flexibility ensures that even during high-pressure periods, compliance isn’t sacrificed and customers still receive a smooth delivery experience.

Common Mistakes and How to Avoid Them

Section 321 offers clear advantages, but like any customs process, it comes with rules. Missteps—especially when fulfillment is handled through multiple vendors or manual workflows—can lead to penalties, delayed shipments, or rejected entries. At SFI, compliance is baked into every step of the fulfillment process, helping clients avoid these common mistakes without slowing down operations.

Mistake: Exceeding the $800 USD Limit

Why it happens:

Businesses sometimes assume they can split one high-value order into multiple smaller shipments to stay under the de minimis threshold. However, U.S. Customs and Border Protection (CBP) views this as an attempt to circumvent regulations—especially if the items are clearly part of a single transaction.

How SFI prevents it:

• Order values are verified automatically at the fulfillment stage.
• If an order exceeds the threshold, SFI’s system alerts the client and holds the shipment for review or alternate processing.
• Flexible fulfillment scheduling ensures shipments meet compliance without disrupting customer delivery expectations.

Mistake: Sending Multiple Shipments to One Recipient in a Single Day

Why it happens:

In systems without centralized oversight, multiple teams or automated platforms can unintentionally send more than one package to the same customer on the same day—violating the one-shipment-per-day rule under Section 321.

How SFI prevents it:

• SFI’s tracking system monitors daily shipment activity by recipient address.
• If a conflict is detected, the system adjusts the fulfillment schedule automatically.
• All shipments are coordinated through one platform, keeping the shipping calendar fully compliant and visible to the client.

Mistake: Including Prohibited or PGA-Regulated Items

Why it happens:

Certain goods—like cosmetics, dietary supplements, or products regulated by the FDA or USDA—are not eligible under Section 321. Businesses unfamiliar with U.S. import controls may accidentally include them in low-value shipments.

How SFI prevents it:

• A product eligibility review is part of the onboarding process.
• Regulated SKUs are flagged in SFI’s system before they’re picked, packed, or routed for Section 321 clearance.
• These items are either handled through Entry Type 86 workflows or flagged for alternate processing, depending on their classification.

Mistake: Incomplete or Inaccurate Documentation

Why it happens:

Manual entry of product data, HS codes, or consignee details can result in inconsistencies across documentation—something that CBP systems are quick to catch.

How SFI prevents it:

• Data flows directly from the E-commerce platform to SFI’s system, reducing the risk of entry errors.
• SFI’s in-house brokerage team audits all customs paperwork in real time.
• Accurate commercial invoices, harmonized tariff codes, and recipient details are verified before crossing the border.

Built-In Protection from Day One

SFI’s integrated fulfillment model proactively addresses these issues before shipments leave the warehouse. Whether it’s automated flagging, in-house customs oversight, or system-driven compliance scheduling, clients can rely on a smooth, worry-free cross-border operation.

Is Section 321 Right for Your Business?

Section 321 is a great fit for many, but not all, E-commerce operations. Ask yourself:

• Are your average order values typically below $800 USD?
• Do your products avoid PGA regulation?
• Can you warehouse inventory in Canada or Mexico?
• Is fast U.S. delivery a priority for your customers?

If you answered yes to most of the above, Section 321 is likely a strong strategic option.

Fulfillment Models That Maximize ROI

While Section 321 is a powerful cost-saving tool, it’s most effective when used as part of a flexible, multi-tiered fulfillment strategy. SFI works closely with clients to design a logistics approach that balances shipping speed, regulatory compliance, product type, and cost.

Every business is different, and so are its fulfillment needs. Companies can maximize their reach, profitability, and operational efficiency by combining multiple shipping models.

Choosing the Right Fulfillment Mix

Fulfillment Model	Best For	Advantages	Considerations
Section 321 Fulfillment	Low-value DTC orders under $800 USD	No duties/taxes; fast cross-border delivery; simplified customs	One shipment per day limit; product eligibility restrictions
Entry Type 86 Workflow	PGA-regulated goods (e.g., cosmetics, supplements) under $800 USD	Allows import of FDA/USDA-regulated goods without formal entry	Requires ACE e-filing; may still incur duties
Traditional Freight & Brokerage	High-value orders or wholesale shipments	No shipment value limit; supports B2B & large volumes	Requires formal entry; slower processing; higher costs
U.S.-Based Warehousing	Buffer stock for peak seasons or same-day delivery zones	Ultra-fast delivery for key U.S. regions	Higher storage costs; duties incurred upfront

How SFI Helps Clients Layer Fulfillment Models

Rather than choosing just one path, most growing businesses benefit from layering multiple models to suit their evolving needs. SFI’s infrastructure is built to support this hybrid approach:

• Example 1: A DTC beauty brand ships daily consumer orders under Section 321 but uses Entry Type 86 for skincare SKUs flagged by the FDA.
• Example 2: A lifestyle company uses Section 321 for 90% of its U.S. orders but maintains buffer stock in a U.S. warehouse during the holiday season for same-day fulfillment.
• Example 3: A supplement brand splits U.S. distribution—Section 321 for individual buyers and traditional freight for its U.S. retail partners.

All of these strategies are managed through one centralized platform, with unified inventory tracking, automated compliance checks, and coordinated logistics—all under SFI’s control.

The Bottom Line

Using Section 321 in isolation works well for many early-stage businesses. But as operations grow, layering in Entry Type 86 or U.S. warehousing can help optimize costs and improve service levels—especially during peak seasons, product launches, or retail expansion.

We help our clients build for today—and plan for what’s next.

What You Need to Get Started: Quick Checklist

Want to start shipping under Section 321? Here’s what you’ll need:

• Products under $800 retail value per shipment
• No PGA-regulated or restricted goods
• E-commerce integration (Shopify, WooCommerce, etc.)
• Canadian-based inventory (SFI can help here)
• Willingness to adjust shipping strategy slightly to stay compliant

Need help auditing your SKUs or inventory flow? SFI’s trade compliance team can walk you through it.

Final Thoughts: Section 321 Isn’t Just a Loophole—It’s a Long-Term Strategy

Section 321 gives Canadian E-commerce brands a meaningful way to compete in the U.S. market—without needing to invest in American warehouses or overpay on duties. But it only works if executed with care and consistency.

At SFI, Section 321 isn’t just something we support. It’s part of our core offering. We help brands design their entire fulfillment strategy around it—with the infrastructure, technology, and team to make it seamless.

If your U.S. customers expect fast delivery, competitive pricing, and a smooth experience—Section 321 might be the bridge that gets you there.

Frequently Asked Questions

Can I ship multiple orders to the same U.S. customer in a single day?

No. Section 321 is limited to one shipment per day, per recipient. Sending multiple parcels to the same customer on the same day—even from different warehouses or carriers—will violate the rule and may trigger customs scrutiny or additional duties.

What happens if my shipment exceeds the $800 USD threshold?

That shipment no longer qualifies under Section 321 and must be processed through a formal customs entry, which may involve duties, brokerage fees, and longer clearance times.

Can I ship regulated products like supplements or cosmetics under Section 321?

No. Items regulated by agencies such as the FDA or USDA are not permitted under Section 321. These goods require different processing, often through Entry Type 86.

What if I don’t use Shopify? Can I still integrate?

Absolutely. SFI supports integration with a wide range of platforms, including WooCommerce, Magento, BigCommerce, and others. We also offer API and EDI support for custom integrations.

Do I have to file anything with U.S. Customs myself?

No. That’s one of the biggest advantages of working with SFI. We handle all customs documentation and submission through our in-house brokerage. You don’t need to fill out forms or manage CBP filings on your end.

Can I split my inventory between Canada and the U.S.?

Yes—and in fact, many growing businesses do just that. You might use Section 321 fulfillment from Canada for eligible shipments, while maintaining U.S. warehouse inventory for same-day delivery or wholesale distribution.

What kind of shipping speeds can I expect?

Most orders ship from SFI’s Canadian warehouse and clear U.S. customs within one business day. Final delivery to most U.S. destinations is completed within 2–4 business days, depending on the location and carrier.

Is there a minimum volume requirement to use SFI for Section 321?

There’s no hard minimum, but Section 321 fulfillment works best for businesses shipping to the U.S. regularly—especially daily or near-daily orders with values below $800. Our onboarding team can help assess fit based on your volume and growth goals.