The international shipping arena is about to undergo a significant transformation that will impact every business shipping products across borders. Starting September 1, 2025, the Universal Postal Union (UPU) will enforce new regulations requiring valid Harmonized System (HS) codes for all commercial international shipments, fundamentally changing how eCommerce businesses approach international shipping compliance.
This HS code mandate represents one of the most substantial changes to cross-border eCommerce shipping in recent years, and the implications extend far beyond simple compliance requirements.
For eCommerce businesses that have grown accustomed to the relatively lenient requirements of domestic shipping, this change signals a new era of precision and accountability in international commerce. The days of vague product descriptions and generic classifications are officially over, replaced by a system that demands accuracy, specificity, and attention to detail.
What Are HS Codes and Why Do They Matter for International Shipping?
Think of your HS code as your product’s key to crossing borders. As Alison Layfield, an international shipping expert, explains it: “Your HS code is like your passport to get that parcel into that country. And an HS code is one of the most critical components of that because it will indicate to customs specifically what that item is.”
An HS code is a standardized numerical classification system used worldwide to categorize traded products. The first six digits of any HS code are universal, recognized and used by customs authorities in every country. However, the classification becomes more specific after those initial six digits, with additional numbers that can extend up to 10 digits depending on the destination country’s particular requirements and regulations.
That’s why you’ll hear different terms for what is essentially the same Harmonized System Code, depending on the context and jurisdiction. For example, the Harmonized Tariff Schedule (HTS) code is used for imports into the United States, while the Schedule B code applies to exports from the United States. Within the European Union, member countries rely on TARIC codes, while many other regions reference their own customs tariff classifications. All of these systems align with the global Harmonized System maintained by the World Customs Organization, ensuring consistency across international trade.
This specificity matters more than many eCommerce shippers realize. Your HS code directly determines how customs officials assess import duties and taxes on your products. It influences whether your shipment moves quickly through customs or gets flagged for additional inspection. Most importantly, an incorrect HS code can result in your customer paying unnecessary duties, experiencing significant shipping delays, or having their package returned entirely. In some cases, misclassification can also eliminate a potential de minimis exemption, pushing your shipment into a higher duty bracket and raising costs for both you and your customer.
The significance of accurate HS codes becomes even more apparent when you consider country-specific trade policies. Take Canada’s current 25% surtax on specific US-origin goods, for example. If your product falls under one of the affected HS code categories and you’ve incorrectly classified it as US-origin when it was actually manufactured elsewhere, your customer could face an unexpected 25% tariff at dollar one with no minimum threshold. As Layfield notes, “If they’re defaulting to US origin and they have commodities that are within that HS code list, they’re going to get hit with 25% surtax at dollar one. So, there’s not even a threshold.”
Why Are HS Code Requirements Changing? The Forces Behind the Mandate
The implementation of mandatory HS codes isn’t happening in a vacuum. This change represents a coordinated global response to several pressing issues that have plagued international shipping for years.
First and foremost, customs authorities worldwide are grappling with increased concerns about tariff avoidance and product misrepresentation. The rise of eCommerce has created an environment where millions of small packages cross borders daily, making it challenging for customs officials to verify the contents and proper classification of each shipment. Vague descriptions like “merchandise,” “gift,” or brand names without specific product details have become red flags for customs authorities who need precise information to assess appropriate duties and taxes.
Additionally, the global trade environment has become increasingly complex, with various countries implementing specific trade policies, tariffs, and restrictions. Accurate HS codes and product descriptions enable customs authorities to properly enforce these policies and ensure that all appropriate duties and taxes are collected.
USPS and UPU Changes: What’s Actually Different After September 1st
The Universal Postal Union serves as the coordinating body for postal operators worldwide, and when the UPU mandates changes, national postal services are required to implement them. The USPS, which has historically been slow to enforce new international shipping requirements, is now being compelled to require HS codes for all international commercial shipments.
However, the USPS approach to this mandate reveals an important nuance. Rather than calling HS codes “mandatory,” the USPS is labeling them as “required.” This distinction exists because the USPS has partnered with Hurricane, a UK-based service provider, to implement a lookup tool that can automatically generate HS codes based on product descriptions when shippers don’t provide them.
This might sound like a safety net, but it comes with significant limitations. As Layfield cautions, “If they don’t have a good description, no lookup tool is going to find an HS code.” Automated lookup tools are only as good as the product descriptions they’re given. If your product description is vague, incomplete, or inaccurate, no lookup tool will be able to generate the correct HS code. This means that shipments with poor descriptions will fail the automated lookup process, leading to package returns and shipping delays.
The European Union has been particularly proactive in this area, with some regions already implementing “stop words” policies that flag shipments using overly generic terms. Words like “merchandise,” “gift,” “clothing,” or even brand names without specific product details are no longer acceptable as complete product descriptions.
The True Cost of HS Code Non-Compliance for eCommerce Businesses
The financial implications of the HS code mandate extend far beyond potential customs duties. When shipments fail to meet the new requirements, the cascading effects can be substantial and far-reaching.
Consider what happens when a package fails the HS code requirement. As Layfield explains, “USPS is going to simply return the parcel to the shipper. It’s not even going to come back to us. So think about how many days that’s going to delay that package.” The returned package must travel back through the postal system, which can take days or even weeks depending on the destination. During this time, your customer is waiting for their order, potentially growing frustrated with each passing day.
Once the package is returned, you’ll need to correct the HS code and product description information, then ship the package again. This means paying for shipping twice, dealing with customer service inquiries, and potentially offering compensation or expedited shipping to maintain customer satisfaction. For businesses operating on thin margins, these costs can quickly add up to significant expenses.
The impact becomes even more severe for businesses shipping to countries with strict customs enforcement. Some destinations may not just return packages with incorrect information; they might hold them indefinitely, assess additional fees, or even confiscate items they cannot properly identify. These scenarios can result in complete loss of both the product and shipping costs.
There’s also the opportunity cost to consider. Every delayed shipment represents a customer experience that falls short of expectations. In the competitive eCommerce landscape, shipping delays can lead to negative reviews, reduced customer loyalty, and lost future sales. The cost of acquiring new customers to replace those lost due to poor shipping experiences often far exceeds the direct costs of the delayed shipments themselves.
Common HS Code Mistakes That Will Cost You After September 1st
Many US-based eCommerce businesses approach international shipping with a domestic mindset, and this perspective creates several problematic assumptions that can lead to costly mistakes under the new HS code requirements.
One of the most common misconceptions involves country of origin declarations. Many businesses assume that because a package is shipping from the United States, the product should be classified as US-origin. However, country of origin refers to where the product was manufactured, not where it’s being shipped from. This distinction is crucial, particularly for shipments to countries like Canada that have specific tariffs on US-manufactured goods.
The problem is compounded by eCommerce platforms and shipping software that default to US origin for packages originating in the United States. Some major platforms have been slow to address this issue despite being made aware of it, meaning that businesses using these systems may unknowingly be subjecting their customers to unnecessary tariffs and duties.
Another significant pitfall involves product description practices that worked fine for domestic shipping but are inadequate for international commerce. Layfield points to a specific example: “I’ll give you an example of generic descriptions for items such as ‘Brand Name dark denim’ that fail to specify ‘jeans,’ which could lead to flagging, as customs require precise identification beyond brand names or general terms.” Brand names alone don’t provide enough information for proper customs classification. These errors don’t just slow down the supply chain; they can trigger tariff code mismatches that result in additional reviews or penalties for commercial goods.
The challenge extends to businesses that have built their operations around the historically lenient requirements of the USPS. For years, the postal service accepted minimal information for international shipments, leading many businesses to develop systems and processes that prioritize speed and convenience over accuracy and completeness. These businesses now find themselves needing to overhaul fundamental aspects of their shipping operations.
International Shipping Compliance: Strategies for HS Code Success
Successfully navigating the new HS code requirements requires a systematic approach that addresses both immediate compliance needs and long-term operational efficiency. The businesses that thrive under these new international shipping requirements will be those that view this change as an opportunity to improve their cross-border shipping operations rather than simply another regulatory burden.
The foundation of compliance success lies in developing comprehensive product data management practices. This means creating detailed product descriptions that go beyond marketing language to include specific technical details that customs authorities need. Instead of “stylish summer dress,” your description should specify “women’s sleeveless cotton sundress with floral print.” The goal is to provide enough detail that a customs official who has never seen your product could accurately understand what it is.
Investing in HS code research and validation tools becomes essential under the new requirements. While automated lookup tools can be helpful, they shouldn’t be your only resource. Understanding the HS codes that apply to your products allows you to catch potential issues before they cause shipping delays. Many businesses find it worthwhile to work with customs brokers or trade compliance specialists to ensure their HS code assignments are accurate.
Country of origin documentation also requires careful attention. This means maintaining records that clearly establish where your products are manufactured, not just where they’re stored or shipped from. For businesses that source products from multiple countries or work with suppliers who may change manufacturing locations, implementing systems to track and verify country of origin becomes crucial.
Regular auditing of your shipping data can help identify potential issues before they result in returned packages or unhappy customers. This includes reviewing product descriptions for clarity and completeness, verifying HS code assignments, and ensuring that country of origin information is accurate and up to date.
How HS Code Changes Will Transform International eCommerce
The HS code mandate represents more than just a new compliance requirement; it signals a fundamental shift toward greater transparency and accountability in international eCommerce. This change is part of a broader trend of governments worldwide implementing stricter controls over cross-border trade to ensure proper tax collection, prevent smuggling, and maintain security.
For eCommerce businesses, this shift requires a more sophisticated approach to international expansion. The days when a successful domestic business could easily extend into international markets with minimal additional planning are coming to an end. As Layfield observes, “A lot of US retailers are so domestically focused, and when they start reaching out and shipping internationally they’re not always thinking about what the requirements are on international shipping.” Success in international eCommerce now requires understanding and complying with complex regulations that vary by destination country.
This increased complexity also creates opportunities for businesses that invest in proper compliance infrastructure. Companies that can consistently ship internationally without delays or customs issues will have a significant competitive advantage over those that struggle with compliance. Customer satisfaction in international shipping increasingly depends on reliability and predictability, both of which are enhanced by proper HS code and customs declaration practices.
The mandate also accelerates the importance of choosing the right shipping partners and service providers. Working with companies that have robust systems for data validation, HS code lookup, and customs compliance can mean the difference between smooth international operations and constant shipping problems.
Your HS Code Compliance Checklist: Preparing for September 1st
With the September 1st implementation date approaching, businesses need to take concrete steps to ensure they’re ready for the new requirements. The most important first step is conducting a comprehensive audit of your current international shipping practices to identify gaps and areas that need improvement.
- Review your product catalog and descriptions with fresh eyes, asking whether each description provides enough detail for accurate HS code assignment. Consider having someone unfamiliar with your products review the descriptions to see if they can clearly understand what each item is. If there’s any ambiguity or vagueness, now is the time to improve those descriptions.
- Evaluate your current systems and processes for assigning HS codes to your products. If you’re relying entirely on automated systems or haven’t updated your HS code assignments in years, invest time in reviewing and validating this information. Consider working with trade compliance professionals to ensure accuracy, particularly for your highest-volume or highest-value products.
- Examine your country of origin data and documentation. Make sure you have clear records of where your products are manufactured and that this information is accurately reflected in your shipping systems. If you work with suppliers in multiple countries or source similar products from different locations, implement processes to track this information accurately.
- Consider the broader implications for your customer service operations. Train your team to handle questions about customs delays, duty assessments, and other international shipping issues that may become more common as enforcement increases. Develop clear policies for handling returned packages and delayed shipments caused by customs issues.
Moving Forward with Confidence
The HS code mandate represents a significant change, but it’s also an opportunity for eCommerce businesses to improve their international shipping operations and customer experiences. By taking a proactive approach to compliance, businesses can turn this regulatory requirement into a competitive advantage.
The key to success lies in viewing HS code compliance not as a one-time fix, but as an ongoing commitment to accuracy and professionalism in international commerce. Businesses that embrace this mindset and invest in proper systems and processes will find themselves better positioned for international growth and success.
Remember that compliance with the new HS code requirements isn’t just about avoiding problems; it’s about creating better experiences for your international customers. Accurate product classifications, clear descriptions, and proper customs declarations all contribute to faster, more reliable shipping that builds customer trust and satisfaction.
As the international eCommerce landscape continues to evolve, the businesses that prioritize HS code compliance and invest in robust international shipping capabilities will be the ones that thrive in the global marketplace.
Frequently Asked Questions About HS Code Requirements
When do the new HS code requirements take effect?
The Universal Postal Union (UPU) HS code mandate takes effect September 1, 2025, for all commercial international shipments processed through postal channels.
Do I need HS codes for all international shipments?
Yes, starting September 1, 2025, valid HS codes will be required for all commercial B2B and B2C international shipments, regardless of value.
What happens if my HS code is incorrect?
Incorrect HS codes can result in customs delays, additional duties and taxes, package returns, or indefinite holds by customs authorities.
Can I use the same HS code for similar products?
HS codes must be specific to each product. Similar items may have different codes based on materials, construction, or intended use.
How do I find the right HS code for my products?
You can use official customs databases, work with customs brokers, or utilize professional HS code lookup services to ensure accuracy.
Will USPS automatically assign HS codes if I don’t provide them?
USPS has a lookup tool, but it only works with detailed, accurate product descriptions. Vague descriptions will cause shipments to be returned.
Do country of origin requirements change with the new HS code mandate?
While not new, accurate country of origin declarations become more critical as customs authorities increase enforcement of trade policies and tariffs.
How specific do product descriptions need to be?
Product descriptions must be detailed enough for customs officials to clearly understand what the item is. Generic terms like “merchandise” or “gift” are no longer acceptable.
