EU €3 duty pushes US e-commerce sellers towards DDP

The EU ended the duty exemption for low-value imports worth €150 on July 1, 2026, replacing it with a €3 duty. The measure has already added pressure to a business model built around large volumes of inexpensive cross-border parcels. For ePost Global, however, the first 45 days have not brought a decline in overall volumes.

ePost Global is a US-focused international shipping services provider that uses a multi-carrier network to handle mail and parcel shipments worldwide, delivering more than 20 million items annually to 200+ countries and territories through 100+ carrier partnerships.

Alison Layfield, Vice President of Product Development at ePost Global, said the company continues to see demand from US merchants selling into Europe. “It is still early, only around 45 days in, but so far we are not seeing any significant negative impact on volume,” she said.

While the company has been in business for more than 25 years, Layfield has been there for 17 years. ePost’s primary customer base is US businesses selling internationally, with Canada, the UK and the EU among its important markets. The EU is therefore a significant destination market for the US merchants it serves, although Canada is its largest market. ePost routes all its EU-bound shipments through Amsterdam Schiphol Airport in the Netherlands, where it clears customs before handing them to partner carriers for distribution across the bloc.

“We already have customers that have either switched to DDP or are working on making that change, and we are hearing more about it as merchants see shipments being returned. So we do expect to see an even bigger shift from DDU to DDP.”
Alison Layfield, ePost Global

The pain of DDU and the shift to DDP
While volumes have held up, the experience of shipments moving under DDU terms is becoming more difficult. Under DDU, the consumer is responsible for paying applicable charges upon arrival, creating a potential point of friction that did not exist when low-value imports were duty-free.

ePost Global is hearing of shipments being returned. “What is not yet clear is whether those returns are because postal operators are unable to deliver the shipments, or because consumers are refusing them because they do not want to pay the additional fees.”

“We work closely with the United States Postal Service, and they are looking at analysing what has been returned from the EU. We are hoping to get more information on that,” she added.

The immediate impact may be less about slowing sales and more about whether merchants can collect the new charges without disrupting deliveries. “What we expect is a shift from DDU to DDP,” Layfield said. “More of the accounts currently using DDU are likely to move to DDP.”

The distinction is increasingly consequential for the consumer. DDP allows the merchant to account for the applicable charges during the transaction, rather than leaving the consumer to deal with them at delivery.

“We already have customers that have either switched to DDP or are working on making that change, and we are hearing more about it as merchants see shipments being returned. So we do expect to see an even bigger shift from DDU to DDP.”

HS6 grouping cuts the duty cost
The duty is not simply adding another cost to the e-commerce transaction. How shipments are declared can determine how that cost accumulates, making customs data and shipment architecture increasingly important.

Layfield said ePost Global can group identical items with the same HS6 (Harmonized System) classification, so multiple qualifying items can be treated together, avoiding a separate €3 charge for each line. “For example, if a shipment contains three identical items, those items may have the same HS code but appear on separate lines. If the service provider cannot group those items, the €3 duty can apply to each line.”

That capability creates a growing distinction between postal and commercial routing options. According to Layfield, direct postal routing does not currently offer the same ability to group items, which can result in higher charges when identical products appear as separate declaration lines.

For merchants, the implication goes beyond choosing a delivery service. They increasingly need logistics providers that can combine customs expertise with the technology required to interpret and structure product-level data.

Data accuracy matters more
The EU's broader customs changes are also increasing the importance of accurate product information. Layfield said ePost Global has been educating customers about the need to provide the right manufacturer, merchant and product identifiers as customs requirements evolve.

The company continues to provide item-level information to customs, even when it groups products for duty calculation. “The grouping happens behind the scenes in our programme,” Layfield said. “But that does not mean we are removing the item-level information from the customs declaration.”

That distinction is significant for the industry's concerns around whether HS6 grouping could be viewed as a loophole. Layfield said customs is aware of the practice and that it is currently permitted. “The EU's goal here is to introduce all of the changes with the EU customs reform in 2028,” she said. “For now, HS6 grouping is allowed.”

Handling fee could intensify the DDU problem
The next pressure point could come by 1 November 2026, when the EU is due to introduce a new Union handling fee on low-value consignments sold through distance selling, intended to cover the costs of customs processing and monitoring; the fee will be separate from the €3 customs duty. The exact amount has not been officially confirmed, although industry expectations have centred around €2.

Layfield said that if the fee were €2, it would stack on top of the existing €3 duty. Because the handling fee would follow the same HS6 grouping principle, the cost difference between grouped and ungrouped shipments could become even more pronounced.

“If someone is saying, ‘I don't want to switch to DDP,’ and they're not taking into consideration that grouping, come November 1, it's going to have a huge impact on their customers,” Layfield said. “Now you're looking at €5, and if those two items are line-itemed, that's €10 for that consumer, as opposed to €5.”

Postal operators face challenges
The interaction between the new duty and the EU's existing Import One-Stop Shop (IOSS) framework is creating another complication for postal operators.

Layfield said IOSS already allows VAT to be collected and remitted upfront, while the new duty may still need to be collected from the consumer. This effectively creates two different payment mechanisms within the same shipment. “You're mixing a DDP service with a DDU service,” Layfield said. “It really became a challenge for the postal operators to be able to handle the collection of that duty.”

That challenge is already affecting individual national postal networks. Layfield pointed to Denmark and Germany as examples of markets moving away from accepting DDU shipments, with other postal operators expected to follow.

Netherlands as ePost Global's EU gateway
For ePost Global, the changing rules have not prompted an immediate overhaul of its European entry strategy. The company currently consolidates shipments in the Netherlands, clears them through customs, and then hands them over to partner carriers for distribution across the EU.

Layfield said the Netherlands remains attractive because the company's existing relationships with customs brokers and carriers make the process efficient. “Once the shipments clear customs, they are in free circulation,” she said. “Our partner carriers then take them into their networks and deliver them throughout the EU.”

The model relies on ePost Global's broader partner network, which includes more than 100 carriers worldwide. Once shipments have cleared in the Netherlands, partner carriers collect them and move them through their respective networks.

DDP offers a cleaner customer experience
While the customs mechanics are complex, Layfield sees the biggest practical change in the relationship between merchants and consumers.

Under DDU, the consumer only discovers the additional cost upon delivery. Under DDP, the merchant incorporates the applicable charges into the transaction and takes responsibility for the customs process. “For the customer experience, we believe it will be much better if small and medium-sized companies make the shift from DDU to DDP,” Layfield said. “The consumer has no surprises because everything is paid at checkout.”

That could make DDP less of a premium logistics option and more of a basic requirement for merchants that want to maintain predictable delivery and pricing.

EU warehousing is not yet a major response
Despite the additional cost of moving low-value goods across EU borders, ePost Global is not seeing a significant rush among its US customers to relocate fulfilment operations within Europe.

Only a handful of customers have discussed the possibility, according to Layfield. The strategy appears more visible among some China-linked sellers of lower-value goods, but has not yet become a major response among the US merchants that make up ePost Global's core customer base.

The temporary nature of the current €3 regime is also influencing that decision. With a broader EU customs overhaul expected in 2028, investing heavily in European fulfilment purely to avoid today's regime could prove difficult to justify. “I think it would be a short-lived solution for companies,” Layfield said. “It would be a big cost impact to move an entire operation into the EU.”

For logistics providers, the immediate response to the EU duty is therefore less about building entirely new networks and more about strengthening the technology, customs and carrier infrastructure behind existing ones.