Winnipeg transport company maps route through low-cost U.S. parcels loophole

As Manitoba small businesses pause their U.S. sales amid the end of the de minimis exemption, one transporter is trying a new route to move such packages duty-free.

Runnin’ Red Transport shipped at least 500 parcels on Aug. 29 without incurring tariffs, said Trevor Froese, the company’s owner.

Winnipeg-based Runnin’ Red regularly crosses the United States-Canada land border at Emerson with packages sent from Canadian small businesses. Most goods previously fell under the de minimis exemption, which allowed items under US$800 to enter the U.S. duty-free.

U.S. President Donald Trump halted the exemption for most of the world last week. As a result, small businesses across Canada have paused their sales into the southern country amid confusion over tariffs billing. Logistics firms, Canada Post and online platforms like Etsy have scrambled to adjust.

Froese began researching workarounds as the exemption’s end drew near.

“Once I found a couple of different routes, then I was able to get on the phone with U.S customs,” he relayed Tuesday.

He found an answer, Froese said: Runnin’ Red will ship low-cost packages via an informal entry U.S. Customs and Border Protection form.

Parcels that are Canada-United States-Mexico Agreement on trade compliant and are valued at $2,500 or less are sheltered from the substantive tariffs the Trump administration has placed, Froese said.

Runnin’ Red fills out a form, CBP Form 7523, to aid low-cost parcels in passing the border without fee, Froese added.

U.S. Customs and Border Protection did not respond to questions about the process by print deadline.

“It’s pretty big news. A lot of our clients, it pretty much saved their business.”– Trevor Froese, Runnin’ Red Transport’s owner

“It’s pretty big news,” Froese said. “A lot of our clients, it pretty much saved their business.”

Upwards of 30 Canadian businesses use Runnin’ Red to reach their American customers.

The operational change has resulted in more paperwork on Runnin’ Red’s side, Froese said. The company has shifted a couple staff members to meet the task. Day-of shipments into the U.S. are still possible, Froese added.

Runnin’ Red is charging a $25 daily fee for the service.

Meantime, other selling platforms are morphing and starting in response to the de minimis exemption cancellation.

BidRush, an online auction site, launched roughly a half-year early because of the current trade war. It opened in August, and logged its first Winnipeg auction start this week.

“It’s mostly designed for the hyper-local market,” said co-founder Sushee Perumal.

Sellers start and end their own auctions. Perumal is eyeing Canadian resellers, business inventory clear-outs and estate sales. Selling outside of Canada to markets like Europe will be an option, Perumal said.

Lisa Boland pivoted to BidRush as the de minimis exemption was axed. She joins the Manitoba entrepreneurs halting shipments to the U.S.

“It’s been very slow,” Boland said, considering sales at Bitchin’ Kitsch ‘n’ Kitchen, her vintage wares company.

Etsy and eBay have been her main sales platforms. Now, she’s BidRush’s first Winnipeg seller. Her 55 lots will stay posted until Sept. 11.

BidRush is a “great idea,” Boland said, adding she’s hoping for the reinstatement of the de minimis exemption — even at a lower threshold, such as US$200.

Meantime, she’s awaiting the opening of eBay’s international shipping facility in Mississauga, Ont. The company announced it’d unveil a centre in October.

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Adjustments like Runnin’ Red’s and new platforms like BidRush are “definitely encouraging,” said Tyler Slobogian, a senior policy analyst with the Canadian Federation of Independent Business. “It obviously shows how innovative and resilient Canada’s small business community can be.”

However, not all shops are CUSMA compliant. The new options aren’t “a silver bullet” to quell the struggle for all small businesses, Slobogian said.

As of last week, more than 30 countries had suspended some parcel shipments to the U.S. ahead of the new tariff rules.

Nationally, Etsy has stopped issuing Canada Post labels for U.S.-bound packages. Instead, it encouraged sellers to use couriers where they can pre-pay tariffs.

Canada Post has tapped Zonos, an international commerce software company, to collect new duties before items enter Canada Post’s network. In a memo to post offices, Canada Post said many low-cost Canadian imports will face a 35 per cent tariff.

The U.S. Court of Appeals recently found the Trump administration’s use of sweeping tariffs illegal. The tariffs remain in place; the administration has until mid-October to appeal to the U.S. Supreme Court.

— with files from The Canadian Press

gabrielle.piche@winnipegfreepress.com

Gabrielle Piché
Reporter

Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle.

Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.