Courier firms drop rates after court verdict
The Island’s shipping and courier companies wasted no time informing customers they no longer have to pay the higher 25 percent duty rate for imported goods after Mailboxes Unlimited’s Supreme Court victory.Customs officials yesterday confirmed the lower rates of duty that Mailboxes can go back to charging as a result of the judgment now “apply to all freight forwarders that bring in goods”, said Bermuda Forwarders vice president of international operations Willie Forbes.That would include his company, and other importer/shipper/couriers such as BEST, Sea Venture, Paget Freight, FedEx and DHL, who all now stand to benefit from Mailboxes owner Steve Thomson’s decision to take Government to court over the rate hike. Mr Thomson alone led a lengthy campaign against the rate hike, which included a petition signed by thousands calling on Premier Paula Cox not to raise duty on personal imports.Competitor ZipX told customers in an e-mail yesterday: “Due to the recent court judgment regarding the 25 percent duty rate implemented on personal use shipments, the rates of duty for your shipments will go back to as they were before this legislation was implemented. Please be advised that effective [today] August 24, 20112, all shipments cleared through Customs will be processed at the applicable duty rates used before the flat rate of 25 percent was put into effect, ie clothing 6.5 percent, camera equipment 8.5 percent, etc.“ZipX has already implemented the changes needed to our processing system to ensure that your shipments will not be delayed in clearing Customs.”Mailboxes also e-mailed its customers, proclaiming that “all US Express shipments will revert to the previous duty rates enjoyed by our customers over the last 15 years ie clothing 6.5 percent, shoes ten percent, supplements 15 percent. This is good news.”Mr Thomson said: “Additionally, we remain significantly less expensive than our competitors on shipping rates and plan on maintaining that competitive advantage.”For example, he said, a US to Bermuda 1lb shipment with US Express is $17, compared to a 1lb shipment by FedEx at $86.90 and a 1lb shipment by ZipX at $22.95.The Mailboxes boss added: “We continue to work with Customs and DHL (our courier) to find a more efficient way to clear our goods as delays in the system and process have been significant in recent months. We are working each and every day to solve this issue and are confident that a resolution will be found shortly.”In a judgment handed down Wednesday, Chief Justice Ian Kawaley ruled Mailboxes was a business and thus was entitled to so-called business end-use relief under the new law.In an effort to “harmonise” duty rates, Government’s new legislation had raised duty to a flat 25 percent rate for all imported goods for personal use while goods imported for business use remained subject to generally lower duty rates.Mailboxes provides a US address for customers buying online for personal or business use, consolidates their purchases and has a courier ship them in to its Bermuda offices.The Collector of Customs contended Mailboxes was merely a shipper, not a business or importer, thus did not qualify for “business end-use relief”.But the Chief Justice ruled “the interpretation contended for by the Crown would not just deprive the applicant [Mailboxes] of business end-use relief. It would potentially deprive a wide array of businesses which the Customs Department itself has previously suggested are intended to benefit from [Customs Procedure Code] 4000 from entitlement to relief, impacting on their tax burden in a significant way during a period of economic recession”.