Conforming Shipping and the impacts on e-commerce companies

In August 2023, the proposal from the Ministry of Finance and Federal Revenue to create the Conforming Remittance Program was made official. The measure creates a format for charging and supervising purchases made abroad by Brazilians. In the Federal Government's view, the idea is to simplify the collection of import taxes, applying an import tax of 60% on purchases worth more than US$50 and establishing a zero rate on import tax for purchases below this value, as long as they are met. some criteria such as: i) purchases purchased from e-commerce companies certified in the program; ii) buyer as an individual; and iii) with advance payment of ICMS.

As the main benefit, we can mention faster and more economical customs treatment for e-commerce companies that have joined the program, which potentially improves the level of service for buyers/consumers and reduces the costs of logistics operators, since customs treatment More agile would allow a reduction in the total transit time of these imported purchases and would avoid costs related to travel and storage.

To obtain these benefits, online sales platforms must voluntarily seek to join the program. After joining, the platforms are responsible for sending information about purchases before the orders arrive in Brazil, which will be sent to the Post Office or authorized carriers, which register the customs declaration relating to this type of import.

The first company to join the Remessa Compliance program was Shein, a global e-retailer in the fashion sector, who presented in October 2023 the lecture “Strategy for Nationalizing Logistics Operations in E-commerce” at the 29th ILOS International Supply Chain Forum. A question asked at the end of the presentation was exactly about Remessa Conformo and the impacts that this program would bring to the company. According to Julio Manzano, head Shein's logistics team in Brazil, the company's objective is that, by 2026, 85% of its manufacturing to serve the market in Brazil will be nationally produced and that the country will become a major export hub for all of Latin America. To execute this strategy Made in brazil, the company will make more than 750 million reais in investments and will create connections with more than 2 thousand factories to guarantee this production. Furthermore, it is worth noting that Shein's operating model focuses on reducing total costs, which leads, for example, to a fullfilm centralization and extensive use of technology across different operations, including to reduce the need for reverse logistics, which is a critical issue for online fashion retail, as I explored in my previous article (link: https://ilos.com.br/a-logistica-reversa-no-setor-da-moda/) here at ILOS Insights. Based on this vision of low cost and nationalization of production, Shein aims to grow more and more in the national market and depend, less and less, on importing products to meet demand.

Figure 2 – Bruno Pinto (Operations Director) and Julio Manzano (Head of Logistics) from Shein Brasil, in a lecture during the
29th International Supply Chain Forum, promoted by ILOS.

Other important e-commerce companies have already joined the Conform Shipping Program, and the goal is by the end of 2023 for 100% of orders to be declared in accordance with the program's guidelines. What we hope, as consumers and professionals in the sector, is an improvement in the level of service and a reduction in costs throughout the chain, at no cost to customers and retail companies. And may the impacts on the industry as a whole be positive, allowing online retail to continue growing robustly, as we have seen in recent years.

References

Conforming Shipping and the impacts on e-commerce companies

Henry Alvarenga

Accuracy in Planning: Calculating Indicators for Operational Efficiency

Brazilian port movement reaches new record in 2024

Logistics and supply chain in the next 30 years

Rio de Janeiro

São Paulo