One of the biggest worries for e-Commerce shippers going into the holiday season was the potential departure of the United States on October 17th from the Universal Postal Union agreement governing rates and services for small packages shipped between countries. In short – had the U.S. chose to leave, they would have had to negotiate bilateral rates with every country rather than the union’s agreed-to rate structure.
The President has made no secret that he feels that the rates were non-compensatory and wanted them to be increased.
The agreement reached between the U.S. and the UPU calls for the following:
- There is an increased speed for the phase-in of increased rates for inbound international bulky letters and small packages.
- Beginning July 1, 2020, member countries with inbound letter post volumes in excess of 75,000 tons will be able to opt-in and self declare rates.
- The approach favored and proposed by the U.S. – for all countries to immediately set their own rates – was roundly refused.
A key trade industry group, the International Mailers Advisory Group, said:
IMAG is pleased that the Universal Postal Union (UPU) was able to find a solution to achieve global remuneration reform that allows the United States to remain in the UPU, a 144-year old organization of which the United States was a founding member. By remaining in the UPU, the United States retains its important leadership role in the global postal system. Mailers and shippers will see no interruption in service through the critical holiday season and beyond.
For e-Commerce shippers, this likely will translate into an increase in inbound rates to the United States via the international mail system. However, there is an opportunity for an increase in velocity with the launch of CBP’s Type 86 entry pilot which will allow Kesco to electronically process inbound customs clearances of low-value shipments, speeding the parcels through the mail system to waiting recipients.