U.S. and Universal Postal Union reach agreement for mail parcel shipping rates

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.

Kesco Customs Solutions offering electronic informal de minimis clearances for e-Commerce sellers

Shipments valued at $800 or less are considered de minimis and were previously released one of two ways. First, was on the manifest and this how express couriers with small, low value packages release and keep them moving through their system. The second was for customs brokers to present an entry to Customs in the port where the cargo has arrived through a manual process, delaying what is supposed to be an expeditious move through courier or mail.

CBP has now provided ways for customs brokers like Kesco Customs Solutions to file an electronic entry for these low-value e-Commerce shipments, keeping them moving without delay and ensuring committed delivery times remain on schedule for on-line retailers and sellers.

The “type 86” entry works like any other entry that we would file – except it contains the data elements required to release this low value shipment which differ somewhat from a regular formal or informal entry type that requires HTS numbers, manufacturer ID’s and Participating Government Agency (PGA) information.

Per the Federal Register notice, the required elements are:

An entry type ‘‘86’’ requires the owner, purchaser, or customs broker

(1) The bill of lading or the air waybill number;

(2) Entry number;
(3) Planned port of entry;
(4) Shipper name, address, and country

(5) Consignee name and address;
(6) Country of origin;
(7) Quantity;
(8) Fair retail value in the country of shipment
(9) 10-digit HTSUS number;

(10) IOR number of the owner purchaser, or broker when designated by a consignee (conditional) upon whether or not there is PGA data to be submitted.

Kesco Customs Solutions is proud to announce that our software provider has put into production the required software changes for us to file Type 86 entries on behalf of importers. For more information, contact Kesco Customs Solutions today.