Dear Member:
You may have heard about a plan the White House announced yesterday to withdraw from a longstanding adjunct of the United Nations, called the Universal Postal Union(UPU), which governs global postal rates. Below are some highlights and notes on how it could impact your business followed by links to several articles that have appeared over the past day:
- As currently structured, the UPU enables lightweight packages (4.4 lbs. or less) coming from foreign nations, notably China, to be shipped into and across the U.S. at rates cheaper ($1.50) than the USPS charges domestically.
- The industry’s primary beef with the UPU-set international postage rates is that it has allowed Chinese companies to ship small packages to the U.S. at a steeply discounted rate, undercutting American competitors and flooding the market with cheap consumer goods
- A successful resolution will take care of an issue members have with Chinese companies, some of whom are their actual suppliers competing with the U.S. marketers through direct-to-consumer transactions, thereby giving Chinese or other foreign companies an unfair advantage in shipping costs.
- The UPU system operates so that foreign countries shipping goods into the U.S. renunerate the destination postal service for processing and delivery costs via terminal dues, which have been historically set artificially low.
- Many will use freight forwarders as workaround to postal solutions to get product to U.S. but they will no longer have an unfair advantage to US companies.
- Your outbound international shipment prices may go up in the future depending on how this resolves.
- To quote from a statement from the White House press secretary: The President concurs with the Department of State’s recommendation to adopt self-declared rates for terminal dues as soon as practical, and no later than January 1, 2020. The Department of State will also file notice that the United States will withdraw from the UPU. This will begin a one-year withdrawal process, as set forth in the UPU Constitution. During this period, the Department of State will seek to negotiate bilateral and multilateral agreements that resolve the problems discussed in the Presidential Memorandum. If negotiations are successful, the Administration is prepared to rescind the notice of withdrawal and remain in the UPU.
- ACMA supports the Administration‘s actions to address a longstanding issue, but remains cautious that this not ultimately undermine commerce or postal finances.
For further information on the Administration’s intentions, we recommend you review articles (linked) from the following media:
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This update is intended for ACMA members only. Please protect the integrity of your membership and do not share this outside of your company.