US e-commerce importers set for big price hikes on parcels from China
With the country expected to leave the UPU in October, USPS has declined to comment on reports of potential fourfold inbound price rises from ‘developing’ countries.
With the US expected to leave the Universal Postal Union (UPU) in September, the US Postal Service (USPS) has declined to comment on reports that it has written to shippers warning them that they will no longer be eligible for discounted rates if the US leaves the UPU, nor on forecasts of possible hikes of up to 300%.
Last October, the Trump administration announced the US would leave the world postal system after a 12-month period of notice, in protest against cheap delivery rates for imported parcels, especially from China, that put American domestic shippers at a competitive disadvantage. However, it left the door open for the US to remain in the UPU if acceptable new terms enabling USPS to set higher rates could be negotiated.
The UPU, whose activities are underpinned by a treaty that sets shipping rates from country to country, will hold an Extraordinary Congress in Geneva on September 24-25 to decide how to reform the terminal dues payment system for cross-border postal deliveries, just weeks before the US could quit the organisation.
Industry news website Supply Chain Dive said USPS had sent notices to organizations with negotiated service agreements (NSA) with the postal operator, warning that the international rates in their contracts may be null after 30 September this year.
The move is expected to lead to significant price rises for international parcels from several countries that have been classed as ‘developing’ countries under UPU rules, including China, with one analyst estimating that it would lead to a rate hike of at least 300% on postal parcel traffic to the US from those countries.
A USPS spokesperson said: “The Postal Service fully supports the objectives of the Administration to secure a more balanced and fair remuneration system for small packets containing goods. The Postal Service is working closely with the State Department, the Postal Regulatory Commission and other stakeholders to implement self-declared rates.”
It noted that while the US is preparing to leave the UPU in October, if a solution can be found that eliminates the economic distortion caused by the current terminal dues system on US businesses, then the United States will continue its participation in the UPU.
“Because the US may no longer be a member of the UPU by mid-October 2019, the Postal Service is undertaking parallel efforts to ensure the continued exchange of international mail items even if the negotiations to remain in the UPU are unsuccessful. No matter the outcome with the UPU, the Postal Service is committed to remaining in the international mailing business,” it concluded.
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