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US to leave global postal union October 17 unless free to set own rates

THE US Postal Service (USPS) will leave the Universal Postal Union (UPU) on October 17, ending 144 years of American involvement in the international body that governs the exchange of mail unless its proposal to set rates unilaterally is accepted

US to leave global postal union October 17 unless free to set own rates

THE US Postal Service (USPS) will leave the Universal Postal Union (UPU) on October 17, ending 144 years of American involvement in the international body that governs the exchange of mail unless its proposal to set rates unilaterally is accepted

10 September 2019 - 19:00

THE US Postal Service (USPS) will leave the Universal Postal Union (UPU) on October 17, ending 144 years of American involvement in the international body that governs the exchange of mail unless its proposal to set rates unilaterally is accepted.

Members of the 192-member United Nations body will gather on September 25 and 26 in Geneva, Switzerland in only the third 'extraordinary Congress' in UPU history. The key agenda item will be to vote on what the UPU is calling the 'possible revision of small packet remuneration rates,' which is the core issue to determine the future of US involvement.



The US State Department, which is the lead negotiator for the United States in the UPU, has submitted a proposal that would allow the US to 'self-declare' international postage pricing and to decide on subsidy levels, if any.



Unless the UPU agrees to the proposal by a September 30 deadline, the US will leave the Union 17 days later and, over time, begin a framework of bilateral negotiations with individual postal authorities. The self-declare regime would begin in 2020.



The practical effect of the exit of the US would be a rate increase of at least 300 per cent on postal parcel traffic to the US from heavy net exporting countries as rates kept artificially low for decades begin to normalise, according to Matthew White, a strategist for iDrive Logistics, a consultancy working with customers to prepare contingency plans for the exit.



US-based international shippers will also pay more, at least over the short-term, because USPS will cancel negotiated service agreements (NSA) covering international shipments if the withdrawal takes place, Mr White said.



Private sector parcel carriers may see a big increase in business due to new-found pricing competitiveness, while high-volume traffic may migrate to cheaper ocean shipping services because of the large price increases, he said.


WORLD SHIPPING

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