CONGRESSMEN BLAST POSTAGE SUBSIDIES FOR FOREIGN SHIPPERS

The subsidy of Chinese and other foreign postal shipments into the United States has led to a fiery letter from congressmen, demanding the USPS and State Department explain why Americans are subsidizing Chinese and other foreign business’ postage.

The letter to Secretary of State Rex Tillerson and Postmaster General Megan Brennan blasts the terminal dues system that lets foreign shipper pay pennies on the dollar compared to their American counterparts.

Related: Canada Post Phases Out Chinese Postage Subsidy

“Losses on international inbound letter post items exceeded $134 million in 2016, meaning that American mailers and shippers are not only being charged higher rates than foreign shippers for comparable products and services, they are actually subsidizing many of these deliveries,” the letter states. “Why does the Postal Service charge foreign post offices less for the delivery of inbound international postal shipments than it charges domestic U.S. mailers for similar services?”

Forbes reports on the magnitude of the aituation: “As you browse through the listings on sites like Amazon and eBay it is almost impossible not to be amazed at how cheaply China-based merchants are selling products for: xlr cables for $.99, a necklace for $.78, 10 watch batteries for $.78 — all with postage included.”

The very low postage rates foreign shippers enjoy are the result of the UPU Terminal Dues system, which sets the reimbursement rates for shipments between postal authorities.

The problem is, the United States has not formally approved the UPU mandates which is is now following.

“Are these low rates directed by the Department of State or established voluntarily by the Postal Service? If the Department has directed the Postal Service to adopt these rates, what is its specific legal authority since the U.S. is not a party to the 2012 Convention?” the letter asks. “If the Postal Service has adopted these rates voluntarily, why has it done so?”

The Congressmen question the legality of USPS actions, citing specific laws in Title 39 of the United States Code. “The law also prohibits the Department from concluding any postal agreement that grants the Postal Service or any other person an “undue or unreasonable preference” with respect to any competitive product,” the letter states.

The letter urges the government not approve the 2016 UPU Istanbul Convention and any future UPU meetings over rates should be guided by federal law.

Click to read Congressmen’s letter

Click for Forbes report

Click for Gordon Glazer’s Commentary