NOW

GLAZER: Finally Sanity Over US Postage Subsidies To Foreign Shippers

Gordon Glazer

(Editor’s Note: The letter from Congressmen exposing the extreme postage subsidies enjoyed by foreign shippers is the subject of this commentary from Gordon Glazer of Shipware.)

Finally some sanity out of Washington! This is welcomed news to our industry. There is going to be a reckoning and it is somewhat ironic that the State Department’s own report is the source of this letter from Congress to the Department of State and the PMG.

“U.S, Department of State, dated July 27, 2017, confirms that “[t]he United States has not formally approved the 2012 UPU Convention.” Moreover, it confirms that the United States has not formally approved a UPU Convention since the 2008 Convention, which ceased to be in force on December 31, 2013. It appears, therefore, that as a matter of international law, neither the United States nor the Postal Service is under an obligation to deliver foreign postal shipments at rates that are less that the Postal Service would charge domestic mailers for comparable services.”

I am glad this group of Congressmen have stepped up and exposed this imbalance. In some small way it will help right the wrongs from the 2006 PAEA, the partially failed framework that the USPS is constrained to work within. Thank you for bringing this news into the light, now keep at it and pass meaningful Postal Reform, fix the mistakes. Allow our Postal Service to thrive on a level playing field.

Click for Congressmen’s Letter
Click for Related Story

Related: Canada Post Phases Out Chinese Postage Subsidy

Getting back to this breaking news: Domestic shippers and merchants will be very happy, as this news could well be the spark and legal authority to fundamentally change the UPU, more specifically, how the United States and the rest of the world’s postal systems deal with “Emerging” economies. The system was designed to foster these economically disadvantaged countries. China has emerged as one of the world’s economic leaders and they should not be prospering off the labors of hard working Americans. We all end up paying for this, as the losses are baked into the prices we pay for other USPS services.

I am sure there were many good reasons why this policy is in place, I’m sure our State Department received some quid pro quo out of it. A bigger question is why the USPS, Office of Inspector General, did not get to the bottom of this earlier, or maybe they did?

This is the stuff of spy novels and intrigue. We as a nation should stand and fight for a level playing field for Americans merchants. Besides, China can stand shoulder to shoulder with us without this subsidy. However, it is going to hurt some folks that are addicted to the insanely cheap supply chain from China to their mailbox (yeah, me included).

So who is going to benefit most from this change?

Employment via all the players in our domestic supply chain will. The USPS stands to benefit the most, in one form or another. The Private Carriers (UPS & FedEx) will also benefit with both small parcel and large shipments via their Trade Networks. For small parcel, the biggest opportunity will be consolidating and inducting deep into the USPS network for the final mile. (These low profit packages are inducted under the Parcel Select (PS) and Parcel Select Lightweight (PSL) class.) Other Parcel Consolidators like DHL eCommerce, OMS, and Newgistics along with the Regional Carriers will also feed on this new volume.

This massive volume is already being delivered by the USPS, how it gets to them, how much they earn, and where it is inducted will change. Note:The USPS collectively accounted for 62%*of all residential deliveries according to a 2016 Stifel Study.

3PL fulfillment operations will become the next logical best bet for eager Chinese merchants to keep their products competitive, and these firms will fight tooth and nail to get the best carrier programs in place to remain competitive. Fulfillment by Amazon (FBA) is sure to grow because of this. Amazon’s enormous capacity and network will remain tough to compete against forcing competing marketplaces and shippers to get creative. Alternatively some 3PLs may set up shop overseas and prepare these small shipments in bulk and drop ship directly via local 3PLs for ultimate USPS induction. Finally, I think I am going to get a whole lot busier. Wishing you great shipping success.

Gordon Glazer, CMDSM, CMDSS, MDP, MDC is a Senior Consultant, USPS Specialist at Shipware LLC, an innovative parcel audit and consulting firm that helps volume parcel shippers reduce shipping costs 10%-30%. Gordon is a postal industry veteran with 31 years’ experience and is a sought-after speaker and industry thought leader. He welcomes your questions and comments, and can be reached at 858-724-0457 or gordon@shipware.com.

LATEST NEWS

  • This holiday season, we know that identity thieves will be targeting not just our inboxes, but our mailboxes,” said District Attorney Vance. “So, we’re putting scammers on notice: the Manhattan D.A.’s Office has the expertise, resources, and partnerships in cybercrime and identity theft to find you and hold you accountable. We will continue to work hand-in-hand with the U.S. Postal Inspection Service and the NYPD to stamp out fraud and protect the integrity of a service relied upon by millions of New Yorkers." [...]
  • The U.S. Postal Service pursued a project to build and secretly test a blockchain-based mobile phone voting system before the 2020 election, experimenting with a technology that the government’s own cybersecurity agency says can’t be trusted to securely handle ballots. [...]
  • The United States Postal Service reported new service delivery performance metrics showing stable service performance for First-Class Mail, Marketing Mail and Periodicals through the first nine weeks of the fiscal first quarter. [...]
  • The United States Postal Service hereby gives notice of delayed implementation of the classification changes for the new Nonstandard Fees and Dimension Noncompliance Fee. Specifically, the Postal Service will delay implementation of those fees until April 3, 2022. [...]
  • Take advantage of USPS's Electronic Verification System (eVS) with Eii's Postal Steward eVS Solution. This is a fully integrated system for creating and submitting eVS mailings to the USPS's PostalOne! for greater ease of control over paying for and documenting your high-volume mailings. [...]
  • Imagine the customer’s plight at having to type it on your order form! Thankfully most city and street names have fewer characters but the spellings can still be quite confusing. Making a spelling mistake when entering addresses is not just frustrating for customers who may get their orders late but also bad for your database. [...]
  • Alliance Rubber offers more than just rubber bands. Its Mailing/Storage Tubes are designed for anything that can be rolled in a commercial grade .050" wall thickness [...]
  • The USPS released Important information about upcoming January 2022 Release changes … (click to [...]
  • The Postal Regulatory Commission announced today that Michael M. Kubayanda has returned to the agency as chairman. After being re-nominated by President Joseph R. Biden and unanimously confirmed by the U.S. Senate, Chairman Kubayanda was sworn back into office today, December 9, 2021, to serve a term through November 22, 2026. [...]
  • Supply chain disruptions, transportation network challenges and various reasons for downtime at mills added stress to the already limited paper market. Coated freesheet inventories were low to begin with and haven’t been able to keep up with further shortages caused by plants going offline. [...]
  • From CNBC: Dave Clark, Amazon’s CEO of worldwide consumer, told CNBC on Monday that the company is on track to become the nation’s largest delivery service by the end of [...]
  • From Detroit News: An Amazon Web Services outage is wreaking havoc on the e-commerce giant’s delivery operation, preventing drivers from getting routes or packages and [...]
  • MAILCOM returns from its COVID hiatus with the MAILCOM 2022 Annual Spring Convention, March 28-30 at the Tropicana in Atlantic City. Updates and registration information can [...]
  • Polaris Direct has installed a second Truepress Jet520ZZ and two Bowe Systec Fusion Cross inserters to handle the growing demand for Roll-Fed Digital Inkjet technology. Pictured is the Polaris Direct team with the new Truepress. [...]
  • BlueCrest, the former Pitney Bowes DMT, has acquired Fluence Automation, formerly the sortation business of Bell and Howell. Fluence will become part of BlueCrest, and in the short-term will be referred to as Fluence Automation, A BlueCrest Company. [...]