UPU To Let Members Vote On Postal Remuneration Rates

Director General of the UPU Bishar A. Hussein

BERNE, Switzerland — April 10, 2019 — Today, the Second Committee (Universal Service Obligation, Regulatory Affairs, and Postal Regulation) of the UPU’s Council of Administration, the body responsible for ensuring the continuity of the UPU’s work between Congresses, reviewed options for revising the present postal remuneration system.

The three options before the committee were as follows: 1) To allow member countries to self-declare postal rates; 2) To accelerate rate increases already approved by the UPU; and 3) A convergence option that also adopts self-declared rates as its basis, but with elements aimed at mitigating undue price impacts.

After discussion, the Second Committee agreed to put all three options forward for voting and will ballot member countries on whether these options will be decided by an Extraordinary Congress to be held on 23-24 September, or by postal ballot.

In a statement issued afterwards, the Director General of the UPU Bishar A. Hussein said, “Today’s decision is the outcome of a wide ranging discussion that began in October last year involving every possible UPU stakeholder, including member countries. Every voice has been heard, and every possible view discussed.”

Mr. Hussein added, “This decision will allow all member countries to vote on this essential matter at either an Extraordinary Congress or a vote by postal ballot. I look forward to working with every member country as we go forward to ensure that we do what is best for the Union, the consumer, and the international postal system.”

Background:

The purpose of the UPU remuneration systems is to compensate the designated operators of destination countries for the cost of handling, transporting and delivering postal items from abroad. Although the relationship between the UPU remuneration systems and postage is indirect, the UPU remuneration rate does constitute a major cost component that needs to be taken into consideration by the sending designated operator when it receives, processes and dispatches a postal item sent to an addressee residing in another country.

Posted earlier today before the UPU announcement:

The Universal Postal Union decision on how to resolve the United States’ threatened departure will be made in the coming weeks, according to industry sources.

A decision from the UPU’s Postal Operations Council and the Council of Administration will settle what goes to the UPU membership for a vote on inter-country compensation for delivering each other’s mail. At the center of the debate is the US notification that it will leave the UPU if reform is not passed to its satisfaction in commercial packets.

Reports from Berne indicate that many postal administrations are not pleased with the United States ultimatum.

There are three proposals being considered for dealing with E-format Mail:

1) The US proposal for self declared rates for e-format Mail (not letter sized or small flats) but primarily commercial packets that have increased through e-commerce. This would let each country set its own rates for commercial packets.

2) A second proposal would accelerate the reforms from the Istanbul UPU Congress that readjusts upwards countries like China in the terminal dues structure. This proposal is a tinkering of the process and not a major overhaul.

3) The third proposal sponsored by France and Japan is less thoroughgoing than the US proposal as it does not give individual countries complete self declared rate power for this type of mail.

The U.S. proposal is rumored to be the least favored.

The UPU will decide the process for accepting or modifying the proposals. It could be done “intersessionally” meaning between sessions of the UPU Congress or a extraordinary Congress could be called as was done in 2018.

An Intersessional Amendment has a higher vote requirement (2/3) while the extraordinary Congress is majority present. The latter however requires a separate vote calling for an extraordinary Congress.

The need for reform in terminal dues to end the exploitation of lower rates by foreign commercial mailers is universally acknowledged. But the US ultimatum is not being well received, sources say.

How the UPU decides to move forward is being closely watched, with the United States leaving the world postal authority within a year a real possibility.

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