UPU Exit Begins: USPS Urged To Prepare For Pullout

The U.S. Postal Service — the world’s largest postal service — needs to prepare for its exit from the Universal Postal Union now, the Postal Regulatory Commission said in its Annual Compliance Determination released April 12.

The biggest benefit of being a member of the Universal Postal Union is that U.S. relationships with foreign postal services are determined within the world body. By exiting, the U.S. will be forced to negotiate separately with each of the world’s 193 national postal authorities.

“The Commission recommends that the Postal Service, in coordination with the Department of State, negotiate bilateral and multilateral agreements that contain rates for UPU letter post mail that are more compensatory than terminal dues,” the PRC states.

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“The Commission finds that revenue for Inbound Letter Post was not sufficient to cover attributable cost,” the PRC states, recommending the USPS file rates for the Competitive Inbound Small Packets and Bulky Letters product as soon as possible.

The United States gave the required one-year pullout notification to the Universal Postal Union in October 2018 (see story).

The United States wants the right to self declare inbound commercial packet rates. Currently these rates are set through the Terminal Dues system, which effectively give international mailers cheaper postage rates than domestic mailers — a significant problem in the age of ecommerce.

Since then, the UPU has been working on a resolution to the problem (see story).

On April 10, 2019 the UPU announced that member nations will vote on three options: 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.

The UPU will 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.