COUNTDOWN: International Mailers Wait As UPU Vote Nears

If The UPU Does Not Change Terminal Dues, The U.S. Will Withdraw Leaving Mailers Without Access to the Existing Global Postal System

GENEVA, Switzerland — An Extraordinary Congress of the Universal Postal Union will be held September 24-25 in Geneva following a vote of the membership. The meeting regards the Terminal Dues system and United States demands for change.

American mailers will be holding their breath.

If the UPU Congress does not allow for self-declared inbound rates, the United States says it will withdraw from the UPU on October 17, 2019. This will mean U.S. mailers will no longer be able to rely on the integrated, global pricing structure provided by the UPU.

The Extraordinary Congress will meet and vote on one of three options for terminal dues: 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 first option would satisfy the United States’ insistence on being able to set rates for inbound commercial packets — the kind of mail coming from China that is well under domestic postage rates. The third option could be enough, depending on the details.

How the member countries vote is a matter of fevered speculation. Some nations take umbrage at the United States’ ultimatum to an international body that has always worked by consensus.

One international observer is pessimistic that the UPU will allow self-declared rates, saying the odds are 70% of U.S. withdrawl and 30% for it staying.

The recent past supports such pessimism. The US came away empty-handed on the issue at the most recent Congress in Addis Ababa in September 2018. The US, with the support of Brazil, Chile and Argentina, sought to move commercial packets into a parcel service that would not fall under the terminal dues system. The effort failed.

So what happens if the United States withdraws from the UPU?

The USPS told mailers in June that it has a plan.

“USPS is committed to serving its international customers, and is actively working on solutions to minimize disruptions in the event the US withdraws from the UPU,” said Giselle Valera, USPS Executive Director of Continuity of Global Operations in her report.

The report (click here) states:

• Solutions Outside of UPU

USPS intends to keep our major international products and services for export; USPS anticipates some changes to geographic coverage may result from exiting.

• Pricing

Rate changes are likely to follow the current, normal, annual cycle schedule that our customers expect, unless costs increase significantly.

• Postal and Commercial Partnerships

USPS is seeking to establish agreements with foreign posts to continue exchanging mail if the US exits; USPS also intends to use commercial logistics partners for delivery abroad.

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