U.S. to stay in Universal Postal Union


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U.S. to stay in Universal Postal Union - Freightwaves

Body approves plan to allow USPS to charge higher rates to foreign postal systems

Delegates of the Universal Postal Union (UPU) approved a compromise September 25 to allow the U.S. Postal Service (USPS) to raise international postal rates on July 2020 to 70 percent of what USPS charges to process domestic parcels and mail, a decision that will keep the U.S. in the UPU despite year-long threats to withdraw from the 145-year-old Union by October 17 if global postal pricing wasn’t reformed.

Under the plan, USPS’ terminal dues (UPU lingo for what a destination post charges the origin post for processing, handling and delivery to addresses inside the country), can be raised by 1% a year until it hits a cap of 80% of domestic charges, subject to conditions. Foreign postal systems will set their own rates beginning in 2021 and extending through 2026. However, any 2021 increases cannot be more than 15% above 2020’s rates, and the 2022 rates cannot be 15% higher than the 2021 rates. Non-U.S. posts can move to what is known as a “self-declare” regime at any earlier time if they so choose. The phase-in was designed to minimize any disruption as posts transitioned from the terminal dues formula–which will eventually disappear–to an environment where each post will “declare” its own rate structure.

The scenario that the U.S. would have preferred–where all countries would have abandoned the terminal dues system in favor of “self-declared” pricing by next year (in which they could charge foreign and domestic users the same rates), was rejected by UPU delegates on September 24.