Trump Announces USA Withdrawal from the UPU Postal Treaty

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memphre
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Trump Announces USA Withdrawal from the UPU Postal Treaty

Post by memphre »

Hi

In another of his inimitable broadsides to China, President Trump has announced that due to terribly unfair terminal dues established by the treaty that subsidies Chinese producers and distributors for selling their wares to the US, he is giving formal notice of withdrawal that will be effective in one year, though the US might establish their own terminal dues as early as in 6 month time.

Full story on Politico.com: https://www.politico.com/story/2018/10/17/trump-withdraws-from-postal-treaty-910675

A new Trump-directed drama is expected to premiere this afternoon as usual.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by mozzerb »

OK, when I saw this thread title I assumed it was from the Onion or something.

I should have remembered Trump's Razor: the stupidest explanation consistent with the available facts is likely correct.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by satsuma »

mozzerb wrote:
I should have remembered Trump's Razor: the stupidest explanation consistent with the available facts is likely correct.
I think you are being generous with your definition.

When were facts allowed to intrude into the Trump decision making process?

It's all about his self-proclaimed intuitive grasp of US business imperatives, seen through a lens of self interest.

A fact is something not open to personal or party interpretation. Like the earth orbits the sun, not vice versa.

Maybe that's Trump's problem. He is best suited to be a Borgia Pope but was born many centuries too late.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by cursus »

The main difference between Trump and the Borgia Popes, is that the later were intelligent (although ruthless) rulers.
Anyway, Trump is there because US people voted him... And I'll let it here...
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by GlenStephens »

So lets, see this system has worked for 100+ years via 10,000s of leaders in 200 countries and then one Moron bumbles along and ...................
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Re: Trump Announces USA Withdrawal from UPU Treaty

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by OldDuffer1 »

That's all very well criticizing Trump about this (and I am no fan!) but I understand that Chinese producers do get subsidized postage which allows them to send items from Hong Kong etc. for minimal or zero postage cost (just look at eBay!). Probably the UPU is a body which doesn't change its rules very quickly!

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by maszki »

Several posters have allowed their anti-Trump hysteria to blind them to reality. A quick read of the linked article indicates...well, at least to me..that this 'terminal dues' issue was, is and will continue to be a real problem and as well as the USA has attracted attention in Australia, New Zealand and 'some northern European countries'.

In the past, I have received commercial mail from Australian companies posted from Singapore so I assume that Singapore has a cheaper postal rate than Australia.

Perhaps it really is time for the treaty to be revisited. The most recent UPU Congress meeting kicked the can down the road to the 2020 meeting. Meantime the USPS continues to lose money although how much of that is due to losses from the current 'dues' process isn't really clear.

This isn't 'new' as this article indicates https://savethepostoffice.com/the-upus-extraordinary-congress-much-ado-about-terminal-dues/ from which comes "A couple of weeks before the Congress convened, the Trump administration — apparently in response to long-standing complaints from online merchants, the U.S. Chamber of Commerce, and private carriers — issued a Presidential Memorandum directing the U.S. delegation to the Congress to “make clear that UPU rates of postal reimbursement are unfair to United States merchants, mailers, and businesses.”

The Memo also said that “the United States will consider taking any appropriate actions to ensure that rates for the delivery of inbound foreign packages” satisfy various criteria, including covering delivery costs. What those actions might be went unstated in the Memo, but it seemed clear that the U.S. was threatening to defy the UPU and adopt its own inbound rates."

Another issue where Trump has delivered on a promise.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by aethelwulf »

maszki wrote:In the past, I have received commercial mail from Australian companies posted from Singapore so I assume that Singapore has a cheaper postal rate than Australia.
I get auction catalogues all the time mailed from a different country than the firm involved...UK catalogues from Belgium; French catalogues from Sweden.

I remember it mentioned on the Board before that in the past, there was an Aussie auctioneer who would airfreight a load of catalogues to Nauru, and post them from there, as Nauruan postage was available on the market so far below face.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Lakatoi 4 »

maszki wrote:Meantime the USPS continues to lose money although how much of that is due to losses from the current 'dues' process isn't really clear.
The USPS continues to lose money (as all postal administrations currently do), primarily because of the massive decrease in mail being sent.

They make up a bit of that loss on packages and other articles going through the system, but not nearly enough to stem the flow of money out the back door.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by gavin-h »

OldDuffer1 wrote:...I understand that Chinese producers do get subsidized postage which allows them to send items from Hong Kong etc. for minimal or zero postage cost (just look at eBay!).
Very true!

Mrs-H just ordered these from Amazon for crafting:

https://www.amazon.co.uk/gp/product/B00X9MDFNA/ref=oh_aui_detailpage_o02_s00?ie=UTF8&psc=1

"10 x 7cm Polystyrene Ball Sphere Ornament Decoration White"

46 pence INCLUDING DELIVERY FROM CHINA :shock: :shock: :shock: :shock:

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by GlenStephens »

Lakatoi 4 wrote:
maszki wrote:Meantime the USPS continues to lose money although how much of that is due to losses from the current 'dues' process isn't really clear.
The USPS continues to lose money (as all postal administrations currently do), primarily because of the massive decrease in mail being sent.

They make up a bit of that loss on packages and other articles going through the system, but not nearly enough to stem the flow of money out the back door.
As has been reported many times here the USPS does rather well - it 'loses' money due to the strange pension law provisions it, and only it in the USA, needs to adhere to, costing it BILLIONS annually of cash flow.

https://www.govexec.com/management/2017/09/usps-defaults-bil ... ef/141404/

https://www.bloomberg.com/view/articles/2018-04-04/congress- ... al-service

"The Postal Accountability and Enhancement Act of 2006 (PAEA), which some have taken to calling "the most insane law" ever passed by Congress. The law requires the Postal Service, which receives no taxpayer subsidies, to prefund its retirees' health benefits up to the year 2056. This is a $5 billion per year cost; it is a requirement that no other entity, private or public, has to make. If that doesn't meet the definition of insanity, I don't know what does. Without this obligation, the Post Office actually turns a profit." Bloomberg, 2018.

Take those out of the mix and it does not do badly at all - it trades in profit. Congress is to blame for their financial mess, not China, not amazon, or falling letter volume!

The very CHEAPEST way for any American to mail a small box of goods of a few kilos here, is about $US90 = $A125. USPS has around the most expensive overseas parcel costs on the planet.

Trump hates the USPS as Amazon gets a cheap deal from them. Trump hates Amazon as its owner Jeff Bezos, the world's richest man, owns the 'Washington Post', a clear leader in exposing this cretin's endless failings. Anything Trump can do to hurt Bezos financially he does. All fact, as a quick google will confirm.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by faro »

GlenStephens wrote:The very CHEAPEST way for any American to mail a small box of goods of a few kilos here, is about $US90 = $A125. USPS has around the most expensive overseas parcel costs on the planet.
(OT) If I'm reading the correct line, ISAL Airmail M-Bags should still be available at US$3.23 per pound to Oz (group 9, with a minimum charge rate of 11 pounds = US$35.53).
Gone are the days, though, of surface M-bag shipping at around a dollar a pound.
=> https://pe.usps.com/text/imm/immc2_039.htm / https://pe.usps.com/text/dmm300/Notice123.htm#_c407

Finding staff who know the system and are willing to go out of their way to assist is another matter, as is the question of putting anything of value in those.
I used to use the old surface M-bags for large volumes of books from the US all the time; multiple bags weighing 66 pounds each which drove the Royal Mail up the wall at this end. :)

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Uppercanadian »

It is difficult for me to admit this, but I agree with Trump. China has the lowest level of Terminal Fees available, at least when I had access to those numbers a few years back, and I do not think they have changed since. Every annual conference, the UPU votes to look at it again in another year.

As per the UPU - "Not all countries are at the same stage of development and there are significant variations in their mail volumes, postal tariffs and cost absorption. The aim is thus to progressively incorporate the developing and least developed countries into a target system that already applies to industrialized countries."

Now that makes sense if we are talking about Mali, or perhaps Myanmar. But does anyone really think that PR China suffers from lack of development? They should be paying the same Terminal Fees as the USA, Canada, UK, Netherlands, Australia, New Zealand etc. And they are doing it by rallying the voters of many of the Asian and African countries to support them at the Conferences.

In this case, Trump is also giving his notice, but seems open to remaining if there is a fair deal. I would be pushing our politicians to support the USA on this. China has had a free ride for a long time.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by amfhf1 »

The terminal rates are lower for third world developing countries.

So some countries mail hit the US postal system and the cost is then picked up by USPS.

I read that China costs hundreds of millions to the USPS

China does not pay the full amount so the US wants them treated as a non-third world country.

UPU has been addressing this very slowly.

This is what I read today if its true makes some sense to me.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by stampchris »

I think the UPU is acting like most government organisations - it plans to act, but will do so very slowly, and while I don't agree with Trump for the most part, this may actually lead to the UPU changing the rules sooner.

Applying decades old rules does advantage some countries, but some of those countries now have the advantage of economies of scale as well. China can set its rates cheaply as (i) internal labour costs are still relatively low, (ii) they can negotiate cheaper international transport due to the shear volume of mail being sent, and (iii) when the package arrives in the USA (or elsewhere) it is up to that country's post office to deliver the parcel and to pay the labour costs.

The terminal fees were designed to deal with some of these issues, but the UPU is slow to change these as a country's economic situation changes.

However, there are possible unexpected repercussions from this. Withdrawing from the UPU might result in China implementing US only postal rates which are significantly higher, which will be passed onto consumers. China Post might also simply refuse to deliver mail to the US, though this is unlikely. There's also the lose of registration and tracking services (such as EMS) which are handled by the UPU.

Perhaps those members who live(d) in South Africa can advise us on how postal services operated during the Apartheid period as South Africa was not part of the UPU.
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Post by DannyS »

Last week Donald Trump threatened to pull the US out of the Universal Postal Union. The complaint in America is that the rules favour third world countries to the detriment of developed countries.

Specifically the complaint is about the small packet rate, (parcels under 2 kilograms). They (various critics in the US) say that sellers in China can post goods to America at such a low rate that it costs the USPS more to deliver it than the cost of postage. Internet sales have made the problem worse.

I am in Thailand and for many years we have sold books published here to readers in the rest of the world. We use the small packet rate which is interchangeable with the printer matter - book rate, although the latter does allow parcels up to 5 kilograms.

If the book rate goes out of the door with the small packet rate because of pressure from the US it will make life very difficult for us because even with these lower postage rates the postage cost is usually more than the book's list price.

I know this isn't directly linked to stamps, but this will be one blow against international trade done at a personal level. We are already seeing new US postal rules on the posting of stamps to overseas buyers causing some consternation to American dealers. In many developed countries the cost of postal registration is already only really logical for quite expensive items.

That's my latest whinge. Sorry to make you all read it.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by fromdownunder »

Merged the post immediately above with existing topic on the same subject.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by DannyS »

Thanks Norm.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by aethelwulf »

amfhf1 wrote:The terminal rates are lower for third world developing countries.
Out of interest I often check the rates for services in countries I visit. I usually end up sending some covers to SB members, but no parcels.

Rates in Cambodia and Mongolia were both terribly high...and if you don't use a registered small packet service or EMS, you're putting the fate of your parcel in the hands of staff with pretty low wages in countries with track records not great for accountability...
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by DannyS »

Aethelwulf, the rates in Thailand for a 2 kilogram parcel can be seen on this link. The Thai baht is about 32 to the US dollar. What may be interesting in comparing postal costs is the price of registration is 82 baht (US $2.56). This has recently gone up from 65 baht and I think is country specific. Australia is 70 baht.

https://www.thailandpost.co.th/index.php?page=rate_result&country_code=US&weight=2000

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by ViccyVFU »

Well, I had to skim through the first ten responses from "first responders", who were more interested in lambasting the president for doing something. Same old, same old ... I get that you don't like him, but I still remain convinced he was "the least hopeless choice". Anyway, he is surfing on a wave of unpopularity to get things done, and this headline is easy to knock, if you never look deeper.

Its true that the UPU as a concept, is great, and ties in nicely with "universal access to affordable mail services", But over the 100+ years, the cheese moved, and what would still be great for letters "forever", simply doesn't work at the small package level.

Originally, it was conceived that roughly equal volumes would balance out, and it was only in 1969 that terminal dues were introduced, to reflect the huge imbalance in flows that were actually being experienced, to help defray some of the delivery costs involved.

On latest "guesstimate" figures I saw for this year, the US expects to lose around $170m on excess delivery cost (over terminal dues collected), but this is forecast to balloon to around $500m by 2021. At the headline level, of course the President doesn't want a half billion dollar hole / subsidy payment, but if it was as simple as plugging that gap (either by realistic accounting in USPS, or a cheque from the Chinese), its not the biggest line in the budget to be worrying about.

Its important to note this isn't a Trump initiative, its been rumbling on at least 10 years now....... but its an easy headline to feed the people, consistent with the narrative of China / Russia denigration, so political gold for a man who rarely has a thought longer than 140 characters.

I think the real pressures are behind the scenes, and we are just being fed a line to help influence change.

When a small package comes in from China for a dollar, is that really short changing a retailer who would sell the item for five dollars? I doubt it, they would just not sell very many at all.

America can't make a torch for 50 cents, so it makes sense to buy them as cheaply as possible elsewhere. Trouble is, when the American consumer dis-intermediates to this extent (talks directly to the manufacturer / wholesaler in China), there are whole raft of bodies unhappy that they are being left out of the transaction.

Sales Taxes are a huge black hole. All these micro shipments of "real value" are all missing their contribution to the IRS. In the UK we don't pay tax on imports under a certain amount, and I believe that's fairly common throughout the estern world with value added taxes (A de-minimis rule).

Alongside this revenue loss, there is the fact that the UPU are virtually a closed shop monopoly that carriers like DHL and FedEx would like to break into for the small packet delivery market. As long as the USA remains in the UPU, I think all the USA shipments have to go via USPS "if they are placed in a postbox anywhere in the world".

So Trump, by shouting about "possibly leaving", seems to be onto making progress, one way, or another.

If he gets realistic rates, its a victory for USPS, and clears a logjam at the UPU that was just being kicked down the road.

If he leaves the UPU (... but America want influence, its why the UPU is part of the UN, so that's quite unlikely), or is cornered into leaving the UPU (far more possible), then he can liberate the small packet market to other carriers (who no doubt would only be interested in the city parts and not the unprofitable universal service commitment).

Either way, it can be perceived as a win, and even if it does pass to third party carriers, you can be sure that they will create micro tax payment collections (like elsewhere in the world) to gather in some of the missing "consumption taxes".

But for John or Jane, it just inevitably means "higher costs for exactly the same products".

And if he does give China a "special tariff rate" to cover the terminal dues gap, it would have to cover all the countries they could drop ship to "to post on at a reduced tariff".

Given the demise of the letter, and the ubiquitous rise of the small package globally, perhaps its time to go back to the drawing board on what a universal postal system should look like, rather than try and adapt "a rulebook for steam trains"?

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by fromdownunder »

I doubt that I should respond here, as my research on the topic at hand is too limited to be of much value. My feeling is that the UPU have been sitting on their thumbs for too long, and it is time that they woke up and realised that the good old letter writing days are well and truly over, that international mail is now something completely different to what it was, and that International obligations are not what they were when the Convention was first applied.

The USA, for the right or wrong reasons, has highlighted the issue and bought it into the mainstream for discussion, and that can only be a good thing. The world is moving too swiftly to allow outmoded Conventions to be maintained, just because the Suits at UPU conferences continue to put the issue into the too hard basket.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by agondocz »

Without the front page headlines: Canada Post phasing out controversial shipping discount for Chinese goods.
The issue is the rate charged on small mail items called untracked packets, which are not traceable during the shipment. Canadian customers who opt for that shipping option when shopping online can get a cheaper price, but often have to wait weeks for the item to arrive. A slightly more expensive option that includes tracking and allows for much shorter delivery times has recently surpassed the cheaper option in terms of volume from China to Canada.

A Canada Post spokesperson said Wednesday that new rates, which are based on weight, will take effect in 2018 and will increase until 2021. At that point, the rate on untracked packets will have increased by up to 100 per cent.
I suspect that President Trump is using this issue for election purposes and that the Chinese government knows this. Perhaps President Trump will get a better deal? But at what cost?

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Global Administrator »

ViccyVFU wrote: Sales Taxes are a huge black hole. All these micro shipments of "real value" are all missing their contribution to the IRS. In the UK we don't pay tax on imports under a certain amount, and I believe that's fairly common throughout the Western world with value added taxes (A de-minimis rule).
You may have a solution. :)

Australia mid 2018 enacted a zero exclusion tax on all imports under $1000.

Buy anything here for ANY sum and 10% GST is owed. Here is one this week bought on ebay for $A9.10 (about 5 quid) and ebay AUTOMATICALLY removes the GST from buyers here.

Buy a $1 item from China, and the Feds get 10c tax. Automatically. No way around it. The GST applies to item PLUS postage so the Feds here would LOVE the post rates from China to go up!

If the USA Feds made ebay do that for all US purchases and deduct relevant state tax on each sale made in the USA domestic or foreign, they'd see so much money their heads would explode!

Multiply that all year and the Feds here will see a few BILLION $$ windfall just from ebay!
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by David Smitham »

So, if the US is paying out $$$$ in terminal dues as outlined in an earlier post one way to resolve that is to reverse the tables: make postage so cheap in the USA that China ends up paying terminal dues! E.g. pay customers to send mail overseas!

That would help Trump's MAGA cries. It may also end up bankrupting the USPS but at least it would be playing the same postage game as China. Realistically, that will not happen because as we know with more electronic mail there is less physical letter mail to deliver and so postage rates increase, further reducing the incentive to send letters, even with cheap (discounted) postage.

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Allanswood »

I send 1,000,000 articles of mail to you to forward on for me and you send me 10,000,000,000 for me to deliver for you - that's the problem with the current postal system. When things were roughly 50:50 it didn't really matter.

I can buy a pair of sock's post paid from China for $1 but it would cost me $8 to send them back. Obviously you can't make, pack and post a pair of socks for $1, so something is fishy with the system.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by ViccyVFU »

Global Administrator wrote:Australia mid 2018 enacted a zero exclusion tax on all imports under $1000.

Buy anything here for ANY sum and 10% GST is owed. Here is one this week bought on ebay for $A9.10 (about 5 quid) and ebay AUTOMATICALLY removes the GST from buyers here.

Buy a $1 item from China, and the Feds get 10c tax. Automatically. No way around it. The GST applies to item PLUS postage so the Feds here would LOVE the post rates from China to go up!

If the USA Feds made ebay do that for all US purchases and deduct relevant state tax on each sale made in the USA domestic or foreign, they'd see so much money their heads would explode!

Multiply that all year and the Feds here will see a few BILLION $$ windfall just from ebay!
Yes, I vaguely recall no one thanked the Australian Government for being so progressive at the time, but once people realise that change was inevitable, 10% isn't going to kill them, everyone pays the same, then it does close off the revenue black hole in an equitable way.

Of course, the Government would rather have 10% of a five dollar sale at Dingo stores, for the item you paid one dollar (plus ten cents tax) for online, but no system is perfect. :D

I doubt the 10% was even a consideration for you, on low ticket items.
David Smitham wrote:So, if the US is paying out $$$$ in terminal dues as outlined in an earlier post one way to resolve that is to reverse the tables: make postage so cheap in the USA that China ends up paying terminal dues! E.g. pay customers to send mail overseas!
Errm, not quite following "the math" there.

The hole is around $170m on total terminal dues actually paid of just under $500m for the year. (So they would have liked a cheque for $670m to break even, but only got the $500m).

Doing anything to try and frig the system would (a) bring you down to a level of spending $670m to cost the Chinese £170m, and (b) be fruitless, as they can probably deliver well inside those costs.

The only product the US could provide in small packets in that quantity would be B.S. (suitably packaged), and even then the cost of wrapping would exceed the costs of fully engineered products from China.

And it assumes there is local demand for the product.......Maybe pass on that!!
Allanswood wrote:I can buy a pair of sock's post paid from China for $1 but it would cost me $8 to send them back. Obviously you can't make, pack and post a pair of socks for $1, so something is fishy with the system.
I don't think the answer is to make inbound postage higher, on the off chance of returns, though that is exactly what is being proposed.

I have always found Chinese / Far East suppliers very reliable in terms of shipping stuff, replacing the broken stuff, right down to sending stuff I won at auction for five cents. (Yes, a few sizing issues, but I just get the biggest available and ask my wife to wash it a couple of times "until its snug").

As for economics ... well to sell anything sold for a pound "in a pound shop in Britain", they need to have a factory gate price in Hunan(China) of around 25 pence. VAT (Tax) on that would account for about 17 pence, and that's where the Governments revenue loss is focussed.

One bit of feedback I constantly hear is that people don't like waiting a month for their items, and we are already seeing bulk drop shipping to more localised depots to get me the products faster. (Last week, three glass safety screens for an iPhone 6 delivered same week (from Manchester, UK) for 99 pence all in. Chinese supplier. Now, how does that work??).

With the UPU monopoly in place, that "delay for economy" is likely to persist, in a world that certainly feels like it wants to move faster.

When you look at the $170m loss in isolation, for a country the size of America, I'd say that counterfeit stamps coming out of China would eclipse that sum annually "by a large multiple". Maybe Trumps next "thought for the day" could be to announce the death of stamps!!

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Uppercanadian »

agondocz wrote:Without the front page headlines: Canada Post phasing out controversial shipping discount for Chinese goods.
The issue is the rate charged on small mail items called untracked packets, which are not traceable during the shipment. Canadian customers who opt for that shipping option when shopping online can get a cheaper price, but often have to wait weeks for the item to arrive. A slightly more expensive option that includes tracking and allows for much shorter delivery times has recently surpassed the cheaper option in terms of volume from China to Canada.

A Canada Post spokesperson said Wednesday that new rates, which are based on weight, will take effect in 2018 and will increase until 2021. At that point, the rate on untracked packets will have increased by up to 100 per cent.
I suspect that President Trump is using this issue for election purposes and that the Chinese government knows this. Perhaps President Trump will get a better deal? But at what cost?

Best wishes,
AndrewG
Last week I was at a world transportation conference that covered a range of topics. One seminar I sat in had a panel member who was the head of the E-Commerce section of the Canadian Border Services Agency. He said that each and every parcel from PR China that entered Canada as parcel mail was pulled aside and x-rayed or physically inspected. The reasoning for it was that there is a vast quantity of illicit materials, most drugs such as fentanyl, being sent from China. The end result is that the typical package from China is taking 8-10 weeks for delivery.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by norvic »

Forgive me for not coming in earlier on this, but I had a week away. I first wrote about this when the United States Postal Service Office of Inspector-General issued it's report in December 2015 - nearly a year before Trump was elected. See http://stampboards.com/viewtopic.php?f=13&t=67474 for my edited version and a link to the actual report.

On this current thread:
GlenStephens wrote:So lets, see this system has worked for 100+ years via 10,000s of leaders in 200 countries and then one Moron bumbles along and ...................
He's not so much the moron in the case: on the previous thread:
Global Administrator wrote:Yes Asia countries are making big bucks from e-commerce.

The music will stop in a couple of years!
Not far out, in that estimate!

And another thread started in late 2014 following a report in the Washington Post. http://stampboards.com/viewtopic.php?f=13&t=57885

The unfortunate thing is that the US tried to get this fixed in the latest round of UPU discussions but they decided to postpone it. So for once Trump has tried to campaign from the inside, but failed so he is leaving the club. I don't think I can blame him for this one, and maybe if the UK, and some other countries subsidising China threatened to do the same it might shake up the UPU to act a bit more quickly.

BUT.... good luck on getting China to pay the new US unilateral terminal dues! Maybe the USPS will want payment up front. You can see the furore coming when no such payment is made, and thousands of eBay sales will fail because of 'goods not received' because the USPS refuses to take the containers full of mail!
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by norvic »

Having now read some of the responses here it is clear that many people are discussing the relative manufacturing costs in China and why that is hurting the US, Canada, etc. That is not the problem, so I shall repeat here (to save you clicking and reading on the link in the previous post) what the history of this is.
{Postal authorities} pay terminal dues to compensate one another for international deliveries. When someone mails a letter or small package to another country, the postal administration in the sender’s country receives the postage and pays terminal dues to the destination post for its share of processing and delivery. Terminal dues rates are painstakingly negotiated at the Universal Postal Union (UPU) among its 192 member countries every 4 years — and implemented about 18 months after that — using the principle of one country, one vote. Because of the complexity and length of the UPU decision-making process, significant changes to the terminal dues system may take many years to unfold.

Until 1969, terminal dues did not exist; the receiving post bore the entire cost of sorting, processing, and delivering the foreign customer’s item. The terminal dues system’s goals were to provide posts with some compensation for their delivery of inbound international mail and to support a single worldwide postal network. As a result, it funded improvements to the postal infrastructure in developing countries. Terminal dues, therefore, by design, were based upon setting rates by majority agreement rather than reflecting true economic costs.

The explosive growth in ecommerce traffic, especially from China, has greatly elevated concerns about the system’s unfairness. As international ecommerce packages experience rapid growth, destination posts with higher postal rates are protesting that terminal dues do not cover their costs. U.S. online retailers have argued that competitors in China can send packages to the United States {addresses} through China Post at lower rates than American businesses are required to pay in their own country {to send to the same customers}. In segments other than lightweight packets, such as heavier, higher-value packages requiring additional services, the rate advantage of low terminal dues posts like China Post decreases. Additionally, private sector shipping companies maintain that terminal dues are only available to postal operators, providing an unfair competitive advantage.

Governments and some posts started to discuss UPU remuneration reform to improve the cost coverage for inbound delivery of international mail. In 1999, aligning terminal dues with delivery costs officially became the UPU’s long-term goal. To allow a smooth transition, a two-tier structure consisting of developing and industrialized countries (now called “transition” and “target” countries, respectively) emerged. Posts located in lower-income countries such as India or Morocco generally would pay lower terminal dues than posts in industrialized countries such as the United States or France. In other words, industrialized countries would continue to subsidize developing countries. Although the goal was to improve fairness, the unintended outcome was distortions caused by an artificial compensation system

As of 2015, the lower terminal dues transition country category, established to help developing economies, still includes 140 countries, including the so-called BRICS (Brazil, Russia, India, China, and South Africa). In this way, the Postal Service will have subsidized posts for many years that, in some cases, have not necessarily needed such support. Forty of these countries, including all of the BRICS except for India, will join the target tier next year. However, moving these countries to the target category may not immediately lead to significant terminal dues payment increases. The UPU Congress will approve new rates, for the period from 2018 to 2021, next year {ie 2016} — meaning implementation is 2 to 6 years after a decision. The new target countries may continue to have an advantage during this period.

In the long term, the terminal dues system should reflect the true cost of inbound delivery. In the interim, the United States should continue to work with the UPU to support the separation of competitive small packages containing merchandise from documents and letters {§}. While letters would continue to fall under terminal dues, small packages would be subject to self-declared rates that reflect cost and are available to all — posts, competitors, and shippers alike.

The bigger issue is the increasing irrelevancy of the international terminal dues channel in an age of ecommerce because it fails to meet customer demands for speed and reliability. Efforts to ensure this channel’s responsiveness should not only include fixes to terminal dues remuneration but also, in parallel, measures to improve the service quality of cross-border packages. The Postal Service should champion reform to an increasingly anachronistic terminal dues system. Otherwise, it risks becoming an international ecommerce provider of last resort for a residual product that does not reflect associated costs or provide the speed and quality consumers demand.
{§} We have seen some evidence of this move in output from Royal Mail to Business Account Holders.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Global Administrator »

faro wrote:
GlenStephens wrote:The very CHEAPEST way for any American to mail a small box of goods of a few kilos here, is about $US90 = $A125. USPS has around the most expensive overseas parcel costs on the planet.
(OT) If I'm reading the correct line, ISAL Airmail M-Bags should still be available at US$3.23 per pound to Oz (group 9, with a minimum charge rate of 11 pounds = US$35.53).

Gone are the days, though, of surface M-bag shipping at around a dollar a pound.

=> https://pe.usps.com/text/imm/immc2_039.htm / https://pe.usps.com/text/dmm300/Notice123.htm#_c407

Finding staff who know the system and are willing to go out of their way to assist is another matter, as is the question of putting anything of value in those.

I used to use the old surface M-bags for large volumes of books from the US all the time; multiple bags weighing 66 pounds each which drove the Royal Mail up the wall at this end. :)
So ''M bags'' still work from the USA it seems? And yes the rate to Australia is $3.23 a pound as we are zone 9.

https://pe.usps.com/text/dmm300/Notice123.htm
Image
https://pe.usps.com/text/imm/immc2_026.htm
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We have a ''Print Post International Direct Bag'' similar M Bag system here where I can mail to USA for about $A7 a KILO! Long as it is printed matter. MIN is 5 kilo and MAX is 16 kilo.

Almost no-one knows it exists. It does, and normal stamps can be used. My postmaster did not know about it until I showed it to him in the current Rate Booklet!
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Uppercanadian »

A recent update to this story from Bloomberg.

https://about.bgov.com/news/state-dept-backs-plan-for-u-s-to-set-own-global-package-rates/

Article copied below....


State Dept. Backs Plan for U.S. to Set Own Global Package Rates
Posted March 15, 2019
By Cheryl Bolen

New proposal would let countries set own delivery rates
If adopted, move would allow U.S. to remain in postal pact
The U.S. would be allowed to set its own rates for the delivery of small international packages while still remaining in the 192-country Universal Postal Union under a plan pushed by the State Department.

President Donald Trump announced on Oct. 17, 2018, that the U.S. was starting the one-year withdrawal process from the postal union, a 145-year-old United Nations organization that regulates global mail delivery. But if the postal union could overhaul its rules, the president said, the U.S. would rescind the notice and remain.

The State Department-backed proposal was discussed Thursday at a meeting of the federal Advisory Committee on International Postal and Delivery Services, led by Joseph Murphy, unit chief at the State Department’s Bureau of International Organization Affairs. Committee members include shippers and exporters as well as postal officials.

Amazon.com Inc. and FedEx Corp. are among shippers who could be affected by a plan pushed by the State Department that would allow countries to set their own rates for delivery of small international packages. Murphy declined to discuss what would happen if the proposal failed, “because our goal is to succeed in this effort and to remain in the UPU.”

Costs at Issue

The president’s primary concern is the highly subsidized rate set by the UPU for delivery of lightweight packages sent from countries such as China, known as terminal dues. That rate, far less than the domestic delivery cost charged by the U.S. Postal Service, puts American businesses engaged in e-commerce—from small retailers to large manufacturers—at a disadvantage.

The rate also significantly undercuts private carriers such as FedEx Corp. and UPS Inc. that offer international shipping but cannot compete against the subsidized rates set by the UPU.
Trump, in the October statement, directed postal regulators to set self-declared rates for terminal dues as soon as practicable, and no later than Jan. 1, 2020. The Postal Regulatory Commission and U.S. Postal Service have begun that process.

Still, once the U.S. sets its own, higher rates for delivery of packets from other countries, it is likely foreign postal services will raise their prices as well, putting greater costs on American exporters.

Eggs in One Basket


Working committees of the UPU are scheduled to meet in April to consider two options for moving forward, and the State Department is urging the adoption of an amendment to the UPU agreement, called Option B, that would allow the U.S. to self-declare rates for inbound delivery of small packets and bulky letters. This is the only option that will satisfy the White House, Murphy said.

Although the text of the amendment is not public, the option would require that if a country self-declared rates, it has to make that rate available to every other country; no country would be required to self-declare rates; and those rates could not be higher than the country’s domestic retail rate, Murphy said.

“There are right now about 30 countries that actively support the U.S. position,” Murphy told the advisory committee, adding there is a similar number of countries that support the other option, which would accelerate the rate increases already approved by the UPU.

There are 192 member countries in the UPU, each with one vote, and it would take a two-thirds vote to approve a pact amendment between the group’s scheduled quadrennial meetings, Murphy said.
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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by DrewM »

Perhaps this sort of thing could be avoided? Referring other collectors' "anti-Trump hysteria" is insulting. I have similar opinions, am a thoughtful and well-educated person, and I've come to my opinions without any trace of hysteria. How about toning it down to something like other people's "opposition to Trump"?

Opinions you do not agree with are not automatically "hysteria".

Thanks for letting me get that off my chest!

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America to pull out of U.P.U.

Post by pickwickian »

It is reported that Donald Trump is planning to withdraw America from the Universal Postal Union.

The UPU, established in 1874, is the framework for all international mail exchanges.

This has ramifications for philately, but also for postal communications between America and the rest of the world.

This would be extraordinary if we hadn’t already seen nearly 3 years of Trump’s hatred of any system of international agreement.

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Re: America to pull out of U.P.U.

Post by Allanswood »

search is your friend and SB is quick on the draw, nearly a year ago now...

https://www.stampboards.com/viewtopic.php?f=13&t=84000
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Re: America to pull out of U.P.U.

Post by Waffle »

If he does so, does this mean that no postal authority, outside the U.S.A. will accept mail with US stamps or send mail, with outside stamps, to them. If so, does he realise that, if his wall is ever built, he will not be able to let anyone , except Americans, know about it. Oh, I forgot; he can always TWIT! Perhaps I mean tweet. On second thoughts,I was right the first time.
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Re: America to pull out of U.P.U.

Post by pickwickian »

Thanks Allanswood, I did do a cursory search, but hadn’t realised Trump had announced his intentions so long ago. Anyway, the UPU meeting is now imminent

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Re: Trump Announces USA Withdrawal from UPU Treaty

Post by Global Administrator »

Pickwickian - Our established practive here is to post details and dates and links and so on.

General statements as you made, starting a new thread on it no less, suported with no links are menaingless - sorry.

The current state of play is -


USPS warns shippers 'no longer eligible for discounted rates' if US leaves postal union

Previously negotiated rates for international shipping may be null on Oct. 1 — creating even more uncertainty for cross border e-commerce going into peak season.

Published Sept. 4, 2019

On Sept. 24, the Universal Postal Union (UPU) will conduct perhaps its most consequential meeting in more than 100 years. The UPU, a global organization backed by a treaty that sets shipping rates from country to country, has a Congress that meets every four years.

But an extraordinary Congress meeting of the full 192-country membership only meets when two-thirds of the members agree to do so.

The U.S. withdrawal from the UPU is the occasion for the third such meeting ever to be called.

The Trump administration announced its intention to withdraw from the UPU in October 2018, pending negotiations with the other members to form new bilateral and multilateral agreements.

The controversy around the UPU treaty, as it stands, swirls around the contention that the treaty makes it very easy and relatively cheap to ship any item under 4.4 pounds into the U.S. from developing countries — so much so that U.S.-based shippers sometimes can’t compete.

"This outdated arrangement contributes significantly to the flood of counterfeit goods and dangerous drugs that enter the country from China," said National Association of Manufacturers (NAM) President and CEO Jay Timmons in a statement supporting the move back in October.

Now, Supply Chain Dive has learned the United States Postal Service (USPS) sent notices to organizations with negotiated service agreements (NSA) with USPS, warning the international rates in their contracts may be null after Sept. 30 this year.

"We are making every effort to try to minimize any disruption that may be occasioned by this change and are working to devise solutions that promote continuity of operations, as well as alternative solutions for the future," reads an email from a USPS official to an NSA holder dated Aug. 22, 2019 obtained by Supply Chain Dive.

The email goes on to say the USPS is "giving notice of termination of the Agreement," referring to the receiving organization's service agreement, out of an "abundance of caution."

"Please note that your entity will no longer be eligible for discounted rates under the Agreement beginning on October 1, 2019, unless the Postal Service provides further notice regarding this matter to you," the email concludes.

Industry sources confirmed several other organizations with USPS service agreements received similar messages.

A USPS spokesperson did not confirm the notices to Supply Chain Dive when asked to do so, but did provide the following statement as to the demands on the table at the upcoming UPU Congress meeting:

"The Postal Service is working closely with the State Department, the Postal Regulatory Commission and other stakeholders to implement self-declared rates. While the United States is preparing to leave the UPU in October, if a solution can be found that eliminates the economic distortion caused by the current terminal dues system on U.S. businesses, then the United States will continue its participation in the UPU," the spokesperson wrote in an email.


https://www.supplychaindive.com/news/usps-warns-postage-sell ... es/562214/
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Re: America to pull out of U.P.U.

Post by MargoZ »

Allanswood wrote:search is your friend and SB is quick on the draw, nearly a year ago now...

https://www.stampboards.com/viewtopic.php?f=13&t=84000
Actually first reported on Stampboards in my September 2018 Stamps in the News - posted here over a year ago - :wink:

http://www.stampboards.com/viewtopic.php?f=13&t=83498
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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by Allanswood »

I have donned my red slippers as penance. :wink:

I did not diggeth down farthest enough.
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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by drkohler »

This "China is in the cheap bucket" scenario is something that has been buggering a lot of European postal services. For once, TheDonald actually is only doing/threatening something a lot of agencies over here would also want to do. Interesting weeks ahead....

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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by Allanswood »

It's always intrigued me that I can buy a pair of sock's from China and they are delivered, postage included for $1.

What recompense does AP get for that sort of cost!

And if I don't like them, have you seen what it will cost me to send them back!?
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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by Global Administrator »

The inflow from China versus outflow will be 10 to 1 I'd guess for Oz, Europe, USA etc. Mabe 100 times more?

Never understood how it works.

They sent us 10 million ton of mail a year say, and we send then 1 million ton.

How much a kilo on the 9 million ton imbalance do AP or USPS get from China?

There must be a set per ton UPU figure surely?
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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by norvic »

We bought a small household item from Amazon in late August. There was a choice of suppliers at various prices. The cheapest suitable item came from China - delivery 25+ days!

It arrived today - it would be classed as a small parcel in UK, US & other terms. Although light (60 gm), it was about 15 x 10 x 6 cm: over 2.5 cm it's bigger than a Large Letter, it's a parcel. The total price was about £2.50.

The shipping label shows a value of US $2.62 - sending this INLAND would cost £3.00!!, yet Royal Mail will have got pennies for that.

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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by norvic »

From the Star Tribune.
Postal union accepts reform, quashes US walkout threat

Associated Press September 25, 2019 — 11:06am

GENEVA — Nearly 150 countries reached a compromise Wednesday that will keep the United States in the world's largest union of postal operators, following a threat by the Trump administration to quit unless it got its way.

The head of the 192-member Universal Postal Union, Kenya's Bishar Hussein, had warned that a U.S. walkout would "completely shut down" the traditional system of delivering bulky letters.

The extraordinary congress, called this week to respond to the U.S. threat, was only the third for a 145-year-old group that calls itself the second-oldest multilateral organization.

Trump trade adviser Peter Navarro said the proposal would keep the U.S. in the organization that it helped found. He said the proposal "bridges the different views held by net postal exporters and net postal importers here in the room."

UPU members exchanged hugs, handshakes and high-fives after the vote by acclamation — with no dissention — passed with applause.
No details provided but they should be available on the UPU website in time.
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Re: Trump Announces USA Withdrawal from the UPU Postal Treat

Post by Global Administrator »


Global postal group reaches deal to avoid US withdrawal

Key Points

The Universal Postal Union agreed to a compromise Wednesday that would allow the United States to set its own inbound postage rates and remain within the organization the Trump administration had previously threatened to leave.

Jean-Paul Forceville, the chief negotiator for France’s La Poste, told CNBC earlier that the probability was “pretty high” that a compromise would be reached this week to reform the 144 year-old organization along some of the lines the United States has proposed.

The Universal Postal Union agreed to a compromise Wednesday that would allow the United States to set its own inbound postage rates and remain within the organization the Trump administration had previously threatened to leave.

After rejecting a handful of earlier options, more than half the 192-country body voted in favor of “option V,” which will allow the US to raise prices for packages arriving from other countries, in exchange for a contribution into the Union’s “voluntary fund,” which covers security and pensions. Other countries can also adjust prices on US inbound packages next July and on packages from elsewhere by set amounts each year.

“By remaining in the UPU, the United States retains its important leadership role in the global postal system,” says Kate Muth, executive director of International Mailers Advisory Group, which includes Amazon and eBay. “Mailers and shippers will see no interruption in service through the critical holiday season and beyond.

Jean-Paul Forceville, the chief negotiator for France’s La Poste, told CNBC earlier that the probability was “pretty high” that a compromise would be reached this week to reform the 144 year-old organization along some of the lines the United States has proposed.

The White House has been pushing to raise—or, in postal jargon, “self-declare”—the rate it charges other countries to deliver their packages. Peter Navarro, leading the White House delegation in Geneva, says that a higher barrier to entry would shift demand from cheap goods produced in and subsidized by China to higher-quality goods produced in the US.

“Donald Trump is taking action to address this disparity, which costs the USPS and American consumers millions of dollars each year,” Navarro wrote in the Financial Times this month.

To effect the changes as soon as possible, the White House triggered a one-year withdrawal process in late 2018. The UPU convened an “extraordinary Congress” this week to address the US’s proposals or risk its withdrawal—and a full-scale disruption of the global mail system.

“I think we know why we are here,” said the Kenyan delegate from Posta Kenya, without referencing the United States.

The Trump administration’s grievances center on one portion of the mail calculus called terminal dues - the negotiated rate a member government can charge another country when packages under 4.4 lbs arrive on its shores. On Tuesday, the UPU rejected the White House’s preferred approach: Allowing all countries to set their own rates immediately.

But the US—along with France, Canada, Japan and others—are now working on a “multi-speed” compromise that would allow these rates to fluctuate on a set schedule.

Higher prices ahead - but for whom?

The bulk of the changes would apply to letters and packages, under 4.4 lbs., sent internationally. While a relatively small subset of global commerce, it captures military mail, absentee ballots, retail catalogs, trade journals and light e-commerce purchases.

As a result, both US importers and domestic businesses reaching non-US customers could see costs rise, says Merry Law, president of WorldVu.

“The US consumer would certainly see a higher outbound package price. For inbound packages, a foreign company might indeed just say, ‘We’re going to have to charge a delivery charge,’” Law tells CNBC. “I already know mailers who are making other plans.”

For that reason, companies like eBay, Etsy, Amazon and Alibaba have raised concerns about the impact, either directly to White House officials or through industry groups.

“We will have our sellers’ backs regardless of the outcome and work to implement a solution to that they can continue serving buyers around the world,” Etsy’s head of global shipping, Roman Sobieri, said in a statement to CNBC.

The shift may drive more consumers to purchase from dollar and discount stores, and drive more shipping volume to express carriers like FedEx, UPS and DHL, US officials say. Commercial air carriers may see less cargo space taken up by USPS deliveries, Law says.

Already, shippers are working to address the issue. Stamps.com launched a new product, GlobalPost, to try to give comparable prices to what they can get from the USPS. ” We’re acutely aware of the impact this could have on our customers, our customers do ship internationally quite a bit, and we want to ensure they have seamless access to those markets,” said Jeff Carberry, Stamps.com CFO.

A January 2019 white paper by the Council of Economic Advisers highlighted “distortions” that exist in the system but did not estimate the impact of the forthcoming changes.

US officials would not share internal projections of where the White House believes prices would go, and prices negotiated between UPU countries are done so privately.

In response to a request for information about changes in cost, Peter Navarro sent CNBC an interview with longtime FedEx lobbyist Jim Campbell in which Campbell suggested US terminal dues would rise 125% to 180%. Other estimates, according to industry executives like Law, suggest terminal dues could rise up to 600%.

Leveling the playing field

The organization that will see the greatest impact will be the US Postal Service, whose annual finances ebb and flow depending on what it pays other countries and what it receives in return from them for its services.

A spokesperson for the US Postal Service provided CNBC a statement in support of the administration’s actions but declined to answer whether the organization would lose money - or be forced to pay a fee - to level the playing field.

Under the agreed compromise, the US and any other country that decides to self-declare rates immediately will pay a total $40 million annually into the organization to fund initiatives like security and the organization’s pension. The plan services the roughly 200 full-time employees of the multilateral organization, three of whom are American.

Forceville told CNBC there was no compromise deal without a fee for a country’s privilege of setting its own rates. A second participant in talks says the group had previously discussed an annual payment of $10 million into the organization.

“The Administration deserves credit for taking leadership on addressing a global, economic distortion that was affecting trade,” says Clete Willems, a partner at Akin Gump and former White House trade negotiator. “That should be weighed against any minimal cost of preserving the UPU system.”

The Administration’s move is backed heartily by the National Association of Manufacturers (which believes US producers will see higher demand); the US Chamber of Commerce (which believes US producers will see higher demand); and the express carriers themselves.

UPS and FedEx representatives provided statements in support of the move, but declined to speculate on the impact to their business. Three participants in talks confirmed that, if government-backed postal services become more expensive, private carriers’ prices will appear more competitive.

“What we’re going to do is make the USPS option more consistent with the rest of the market,” one White House official told CNBC. “It might benefit FedEx and UPS, but not at the expense of USPS.”


https://www.cnbc.com/2019/09/25/postal-compromise-close-as-u ... mpact.html

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