United States is Leaving the UPU

The Universal Postal Union (UPU) will meet on September 24th due to the possibility of a United States withdrawal in October. The reason for the potential withdrawal is due to the fact that UPU agreements make it easy and relatively cheap for developing countries to ship packages under 4.4 pounds into the United States. More specifically countries such as China can easily ship "counterfeit goods and dangerous drugs into the country" said Jay Timmons (CEO and President of the National Association of Manufacturers). A better deal is being negotiated but if no agreement is met, the United States will withdraw from the UPU. Recently the USPS has sent out emails stating negotiated service agreements for international rates may be voided after September 30th, right before the peak season is set to starts.

What does this mean for the upcoming peak season?

The USPS plans to keep its international products and services however the geographic coverage may change. Rates changes are also likely to follow the current annual cycle unless there is a dramatic cost increase for the USPS. Leaving the UPU would most likely hurt small businesses who sell products to customers around the world by losing their contracted rates with postal agencies globally. Contracting new rates right before the peak season doesn't give shippers much negotiation power while at a time where costs savings are necessary. The bigger picture is how to incur the higher rates without transferring the costs to the end consumer yet still providing a great customer experience.

Thinking Ahead

Shippers can get ahead of the potential withdraw with a new service offered by Stamps.com. The service is under the GlobalPost brand name which does not rely on the participation of the United States in the UPU. Stamps.com offers similar transit times, clearance processes, and competitive rates. Optimized shipping will be key if the withdraws take place, saving money where necessary and in places, you might not have known about. Partnering with a Freight Audit and Payment company with a superior business intelligence platform that can be highlighting areas of inefficiencies and cost-cutting initiatives is a great asset to have in any market.