This week, the Postal Regulatory Commission opened up a proceeding to solicit comments on the Universal Postal Union‘s Extraordinary Congress. The purpose of obtaining comments is to determine whether the proposals put forth by the UPU’s Extraordinary Congress’ are consistent with the modern rate regulations and standards that the Regulatory Commission created. The UPU is convening the Extraordinary Congress from September 24th-25th in Geneva, Switzerland. This is only the third Extraordinary Congress in the UPU’s history.
What is the Postal Regulatory Commission?
The Postal Regulatory Commission (or PRC) is an independent agency that exercises regulatory oversight over the Postal Service. The PRC was established along with the Postal Reorganization Act of 1970. The Postal Reorganization Act of 1970 created the Commission to set the rates for different classes of mail by holding hearings on rates proposed by USPS.
The Purpose Behind UPU’s Extraordinary Congress Meeting
The Extraordinary Congress is convening in Switzerland to determine whether or not the UPU’s terminal dues system needs to change. The following lists out the three options the Congress is considering to pursue:
- Option A: Acceleration in the terminal dues schedule created at the Istanbul Congress
- Option B: Countries charge self-declared rates on in-bound packages (rates will not be higher than each individual countries’ domestic rates)
- Option C: A convergence option that creates self-declared rates as its basis. However, this option will also include elements aimed at mitigating undue price impacts with a phasing-in period at a maximum of 70% of domestic tariffs.
What are Terminal Dues?
Terminal Dues are what different countries’ postal systems pay each other to deliver cross-border mail. It helps to think of them like the cost of doing business. Here’s an example: someone in the United Kingdom buys a pair of shoes from Japan. In this case, Japan’s postal operator is supposed to pay the United Kingdom’s postal operator for the cost of processing that parcel. Japan’s postal operator is also supposed to cover the cost of having a courier transport those shoes all the way to the final destination.
Put simply, the imbalance in the current terminal dues system is precisely the reason why President Trump threatened to withdraw the United States from the UPU.
How the Process of Choosing an Option Works
When the Extraordinary Congress convenes, it will first propose the option considered to be furthest from the current status quo. As it stands, Option B is furthest from the status quo. If Option B is chosen, then the other proposals will be set aside. If Option B is not chosen, then Option C will be considered. If Option C is rejected, then Option A will be considered.
As of now, all countries in the UPU are working on lining on support for their preferred option and considering potential amendments.