After the UPU Extraordinary Congress rejected Option B, the Congress reached a final decision in Geneva on September 25th. The global postal group came to a compromise that will allow the United States to raise prices for packages arriving from other countries starting in July 2020. This decision means that the United States will stay in the Universal Postal Union, and that USPS customers will still be able to ship internationally as part of the global postal system. It’s a good day for shipping and mailing!
The Decision Made by the UPU Extraordinary Congress
The UPU’s Extraordinary Congress came to the least disruptive decision possible, and they’re calling it Option V.
Option V will allow the United States to raise prices for packages coming from other countries starting in July 2020. In exchange for this allowance, the United States will contribute $8 million a year to the UPU’s “voluntary fund.” This money will cover security and pensions within the Universal Postal Union. Other countries apart from the United States won’t be required to contribute to the voluntary fund.
As part of the agreement, other countries will also be able to adjust prices on packages coming from the United States starting next July. Other countries will be able to adjust prices on packages from everywhere else by set amounts each subsequent year. These incremental rate increases will allow for an easier transition process over a five-year period. This schedule will help avoid rate shock across the globe.
Why the United States Threatened Withdrawal from the UPU In the First Place
The United States first proposed a motion for every country to self-declare their rates. If the UPU didn’t agree to this proposal, the United States maintained it would withdraw from the UPU altogether. The United States threatened withdrawal from the UPU because other countries like China were taking advantage of unfair terminal dues. To make a long story short, the United States was basically subsidizing China’s international shipping costs. As a result, the U.S. was losing a ton of money each year that it didn’t necessarily have to.
If the United States would have withdrawn, it would have resulted in more than a disruption of the global mail system. It would have wreaked absolute havoc, since so many countries rely on the U.S. for imports and exports.
Now That the United States Will Stay In the Universal Postal Union, What Happens Next?
Moving forward, international shipping rates will inarguably increase across the board. The types of packages that will be affected the most are small international parcels under 4.4 pounds. These packages include parcels such as international mail, military mail, absentee ballots, retail catalogs, and small eCommerce packages.
All that being said, customers of USPS will still be able to ship internationally since the United States has decided to remain in the Universal Postal Union. In our opinion, that alone is the biggest win.