Postal and parcel operators worldwide hail UPU ‘victory’ deal

Postal operators around the world have welcomed the UPU ‘victory’ deal that will keep the USA in the world postal system and phase in self-declared delivery rates for imported small light parcels over the next few years.

Parcel carriers and express firms have also hailed the agreement, which will result in significantly higher postal delivery rates for cross-border small packages in many developed countries. The US Postal Service will increase its rates from July 2020, and other countries will follow from January 2021 onwards in a five-year transition.

In Europe, members of the PostEurop association, who represent more than half of the world’s postal traffic, collectively welcomed the UPU agreement.

“Maintaining the Union is a priority for all PostEurop members,” emphasised the association’s chairman Jean-Paul Forceville, who is La Poste’s international relations director and spoke on behalf of France at the UPU Extraordinary Congress.

“Our members are key contributors to the world economy and the remuneration discussions have a global impact on posts and their customers. Therefore, we welcome the consensual decision taken at the UPU Congress to maintain a union with all its members, in the spirit of multilateralism.”

Botond Szebeny, PostEurop Secretary General, added: “This decision is a victory of everyone! First, it allows maintaining the unity of the UPU’s global delivery network by keeping all the UPU Members in the organisation. At the same time, the compromise decision addresses the concern of some countries related to the level of remuneration of international e-commerce postal flows, while ensuring the business relevance of the postal e-commerce delivery system too.”

In the USA, the International Mailers’ Advisory Group (IMAG), an association representing various parcel operators and e-commerce players, stated: “IMAG is pleased that the Universal Postal Union (UPU) was able to find a solution to achieve global remuneration reform that allows the United States to remain in the UPU… By remaining in the UPU, the United States retains its important leadership role in the global postal system. Mailers and shippers will see no interruption in service through the critical holiday season and beyond.”

Separately, Ken McBride, Chairman and CEO of Stamps.com, said: “This is great news for our e-commerce customers in the United States. Online retailers across all our business units rely heavily on the USPS for international shipping, and this UPU decision means their businesses can be far more competitive in the global marketplace. With fairer shipping costs, U.S.-based e-commerce sellers can now compete on a more even playing field.”

He emphasised that USPS services would remain a core part of the company’s GlobalPost international shipping product, which offers added-value features not found in traditional international postal services.

The U.S. Postal Service, UPS and FedEx all applauded the UPU agreement, US publication Multichannel Merchant reported. US Postmaster General Megan Brennan thanked President Trump “for his leadership in helping us to negotiate the resolution of an intractable problem with the payment system for the international exchange of small packets that has persisted over many years, and that has been extremely difficult to resolve.”

UPS described the vote as “a win for American small businesses who are competing against foreign shippers in the fast-growing e-commerce market”, while FedEx said the compromise “is a good step forward to addressing the issues that precipitated the convening of the UPU 2019 Extraordinary Congress and all UPU members should be congratulated for reaching an agreement”.

However, JP Morgan analyst Brian Ossenbeck noted: “We do not expect FedEx and UPS will benefit from a flood of new exports fleeing higher UPU costs considering the products shipped are typically low value and under two kilograms.”

The consequences of the UPU agreement on remuneration rates is expected to be a major topic at next week’s Parcel+Post Expo conference and exhibition in Amsterdam. CEP-Research will be reporting live from the event.