The proposal, if it passes muster, would keep the U.S. in the Universal Postal Union (UPU), the 154-year-old governing body that the Trump administration plans to leave next month unless UPU delegates vote to approve the changes it has demanded to the global postal cost structure. It would also dramatically increase the postal rates paid by businesses and consumers from nations that have benefitted from a half-century of artificially low rates on U.S-bound shipments. Notably, Chinese merchants and consumers could see postal rates more than double because China Post would be charged a much higher rate by USPS to process postal shipments.
According to two industry sources, the compromise, crafted by Germany and France and informally agreed to by the U.S., would permit the U.S. and any country doing business with it to “self-declare” their international postal rates by July 1, 2020, at a rate effectively equal to 70% of what UPS would charge to handle a domestic parcel or mail shipment, a fee system that has been known as “terminal dues.” That is much higher than the dues now paid by many so-called developing countries that use the USPS. In the case of China, still classified a “developing” country under UPU guidelines, China Post pays USPS about 35% of what it costs USPS to process a postal shipment within its borders, estimates Alex Yancher, co-founder of Passport, a U.S.-based international parcel delivery firm who has been closely following the saga.