USPS leaving Universal Postal Union

[femmefan1946]

https://www.freightwaves.com/news/us-to-leave-global-postal-union-next-month?p=228902&fbclid=IwAR2DR...

The practical effect of the exit of the U.S. would be a rate increase of at least 300 percent on postal parcel traffic to the U.S. from heavy net exporting countries as rates kept artificially low for decades begin to normalize, according to Matthew White, a strategist for iDrive Logistics, a consultancy working with customers to prepare contingency plans for the possible U.S. exit. U.S.-based international shippers will also pay more, at least over the short-term, because USPS will cancel negotiated service agreements (NSA) covering international shipments if the withdrawal takes place, White said.

[musicyouneed]

Do you think that will affect Chit Chat shipments?  They use USPS so it is not really mail from Canada to the US as they physically take it over the border. 

It may affect my international shipments going from the US to international using Ascendia though, or will it?

[femmefan1946]

It shouldn't affect the USPS domestically.

The article is from a US journal and they think this will have a bid effect on the rest of the world.

What they don't realize, and President Macron pointed out during his visit with PM Trudeau, is the the EU is actually a larger economy than the USA even without the UK.

This is another Trump initiative that will hurt the US economy more than anyone else.

But it will be hard on Canadian eBay sellers-- and buyers, since US sellers will have to use couriers like UPS and FedEx since USPS will not longer have contracts with Canada Post.

It just occured to me that only US sellers using the GSP will be able to ship to foreign buyers.

The seller only ships to Kentucky.  The GSP seems to use private shippers to the Canadian border. Then Canada Post takes over from the courier.

[silverpinups]

"It just occured to me that only US sellers using the GSP will be able to ship to foreign buyers."

According to the US boards the GSP will be phased out when Managed Payments becomes a reality for all US Sellers.

[femmefan1946]

Why?

GSP (spit spit spit) is a Seller Protection program.

It means that US and UK sellers can use cheap tracked domestic shipping to send the purchase to Kentucky, after which GSP/Pitney Bowes takes over responsibility for delivery.

From the buyer's perspective, GSP means that import fees* have been collected before the seller ships, so no shocks on the doorstep.

This also means there is no chance of the customs scam where the buyer refuses to pick up the parcel until they get a refund, then pay the customs and get their purchase for a percentage of the value.

With our risible $20Cdn duty free allowance, we rightfully detest the GSP, but from the seller's point of view, it does a good job of Seller Protection.

The GSP has nothing to do with the payment process. That's handled by Paypal, who competently sort the import fees over to Pitney Bowes and the actual payment to the seller.

How does the Board Poster believe Managed Payments would affect that?

It might be worth noting that MP is run by a Dutch company, Ayden, which, in my opinion, may understand international commerce better than the US-based Paypal.

Could you link the discussion?

*to cover applicable duty, SALES TAX, and a ~$5US service fee.

[silverpinups]

There's a link to a US Community Board discussion on Managed Payments. I would start at the end (more current info on the subject) and work your way back since the thread started in 2018 but is still currently active with recent posts. This is not a zombie thread.

There's some very good posts if you have an afternoon to do some reading. You will find some info on GSP not being supported by Managed Payments. Whether it's true or not remains to be seen.    

 https://community.ebay.com/t5/Payments/Managed-payments/td-p/28833860

[mrdutch1001]

The issues with GSP and Managed Payments is that GSP  is NOT YET compatible with the Managed Payment system so any sellers currently using GSP are not required to sign up for MP until such time as things are sorted out.

[marnotom!]

This ☝🏻

Seeing as Managed Payments is being gradually rolled out and full implementation isn't expected until 2021, there's no point in rushing to ensure it supports the GSP until a critical mass of eligible sellers is close to being achieved.

[femmefan1946]

As I understand the MP system, Paypal will be a part of it (along with PaisaPal /India and the Canadian payment system that was mentioned on these Boards a few weeks ago).

My main concern is that I would have to move to shipping by UPS which would be tracked (irrelevant to those of us who use lettermail and are happy with Global TRS) but a LOT more expensive for our customers. Unless ChitChat finally opens that Victoria BC sub-office they have considered.

[zee-chan-jpn-books]

"In a 2015 report, the USPS’ Inspector General found that the low terminal dues for China “benefit China Post and Chinese online retailers in the lightweight, low-value package segment at the expense of [USPS] and American retailers.” This report estimated that the terminal dues structure cost USPS approximately $300 million from 2010 to 2014. According to the Postal Regulatory Commission, the independent agency that rules on postal rate proposals, the loss to USPS attributable to terminal dues reached $134.5 million in fiscal year 2016 and $170 million in fiscal year 2017."

Looks like they are exiting from the universal postal union because they don't want to keep subsidizing for China's cheap postal rate, which IMO is a wonderful move.

Now the important question is, how much would it affect Canadian sellers? Does it mean I'd no longer be able to mail a <200g letter to USA for $5.45, or a <250g small packet for $8.96 in 2020? 

[ypdc_dennis]

---

@zee-chan-jpn-books wrote:

"In a 2015 report, the USPS’ Inspector General found ...

According to the Postal Regulatory Commission, the loss to USPS attributable to terminal dues reached $134.5 million in fiscal year 2016 and $170 million in fiscal year 2017."

Looks like they are exiting from the universal postal union because they don't want to keep subsidizing for China's cheap postal rate, which IMO is a wonderful move.

Now the important question is, how much would it affect Canadian sellers?

---

No, this all about Trump and his trade war with China.

The postal rules were updated for 2018, so more recent data under the current agreement would be a better view instead of old data and estimated old data.

In any case, we should wait until after the UPU (Universal Postal Union) September 24-26 special meeting which is to make decisions on a possible revision of small packet remuneration rates.

If USPS does pull out the main impact will be for lettermail and small packet rates. Which should make ChitChatsExpress and other alternatives happy.

-..-

[femmefan1946]

Does it mean I'd no longer be able to mail a <200g letter to USA for $5.45, or a <250g small packet for $8.96 in 2020?

Basically yes.

On the third hand, our American competitors would not be able to ship internationally through the postal system, increasing their costs greatly.

Although they do have the Global Shipping Program in place already, so ALL US sellers who want to ship internationally would be forced to use it or something equivalent.

I foresee a huge increase in the use of freight forwarders by Canadian and overseas customers, with the extra expense that involves.

On the bright side that may mean that Canadians will shop in Canada (or the EU, since we now have a Free Trade Agreement with them) rather than go to the expense of importing from the US via couriers and freight forwarders.

[mrdutch1001]

This isn't just about eBay sellers either, this involves sellers who utilize any selling venue whereby they ship via Canada Post/USPS. For those of us who have no alternatives to Canada Post and who mainly ship letter rate & small packet rate items, it could  have devastating affects.

However, it remains to be seen how this will all  play out so hopefully there will be something worked out for the good, when all is said and done.

[zee-chan-jpn-books]

---

@ypdc_dennis wrote:

---

In any case, we should wait until after the UPU (Universal Postal Union) September 24-26 special meeting which is to make decisions on a possible revision of small packet remuneration rates.

---

Thanks. Fingers crossed... I'd say 70-80% of my sale is to USA. While CCE is a doable alternative, I don't have the sale volume (1-5 a month now) or time to support driving 45 minutes roundtrip to CCE for only a couple sales.

[widgetc]

My bet is that should the U.S. leave the UPU a bilateral postal agreement with Canada would come about very  quickly.

If not it would be basically end many sellers efforts here, especially those sending stamps in letter mail for 90 cents postage that they purchase at a discount.

[cumos55]

The following is from an article in the Winnipeg Free Press, dated September 17, 2019 -----

With the title …..U.S. pullout from postal treaty may hurt Canadian e-commerce

“ … the US Postal Service said it aims “to end the distortionary effects associated with excessively low rates for certain foreign mail”

And then -----

The structure of payments  - known as terminal dues – under the postal treaty needs to be reshaped for the 21st century supply chains …..

And more -----

…. some on-line retailers in Canada may see direct-to-consumer delivery prices leap  - though e-commerce businesses sending products to the US will remain largely unaffected.

And also -----

Canada Post pointed to the nearly 40-year old bilateral agreement with its southern counterpart that “covers all product flows north and south of the border” and takes precedence over the multinational postal convention. The agreement means North American shippers and their continental consumers would likely see delivery prices remain stable.

Canada Post declined to speak to its position on the US demand for more balanced terminal dues, citing the “sensitive commercial nature”  of the upcoming meeting.”

-------------------------------------------------------

Conclusion --- Not in the article ... Personal thoughts

--- A major effect of the pullout would be with the flow of mail between Canada and countries other than the US.

--- The main target of the US in this change is China.   China has become most progressive in international commerce.

[femmefan1946]

I wonder if Canada Post has been chatting with DHL over tea and cookies. Maybe send them some Nanaimo Bars to encourage them to work with us.

[luckylegend]

“The practical effect of the exit of the U.S. would be a rate increase of at least 300 percent on postal parcel traffic to the U.S. from heavy net exporting countries as rates kept artificially low for decades begin to normalize, “

Heavy net exporting countries are germany, japan and china.

Canada is like in the red. The rates should decrease not increase in our case . (I highly doubt they will decrease though)

So I think canadian sellers would still be ok with buying and shipping to USA

I do have buyers from china and they will probably just increase because USA is not in the game anymore. Prices will go down for canadian people who buy used designer brands from japan and china as USA buyers will have higher shipping rates to pay...

Also canadian sellers will see more purchases from USA because compared to soaring shipping rates from these sellers in china and japan we would be the cheaper option;)

[ypdc_dennis]

Special meeting of the UPU has approved changes that will keep the USPS happy.

Effective July 2020: Countries that import more than 75,000 tonnes (75m kgs) of post per year can set their own rates for delivery.

https://www.bbc.com/news/world-europe-49833914

[tyler@ebay]

@ypdc_dennis & @femmefan1946 - purely curious, not in an 'official' capacity whatsoever, but wondering what your take is on the announced 2020 change?