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USPS Hikes Rates

International volume shippers that have enjoyed discounted United States Postal Service rates are facing increased rates as of July 1st, 2020. The increases are the result of a deal reached by the Universal Postal Union (UPU)--the body that coordinates postal policies among nations. The rate hike will drive the cost of international shipping to nearly 70% of the current U.S. domestic rate. However, most Stamps.com shippers will not see a price increase because the postal giant negotiated its own deals with international carriers and built out its GlobalPost network in 2019 to prepare for price increases like this.

Discord in the UPU

The United States has been threatening to leave the Universal Postal Union (UPU) for some time, largely due to China receiving “developing nation status.” When a nation is tagged as a developing nation, they enjoy heavily discounted rates when shipping internationally. As a result, sellers shipping from China into the United States have been receiving significantly lower rates than domestic sellers. Of course, this structure has given foreign businesses a significant advantage over U.S. companies that sell comparable goods.

Effects on eCommerce

Although this new rate increase on inbound shipping costs does not create equality between foreign and domestic shipping rates, it could be an indication of a trend towards more equalized international rates among member nations. As the ongoing COVID-19 pandemic has led to an even heavier global reliance on eCommerce, this cost increase will most certainly be felt by foreign companies as well as their U.S. customers.

The U.S. presently sits as the largest importer in the world, and this change in inbound shipping rates is not limited to just China. The U.S. is discussing new rate arrangements with numerous other countries and beginning in 2021, all other countries participating in the UPU will be able to determine their own rates for inbound shipping. American eCommerce, fulfillment, and warehousing businesses are keeping a close eye on this developing situation while one thing remains certain: the global cost of shipping in and out of the U.S. is certain to rise.

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USPS Increases Rates for International Shipments

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USPS Hikes Rates

Discord in the UPU

Effects on eCommerce