As was detailed in the March 5 issue of HomeWorld Business, small-parcel delivery from the U.S. Postal Service, in compliance with rules set by the Universal Postal Union, can weigh heavily in the favor of overseas shippers versus those in the U.S., and now more is being done to correct that inequity.
Both rules developed under the auspices of the UPU, an international organization that regulates cross-border mail fees for participants including the U.S., and shipping subsidies provided by China have become an issue within the housewares industry and Congress. Among the goals of those trying to set a level playing field between foreign and domestic small parcel shippers who use the postal service has been gaining the assistance of the President’s office.
The International Housewares Association is among several organizations that has pushed for more federal action, and IHA has alerted members that the administration has taken steps. On August 23, IHA has been telling members, President Donald Trump signed a Presidential Memorandum addressing the issue of terminal dues, a key element in international small package delivery regulation, that for packages under 4.4 pounds, gives shippers from some countries, especially factories in China, a rate advantage.
The memo recognizes the damage done to American business under current USPS practices, offers a policy for reform and timeline for progress.
Posted online, the memorandum “Modernizing the Monetary Reimbursement Model for the Delivery of Goods Through the International Postal System and Enhancing the Security and Safety of International Mail,” recommends that reform include the possibility of self-declaration of rates beyond the UPU regulations if sufficient progress is not made by a determined deadline.
The administration directed the memorandum to the Secretary of State, Secretary of the Treasury, Secretary of Homeland Security, Postmaster General and chairman of the Postal Regulatory Commission.
The UPU will meet in Ethiopia next month and the memo directs U.S. negotiators to reform terminal dues rates to fully reimburse the USPS for costs as reflected in domestic small package shipping rates for comparable services and avoid preference both for inbound foreign small packages over domestic mailers and for foreign packages that favor postal operators over private sector entities.
“We applaud President Trump for recognizing the unfairness of postal shipping rates as currently charged,” said Phil Brandl, IHA president and CEO. “The inequities of Chinese factories being subsidized while U.S. companies paying full price needs to be addressed. We look forward to the implementation of his reforms and a level playing field for all.”
Jayme Smaldone, founder and CEO of Mighty Mug, helped alert the housewares industry about inequities in small-package shipping. Smaldone helped prompt action in Congress as well as the housewares industries. For his efforts, HomeWorld Business named Smaldone as one of its Players, people to watch in 2019. Earlier this year, in an interview with HomeWorld Business, Smaldone said that postal practices for international small-package shipping has myriad negative implications including facilitating the introduction of counterfeit products into the U.S.
Among the actions Smaldone help initiate was the introduction of a bill in the U.S. House of Representatives, H. R. 5524, the Packages Overseas Subsidy Termination Act, sponsored by Rep. Kenny Marchant of Texas. It calls for the Postal Regulatory Commission to establish rates that ensure parity between domestic and international shippers and moves to level the playing field for American small businesses competing in the global economy.