Postal Services in Crisis: The Impact of New Tariffs on Mail to the U.S.
A Significant Decline in Postal Traffic
In a significant shift affecting global postal services, the Universal Postal Union (UPU) reported an over 80% plunge in mail traffic to the United States following the imposition of new tariffs by Washington. As of September 6, 88 postal operators from around the world have fully or partially suspended their services to the U.S. This disruption highlights the ripple effects of economic policies that not only influence trade but also the fundamental ways in which people connect across borders.
The Role of the UPU
The UPU, a specialized agency of the United Nations dedicated to international postal cooperation, is actively working to address this crisis. Its Director-General, Masahiko Metoki, emphasized the urgency of developing a new technical solution to resume postal services to the U.S. The organization has been at the forefront of dealing with the intricacies of global mail delivery since its establishment in 1874, and this situation poses a unique challenge, testing its capabilities.
What Sparked the Suspension?
The crisis began when the Trump administration announced the removal of a long-standing tax exemption for small packages entering the U.S., effective August 29. This policy change meant that customs duties would now be the responsibility of carriers or “qualified parties” approved by U.S. Customs and Border Protection. The immediate result was a wave of notifications from postal services in numerous countries—from Australia to Germany, and from Italy to Japan—asserting that they could no longer accept packages destined for the U.S.
Understanding the Data
According to the UPU, data exchanged between postal operators via its electronic network revealed an alarming 81% decrease in postal traffic to the U.S. on the very day the changes took effect, compared to the previous week. The swift response from global postal operators reflects widespread concern regarding the logistics and feasibility of continuing services under the new tariff structure.
Operational Challenges Ahead
The new U.S. regulations place a significant burden on transport carriers, many of which have expressed their unwillingness to absorb the complexities of customs duty collection. This has resulted in operational disruptions, particularly as postal operators have yet to establish necessary connections with approved parties. The impact has been profound, with 78 UN member states being affected, including regions like Macau and the Cook Islands.
The UPU’s Proposed Solutions
In an effort to remedy the situation, the UPU is working on a “Delivered Duty Paid” (DDP) solution, which aims to integrate with its existing customs declaration platform. This initiative is designed to allow postal operators to calculate and collect the requisite duties from customers at the point of origin, potentially streamlining the process for packages heading to the U.S.
As a temporary measure, the UPU has provided a software interface for postal operators, enabling them to access a calculator that helps estimate required duties, thereby facilitating smoother transactions during this transitional phase.
Concerns from Global Postal Operators
Mr. Metoki has conveyed the concerns of member countries to U.S. Secretary of State Marco Rubio, stressing the extreme upheaval posed by the new tariffs. The UPU has pointed out that inbound postal traffic to the U.S. constitutes approximately 15% of global postal traffic, underscoring the vital role that international mail plays in commerce and personal communication. In terms of origin, Europe accounted for 44% of this traffic, followed by Asia at 30%, with the remainder coming from other regions.
E-Commerce and Small Packages
It is crucial to note that the majority of the international mail contributing to this traffic consists of small packages, which have become essential in the age of e-commerce. This segment has seen explosive growth in recent years, and the abrupt halt in postal services could have detrimental effects on both consumers and e-commerce businesses relying on international shipping.
The ramifications of these new tariffs extend far beyond just postal transactions—they touch on personal connections and the global marketplace, showcasing how interconnected our world has become.