International Shipping and Mailing Changes
Big Changes are coming in international shipping and mailing. The last Extraordinary Postal Congress ended with a compromise known as Option 5. The new deal that will allow the USPS to set its own postal rates starting in July of 2020. The other 191 countries will start setting their rates the following year, and there will be another five years of rate changes to follow. Perhaps you’re wondering what this may mean for your business’s international mailing rates. Inevitably things are going to change, and for the first year it may be a great boost to US eCommerce businesses. But what about when other countries start changing their rates too?
New UPU Agreement Good for USPS
First and foremost, the new UPU agreement will certainly help the USPS and US eCommerce business who have both been losing business to Chinese companies. China has long benefited from low labor costs, a lack of intellectual property rights, and mail service largely subsidized by importing countries. The USPS has been losing roughly $1 on every eCommerce package from China. US companies have been paying higher rates to ship domestically than their Chinese competitors have to ship internationally from China. Under the new agreement importers are able to charge up 70% of the domestic rate initially continuing up to 80% in the future. This should make it more expensive for Chinese importers to send goods to other developed countries. But what does this mean for consumers?
US Consumers Will Be Paying More
In short, everything will cost US consumers more. Products from China will see not only increased prices from higher tariffs but also increased international shipping and mailing rates. This makes domestic products more competitively priced, but there are some things that just aren’t made in the US. Ideally, this leads to more US manufacturing, but already US importers are warehousing foreign manufactured goods and mailing them at the domestic rate. Chinese companies have been offsetting increasing costs by devaluing their currency and could potentially ship from neighboring countries subject to lower rates and lower tariffs. So, in the short term, Americans are going to pay more for products they’ve been buying affordably for years. But what about US exporters?
US Exporters Rates Increase
US exporters have seen increasing rates for decades. Worst of all, retaliatory tariffs from foreign countries have driven international shipping and mailing costs up even more. Hopefully, they’ll see some relief in 2020. The new postal agreement levels the playing field a little for companies wanting to expand overseas. Also, thanks to the increasing strength of the US dollar some international shipping and mailing costs have gone down. Lastly, there are some alternative shipping and mailing methods that US businesses can take advantage of.
Alternative International Shipping and Mailing Services
The most affordable alternative for international shipping and mailing is using a direct entry service. Using a network of international mailing hubs to directly enter mail into the postal systems of foreign countries you can take advantage of unique postage savings opportunities offered by each postal administration and strategically dispatch your international mailing quickly at a significantly lower cost. The service also gives your mailing campaign the benefit of having a local or regional touch. While there are some uncertainties on the way, savvy business owners can always find a way to save money. If you would like to learn more about some money saving options please visit us at AtlasIntlMail.com or call 800-852-0889