International Postal Services to US Face Major Disruption Over New Tariffs

International Postal Services to US Face Major Disruption Over New Tariffs

A significant number of global postal operators, specifically 88 of them, have reportedly suspended their services for mail directed to the United States. This widespread suspension is a direct response to new tariffs implemented by the U.S., which have drastically altered the financial landscape for international mail delivery. The information comes from the United Nations' specialized agency responsible for global postal cooperation, the Universal Postal Union (UPU).

The impact of these service suspensions is substantial, with reports indicating that global postal traffic heading to the U.S. has seen a collapse of over 80%. This dramatic decrease highlights the severity of the dispute and the challenges faced by postal services worldwide in adapting to the revised fee structure.

The Core of the Dispute: Terminal Dues

At the heart of this issue are what are known as "terminal dues." These are the fees that a postal service in one country pays to a postal service in another country for delivering international mail once it reaches its destination. Historically, these rates were set through agreements within the UPU, often favoring developing nations by allowing them to receive more than they paid for delivering mail from wealthier countries.

However, the United States expressed concerns that the system was outdated and resulted in U.S. postal operators paying disproportionately high fees to deliver mail originating from other countries. In response, the U.S. decided to implement its own, self-declared rates for incoming international mail, rather than adhering strictly to the UPU's agreed-upon system. This unilateral move aimed to rectify what the U.S. perceived as an unfair cost burden.

Global Operators Respond to Increased Costs

For many international postal operators, the new U.S. tariffs have made the cost of sending mail to the United States financially unviable. The increased fees mean that the revenue generated from sending a package or letter is now outweighed by the cost of having it delivered within the U.S. Consequently, a large number of postal services have made the difficult decision to temporarily halt their operations to the U.S. to avoid significant financial losses.

This situation has created a logistical challenge for consumers and businesses alike who rely on international mail for various purposes, from personal correspondence to e-commerce shipments. The ripple effect extends across multiple industries, affecting supply chains and global commerce.

What happens next

The Universal Postal Union typically works to maintain a unified postal territory and facilitate the smooth exchange of international mail. This current disruption puts pressure on the international community to find a resolution that addresses the concerns of the U.S. while also ensuring the financial viability of postal services for all member countries. Discussions and negotiations will likely continue within the UPU framework to reach a mutually acceptable agreement, which could involve adjustments to the terminal dues system or alternative compensation models.