Fair Competition in International Shipping

PURPOSE:

To examine the Universal Postal Union (UPU) terminal dues rate setting structure and process to better understand the challenges facing the United States, the inequities that result from the current system, and opportunities for reform.

BACKGROUND:

Established in 1874, the UPU coordinates international postal policies and procedures in an effort to guarantee mail service around the world.

The UPU sets terminal dues, which are the fees that postal operators pay each other for the domestic delivery of inbound international mail.

The terminal dues system has fallen far short of its goal to achieve a system where the fees charged are roughly equal to the cost of delivery.

A 2014 Postal Regulatory Commission study found a number of market distortions that stem from the terminal dues structure; distortion that could create situations where it is cheaper to mail items from China to the United Sates, than within the same state.