Lack of Transportation Impacting International Mail

The article below was produced by Merry Law, Mailers Hub’s expert, and consultant on international mail. Merry may be reached at [email protected].


COVID-19 closures, lack of transport capacity, self-declared inbound rates, expiring USPS consolidator contracts, no bilateral agreements with other countries: Taking this a piece at a time can make sense of what is happening, who it affects and how. Let’s start with the more temporary effects of the current pandemic crisis and move on to the longer-term matters.

Essential service

Unlike the US, some countries do not declare their postal services as essential. In others, delivery has been curtailed. The USPS has stopped accepting mail to some destinations. (Fortunately for Mailers Hub subscribers, all such information is available online on the COVID-19 resources page.)

Some of the closure orders in other countries were due to expire in late May or will expire in early June; many have been or may be extended. Caution still will be needed after restrictions end because delivery networks will take time to come up to full capacity and delays will continue for some time. (Check the COVID-19 resources page as updates are announced.)

Transportation

Along with shutting down some postal services around the world, the pandemic has severely curtailed international flights. With the exception of 

Canada, international mail from the US is carried by passenger and freight flights. The mail to Canada, which normally travels by both trucks and planes, is now traveling by mainly truck. This creates delay since it’s obviously slower to drive to Canada than to fly there, but the mail is getting through.

 

Around the world, backlogs of outbound mail accumulated early in this crisis while USPS and other postal operators (and the rest of us) worked to deal with this fluid and exceptional situation. Internationally, mail has been stranded somewhere between the sender and recipient. In their recent report, The COVID-19 Crisis and the Postal Sector, the UPU states, “As of May 2020, for every 2.1 weekly items exported, only one has been notified as received.

Customs clearance slowed. Bilateral liaison offices closed. As international freight capacity decreased, costs increased. The USPS is purchasing capacity at premium rates that were not in budget projections, adding further to the USPS’s financial problems.

Some freight capacity has been available on flights, but it became insufficient as about 15,000 routes went down to 2,000 routes. USPS moved some mail consignments to charter flights and to ocean surface ships to clear the backlogs that were continuing to accumulate.

Five ships with mail to European destinations as a portion of their freight have departed for Rotterdam, the Netherlands. At least one more is planned. To give some idea of the volumes involved, the ship that departed on May 9 carried “24,013 receptacles in twenty-two (22) containers weighing 143,807 kilograms” according to the USPS. A fourth sea transport left May 20 “carrying an estimated 6,300 receptacles in six (6) containers weighing roughly 37,000 kilograms.”

The Atlantic crossing takes an estimated 3 to 3 ½ weeks, depending on weather and any delays in docking. During that time, there are no tracking events for the mail.

Looming short term issues

The pandemic will pass and mail will flow more normally. More immediate matters regarding USPS international mail will have longer-term effects on US mailers. The first, self-declared inbound rates for packages, will take effect on July 1; the second phase will occur in January 2021. With the introduction of self-declared rates by 31 countries, including the US, the USPS is instituting other changes to the handling of international mail.

The UPU report contains three longer term scenarios that are worth reviewing:

  • Scenario 1 (Pessimistic) – No recovery, opportunities not seized and acceleration of longterm decline;
  • Scenario 2 (Expected) – Eventual recovery, some opportunities seized but insufficient structural change;
  • Scenario 3 (Optimistic) – Swift recovery, opportunities seized and positive structural change.

Contracts for international mail consolidators expire at the end of June. New contracts were only recently finalized and pricing was just revealed to contract owners (consolidators), who generally need 30 days to notify their clients (mailers) of new pricing.

Although the USPS has announced it is not increasing the published postage rates for small package prices on July 1, they have said there will be no consolidator discounts for International Priority Airmail (IPA), which most commercial mailers use. With no workshare discount, consolidators will need to charge higher prices for affected products.

At the same time, some countries will no longer have a Commercial ePacket (CeP) product, so US mailers will not have that option in all cases. There are indications that international tracking may become more limited, based on statements by USPS staff. However, queries to the USPS to confirm this have gone unanswered.

The USPS continues to pursue bilateral agreements with other postal operators. Such agreements might allow tracking or reduced prices. However, as of June 1, there are no agreements in place.

USPS staff also say they are pursuing the “commercial solution” proposals solicited in 2019 when it appeared possible that the US would withdraw from the UPU. While details of a potential commercial solution are not known, mailers and consolidators hope it would lower postage or increase services. The COVID-19 crisis has posed problems for pursuing agreements aggressively.



During the COVID crisis, each issue of Mailers Hub News has a special section at the end containing USPS Industry Alert and DMM Advisory notices about international mail service.

Share this post:

Comments on "Lack of Transportation Impacting International Mail"

Comments 0-5 of 0

Please login to comment