International Mail And Postal Practices: A Recap Of Notable Recent Developments

There have been several significant developments on international mail and postal delivery in the past year.

Opioids in the Mail

Due to the opioid epidemic in the United States, there is significant and growing pressure to scrutinize all in-bound mail from China via advanced electronic data (AED). In Congress, a bipartisan measure, the Synthetics Trafficking and Overdose Protection Act, a.k.a. The STOP Act, would tighten security on drugs in international mail shipments by requiring seven AED information points. With this data, law enforcement would be better able to identify and confiscate fentanyl and related narcotics.

President Donald Trump’s drug abuse commission explicitly endorsed this measure. In 2017, former Homeland Security Secretary John Kelly and incoming Homeland Security Secretary Kirstjen Nielsen, both testified that the measure would be helpful in curtailing drug inflows. Introduced by Senator Rob Portman (R-OH) and Senator Amy Klobuchar (D-MN), The STOP ACT has 29 Senate cosponsors and 252 cosponsors in the House.

The U.S. Postal Service opposes the measure while acknowledging it receives inbound AED on 40 percent of shipments. There has been increasing pressure on the Postal Service to work more closely with U.S. Customs and Border Protection to increase drug interdiction.

The leaders of the Senate Homeland Security and Governmental Affairs Committee have also been closely monitoring cooperation between the Postal Service, Department of Homeland Security and the State Department to prevent synthetic opioids from entering the United States.

Terminal Dues

On January 1, 2018, the new payment system on terminal dues, formulated by the Universal Postal Union in the Fall 2016, went into effect. Terminal dues is the system by which post offices in different countries divide up the revenues from international mail, defined as all items up to 2 kilograms or 4.4 pounds.

Most notably, the price for small packages sent from China to the United States increased 13 percent as of January 1, 2018, and will increase 13 percent more each year from 2019-21. This comes at a time when there is growing scrutiny over terminal dues in the United States and other countries. Because of terminal dues, it costs less to send a small package from China to the United States than to send a package within the United States.

The U.S Chamber of Commerce is opposed to terminal dues in their current form and filed an October 16 motion with the Postal Regulatory Commission, requesting that documents about international mail be unsealed. The motion states, “The (U.S.) Chamber is increasingly concerned that U.S. merchants and manufacturers are placed at an economic disadvantage to foreign merchants and manufacturers due to artificially low rates paid by foreign shippers for delivery of their merchandise within the U.S. at rates not available to domestic shippers.”

The Canadian Parliament has also taken notice of terminal dues. In evaluating steps to promote e-commerce, both liberal and conservative members have expressed strong concerns about low postal rates from China and their impact on Canadian businesses. These matters were addressed at a trade committee hearing where Canada Post outlined the upcoming terminal dues price increases. There is also concern that Chinese e-commerce companies are often evading taxes and duties.

On a related note, rigorous inspections by Canada Post and the Canada Border Services Agency of e-commerce from China has resulted in some customers having to wait months for packages. CBC News reported this continued to be a problem during the recent Christmas season.

Royal Mail Strike

In the United Kingdom, mediation continues between Royal Mail and the Communication Workers Union (CWU) to halt a potential strike and to reach agreement on retirement and other issues. A court injunction prevented an October 2017 strike.

The central issue pertains to Royal Mail’s proposal to close the defined benefit or pension program in April 2018. Royal Mail is a for-profit business, traded on the London Stock Exchange. Since December, both sides have spoken positively about developments in negotiations.

Drones

Drone delivery, which could potentially revolutionize postal delivery, is now a reality in some places.

Since March 2017, Swiss Post has been using drones to deliver laboratory samples

between two hospitals in Lugano, a city along the Italian border. Swiss Post is also using drones to make deliveries for Jelmoli, a premium department store, within the City of Zurich.

Japan Post plans to use drones for transportation from post office to post office, and possibly also for home deliveries. It believes drones will significantly cut costs and expects they will be widely used in cities by the 2020s.

Japan Post is also testing self-driving cars.

Other Significant Technology Deployments

Another intriguing and potentially far-ranging development, is the introduction of digital address systems.

Mongol Post faces significant delivery challenges as the country is geographically large, sparsely populated and a quarter of the country’s citizens are nomadic. In June 2016, NPR reported that the Mongolian government has partnered with a British startup, What3Words to overhaul its postal and address system. Each 9-square meter plot of land receives its own three-word identifier.

The Financial Times reports the system has been successful, especially for package deliveries which were previously often returned. Similar digital address systems have been implemented since 2016 in Sint Maarten, Djibouti, Solomon Islands, Ivory Coast, Tonga and Nigeria.

India Post has also launched a pilot project to provide six-character alphanumeric digital addresses. A private mapping company has been hired.

Banking Developments

Many postal services also provide banking and other financial services.

On January 1, 2018, the South China Morning Post reported that China’s Postal Bank was fined $80 million by the Chinese government for fraudulent bond guarantees.

India Post plans to enter the banking sector by providing savings and insurance services at 650 branches, as reported by the Times of India on November 20.