Cross-border shipping rates will go up for many U.S. shippers on July 1. This change comes after countries began to self-declare postal rates based on the deal reached by the Universal Postal Union (UPU) in September, Supply Chain Dive reported.
Many postage sellers, consolidators and other cross-border service providers such as FedEx, UPS and Stamps.com, received new contracts from USPS last month, but many haven't yet alerted shippers of the change. Without direct communication from service providers, shippers may be confused when their rates go up, unsure what the increase is for. Supply Chain Dive reported that any business that is a bulk cross-border shipper will see a rate increase.
The timeline for self-declaring rates doesn't align with the usual January USPS contract renewals, so contract rates won't match with the visible retail rate increase at the post office. Therefore, shippers are waiting on some type of communication from USPS to explain more details.
According to Supply Chain Dive, the July 1 implementation date was mandated in the approved UPU deal. It's estimated that the USPS inbound rate from China will go up 100 percent or more from the existing rate, and the U.S. rate to Canada will increase 50 percent.
Total Retail's Take: A shipping rate increase is never good, but especially not while we're in the middle of a global pandemic and the U.S. economy is in a recession. Increases of 50 percent to 100 percent or more from the existing rate is definitely a concern for retailers, especially those that are increasingly relying on e-commerce sales, including cross-border transactions, as they begin to reopen brick-and-mortar stores following the COVID-19 pandemic. This news from the USPS comes on the heels of announcements from UPS and FedEX that the carriers will be increasing rates for certain shippers. While e-commerce sales are on the rise, soon too be will be the cost to get orders to customers.
Related story: FedEx Adds Delivery Surcharges to Combat Coronavirus Surge
Ashley Chiaradio is the Senior Content Strategist at Total Retail. Ashley has been creating content for more than 7 years, and provides a unique insight in covering the retail industry having worked directly for retailers in the past. She’s passionate about profiling women leadership in the space.