Prices will increase in July next year! The United States and the Postal Union reached a new agreement

▲The Geneva Special Meeting

Yesterday (25th) at the Universal Postal Union special meeting held in Geneva, Switzerland, the conference passed a resolution on the reform of international mail rates. The US representative immediately stated

In the previous article, I also analyzed that the US’s demands are actually asking the Postal Union to cancel China’s postal privileges (as a developing country, we enjoy postal terminal fee subsidies according to the Postal Union’s policies).

Because the Trump administration believes that a large number of Chinese goods rely on this subsidy to be sold to the United States at a lower price, making American products unpopular, it is not hesitant to threaten the Postal Union with withdrawal.

Therefore, there is only one reason why the United States has decided not to withdraw now. The Universal Postal Union has compromised, and the newly formulated postal rate reform is definitely a policy that favors the United States.

Contents of the Agreement between the USPU and the Postal Union

This new reform does not directly cancel China's terminal fee subsidy qualification, but gives those countries that receive a large number of foreign mail and parcels the privilege of self-pricing. These countries can charge "self-set shipping fees" for foreign parcels that need to be delivered.

This "accepting a large number of foreign parcels" also has a standard, which is "countries (such as the United States) that import more than 75,000 tons of mail and parcels each year can set their own new rates. This policy will be implemented in July 2020." Please note that many media reported that the rate was 75 tons. Here is the original news from the official website to dispel the rumor.

7.5 tons per year is certainly a small amount for the United States, a major importing country. The postal parcels sent from China alone can reach this amount in two or three months.

Therefore, the United States has already taken control of the pricing privilege of postal freight rates. It will be able to increase postage for a large number of overseas packages in July next year. As for who this increase will target, I think everyone should be able to guess it right away.

So the postage will definitely increase in July next year. What impact will it have on us Amazon sellers?

Impact of Postal Terminal Fee Increase

The spokesperson of the United States clearly stated that the increase in terminal fees is for parcels weighing less than 4.4 pounds (about 2kg). The United States will formulate and announce its own rates in June next year. The freight rates for these parcels will increase significantly, eliminating the price gap between low-priced products and domestic products in the United States.

FBA sellers will not be directly affected much, and the increase in postal costs will implicitly increase the overall logistics costs to a certain extent. However, this impact is not very obvious and will only be apparent after the new rates are implemented for some time in July next year.

Those who are most affected will definitely be the self-delivery sellers who use postal parcels. The increase in terminal fees will raise the logistics costs of these sellers. The extent of the increase will depend on the rates announced by the United States in June.

There are still many sellers who are using this low-price, low-cost, postal parcel method. The profit margin of this method is actually very limited, and they dare not increase the selling price easily. Once the price is raised, the traffic will drop significantly.

This increase will not be a short-term situation, but an irreversible increase. These sellers need to transform to a more refined route with higher profit margins as soon as possible. I have prepared a refined operation skills package for everyone. You can scan the code to find me to get it~

PS. If you want to join the seller discussion group, you can also private message me to let me add you to the group