UPU: Volume of parcels to U.S. plummeted 81% on day of small package tax exemption suspension in late August

UPU: Volume of parcels to U.S. plummeted 81% on day of small package tax exemption suspension in late August

The Universal Postal Union (UPU) reported a significant drop in postal traffic to the United States following the suspension of the small package tax exemption on August 29. According to the UPU, traffic to the U.S. plunged more than 81 percent on that day, compared to the previous week [1].

This dramatic decrease was due to the U.S. government's decision to abolish the tax exemption on small packages entering the country. The move has led to 88 postal operators worldwide fully or partially suspending services to the U.S. [1]. These operators include those from 78 UN member states and nine other territories, such as Macau and the Cook Islands [1].

The UPU is currently working on a new technical solution to facilitate mail movement to the U.S. again. The agency is developing a "Delivered Duty Paid" system that will be integrated into its customs declaration platform, enabling post operators to calculate and collect required duties from customers at origin [1].

In the interim, the UPU has made a calculator available to postal operators via a software interface that can be integrated into their retail and counter systems [1]. The agency has also written to the U.S. Secretary of State, Marco Rubio, to convey member countries' concerns regarding the disruption caused by the tax exemption suspension [1].

The UPU figures indicate that over the past 12 months, inbound traffic to the U.S. comprised 15 percent of global postal traffic, with 44 percent originating from Europe, 30 percent from Asia, and 26 percent from the rest of the world [1]. The majority of this traffic is likely to be small packages, the international mail product most commonly used for e-commerce goods [1].

References:
[1] https://sg.news.yahoo.com/88-postal-operators-suspend-services-133013794.html