The U.S. Postal Service has changed its classification system for international products from a content-based system to a speed-based system. The old content-based system allowed in customers to ship an item weighing up to four pounds at least 12 different ways. This resulted in rates that were sometimes higher for slower services than faster services, which cause plenty of customer confusion. The USPS now provides customers with simple choices to ship internationally, based upon price and speed. The current changes also include rate increases to cover the 15% increase in our foreign delivery costs, called terminal dues, which resulted from the Universal Postal Unions (UPU) Beijing Congress. These changes went into effect this past January. The overall rate increase was 5.8%. The changes were implemented in conjunction with domestic rate changes on January 7, 2001. The new restructured line of international mail has five product lines:
Global Express Guaranteed
Global Express Mail
Global Priority Mail
Global Air Mail: letter-post and parcels
Global Economy: letter-post and parcels
The USPS eliminated content distinctions by merging the air letter class, other articles and small packets into letter-post. The 1/2-ounce single piece letter rate was replaced with a one-ounce rate, mirroring the domestic rate structure. The 60-cent rate for 1/2-ounce and one dollar for an ounce was replaced with a new rate of 80 cents for one ounce. Also introduced was a North American rate for Canada and Mexico of 60 cents. Rates for more than one ounce go up for each additional ounce and are aligned in new rate groups, which reflect the changes in UPU terminal dues and structure.
Also, the AO structure was eliminated. Shippers can now send printed matter and small packets as letter-post, either as Global Air Mail or Economy. For Economy, rates start at one pound to prevent rate crossovers with Global Air Mail. Books and sheet music were moved from retail to commercial entry to eliminate content distinctions at retail. Rates for publishers periodicals were increased as well.
Parcel rates are currently priced so the fastest service is always the most expensive, the slowest always the cheapest rates for Global Express Mail were increased by 4.9% and Air Mail Parcels were increased by 1.6%. These increases are below inflation. Economy Parcels prices start at five pounds, so there is no crossover with Air Mail Parcels. As part of restructuring, Global Package Link was eliminated. The USPS proposed in the March 8 Federal Register that the threshold to qualify for International Customized Mail (ICM) agreements for parcels be at least 600 packages or $12,000 in international parcel postage annually.
For commercial products, International Priority Airmail (IPA) and International Surface Airlift (ISAL) rates were increased on average by 8%. Some rates go up and some go down, depending on the weight and destination country. There are now three per piece charges: $12, $20 and $25. The number of rate groups was increased from four to eight. These changes reflect the cost changes in the new terminal dues structure of industrialized and developing countries. Rates for IPA to Europe were decreased, while rates for IPA and ISAL to other areas were increased. Rates for lightweight (two ounces or less) IPA and ISAL items to Western Europe and heavy weight (eight ounces or more) ISAL items to Japan were decreased and all others were increased. The discount structure remains the same and the threshold to qualify for ICMs for letter-post remains at two million dollars or one million pounds of international mail annually. ISAL to Canada was introduced and Value Post/Canada was eliminated. This allows customers to send letters as IPA and printed matter as ISAL worldwide. Customers can now treat mail the same, no matter where it is going in the world. The new weight limit for IPA and ISAL is four pounds. M-bag service, which is like a firm pouch, now has a minimum weight of 11 pounds. And, customers can send merchandise in an M-bag, which is related to advertising and printed matter.
Bob Michelson is manager of International Marketing for the USPS. For additional information, visit www.uspsglobal.com.