PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Advocate for Entrepreneurs and Small Business Applauds President Trump’s Action on Global Shipping Rates

By at 17 October, 2018, 11:51 am

…says current international system is “indefensible” and Trump’s action a “huge win for American small businesses”

FOR IMMEDIATE RELEASE

Washington, D.C. – Today, the Trump Administration announced forceful action to address the disparity in global postal rates paid by U.S. businesses, which especially undercuts small businesses. The Small Business & Entrepreneurship Council (SBE Council) praised the long-overdue action, and said President Trump’s announcement that the U.S. will pull out of the international system that sets shipping rates (terminal dues) is the right thing to do.

SBE Council president & CEO Karen Kerrigan said:

“The big disparity in shipping rates directly hits our small businesses. President Trump’s action today is a huge win for American small businesses. Our entrepreneurs have to compete on many fronts that impact costs, and shipping rates are a big one. Why past U.S. negotiators and our own Postal Service would allow this to continue for so long is indefensible. Thankfully, President Trump and his team have taken very strong action to make this right and move us into the 21st century global economy.”

Current terminal dues rates set by the Universal Postal Union (UPU) and provided by the United States Postal Service (USPS) to foreign shippers have resulted in a severe competitive imbalance that gives these shippers favorable rates for packages sent into the U.S., which happen to be far lower than what U.S. small businesses are charged to ship packages domestically.

The U.S. is part of the UPU, the international body that sets terminal dues. These are fees that postal operators pay each other for the domestic delivery on inbound international mail. Current pricing procedures not only put small businesses at a competitive disadvantage, but also reportedly create a loss for the USPS. Previous representatives from the U.S. State Department who have engaged in these negotiations have not been adequately instructed by the Postal Service leadership to achieve parity for our businesses, or even revenue neutral results for the USPS.

On August 23, President Trump signed a Presidential Memorandum that directed the U.S. Secretary of State, Secretary of the Treasury, Secretary of Homeland Security, the Postmaster General and the Chairman of the Postal Regulatory Commission to focus on this issue at the September 2018 meeting of the Universal Postal Union.

The action taken today by the Trump Administration through U.S. State Department officials will inform the UPU of U.S. intention to pull out of the system and “self-declare” new rates.

Kerrigan added:

“President Trump’s action today is great news for American small businesses. This wacky system forces our small businesses to pay higher shipping rates than foreign competitors, subsidizes shipping costs for our competitors, enables intellectual property theft and counterfeiting, all the while exacerbating the challenging financial condition of the U.S. Postal Service. Small businesses are grateful for the leadership of President Trump and the work of his team.”

Read background on the UPU and terminal dues here.

Learn more about the secretive price setting and the UPU in this August 1, NPR Planet Money episode: “The Postal Illuminati”

 

Related SBE Council Content:

SBE Council Applauds President Trump’s Action on Unfair Shipping Rates for U.S. Small Businesses, Press Release, August 24, 2018.

Comments to the Postal Regulatory Commission on Shipping Rate Parity for Small Businesses, July 2, 2018. 

Comments to USPS on Unfair Advantage Foreign Shippers Have Over U.S. Small Business, February 20, 2018. 

Postal Service Needs to Get Back to Basics, Kerrigan Op-ed in Morning Consult. 

CONTACT:  Karen Kerrigan

kkerrigan@sbecouncil.org  

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years SBE Council has worked to successfully implement a range of policy and private sector initiatives to strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: www.sbecouncil.org. Follow on Twitter: @SBECouncil 

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