International Mailers Will See Higher Rate Increase

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Direct marketers who send mail abroad are concerned that the U.S. Postal Service's rate increase for international mail -- expected to take effect by April -- is much higher than the increase most domestic mailers face next month.


The Postal Rate Commission's proposed 3.3 percent rate increase is not the full story, sources say.


"International rates appear to be going up more rapidly than domestic rates," said Jerry Cerasale, senior vice president of government affairs at the Direct Marketing Association. The 3.3 percent increase is consistent only for domestic rates, he said.


On Dec. 1, the USPS filed a Federal Register Notice stating that basic rates for its Global Package Link service -- an international mail service for companies sending at least 10,000 packages a year to Canada, Brazil, China, France, Germany, Hong Kong, Japan, Mexico, Singapore and the United Kingdom -- will increase 9 percent because of declining economic conditions and rising costs.


"Sadly, this is a 9 percent rate increase, which is significantly larger than the rate increase that most domestic mailers will face on Jan. 10," Cerasale said.


Air-letter mail sent to Canada will cost more than mail sent to other parts of the world, one source said. Canadian postal authorities will increase delivery charges, and Canadian air-letter mail rates -- which will increase by 5 percent -- is the only U.S.-to-international air-letter mail category to increase. Air-letter mail makes up nearly 60 percent of the total U.S.-to-international volume.


The USPS said that these rate increases are justified because they accommodate changes in the cost of providing international mail service, but said that they are negotiating with Canadian Postal Authorities.


"We will do our best to work out a better arrangement with them," said Robert Edwards, manager of business results at the USPS' international business unit.


The USPS also proposed a new pricing structure for rates -- offering both standard and premium categories -- and a new volume discount program for mailers that send at least 25,000 packages per fiscal year. Currently, mailers can only qualify for a volume discount if they send at least 100,000 packages overseas. It plans to change country rate groups for International Priority Airmail Service so it is aligned with the newly revised International Surface Air Lift Service.


If the USPS' ruling is passed, both services will have the same rate structure and preparation requirements, and both will be available at all bulk mail entry units.
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