A study released yesterday by the Air Courier Conference of America, Washington, confirmed that the U.S. Customs Service fails to properly process the majority of express shipments entering the United States from other countries through the U.S. Postal Service, resulting in a loss to the U.S. Treasury of more than $1 billion.
The study, which was conducted by Wirthlin Worldwide, McLean, VA, strategic research and consulting firm, found that the USCS properly inspects and assesses duties and fees on only 6 percent of USPS shipments, while rigorously implementing these responsibilities for nearly 90 percent of the express shipments handled by private carriers, such as UPS and FedEx.
The study was presented at a press conference yesterday by U.S. Rep. Anne Northup, R-KY, a member of the house subcommittee on treasury, postal service and general government. Northup said she will be presenting study results to a House Appropriations Committee hearing on Friday where UPS and USPS representatives will be present. Insiders said that Northup often sides with the UPS on subcommittee matters since she oversees a district where a large UPS facility is located.
As part of the study, shipments of two identical sets of 90 dutiable packages were sent to the United States from Aug. 4-16, 1999 from 10 separate countries with the same destination address. Ninety packages were sent via the express mail service provided by foreign postal administrations with transfer either to USPS or to express carriers. The other 90 were sent via either UPS or FedEx.
The study found that the USCS properly entered only 6.3 percent of the shipments transferred to USPS, compared to 88.9 percent for similar shipments transported by private carriers. It also showed that when USCS properly enters USPS shipments, it collects much smaller amounts of duties than from private carriers.
“When it comes to the postal service, the customs service is turning a blind eye and compromising its critical enforcement and assessment mission,” said Joe Morris, executive director at ACCA, which represents the air express industry. “This study starkly illustrates a Customs process that creates a huge competitive disparity for private carriers [and] costs the American taxpayer.”
While the study aims to show the government that its second-largest source of income — the USCS — is failing in its obligation to collect all applicable duties and fees resulting in revenue loss to the U.S. Treasury, it actually gives overseas direct marketers shipping merchandise or direct mail to the United States an incentive to use the USPS vs. other carriers.
While many major mailers are aware of these issues, many smaller international companies just starting to send merchandise to the United States may not be.
The Wirthlin study details and supports similar findings found in a 1998 report requested of the USCS by a House/Senate Treasury-Postal Appropriations Conference Report. That report indicated that private carriers were required to abide by 11 of the reviewed customs regulations, while the USPS had to comply only with two. It further showed that the USPS is exempt from providing manifest information to the USCS; keeping extensive U.S. Customs-ordered records; and reimbursing the USCS for services provided.