THE TRANSATLANTIC MAGAZINE
On July 1, the cost of mailing parcels to the USA increased substantially. Since those price increases came into play, we've heard from businesses and consumers on both sides of the pond who have experienced difficulties. For American consumers, the increased postage cost when ordering items from the UK has made the process prohibitive, with some reporting cases where the cost of postage is now more than the cost of the item they're purchasing. For UK businesses, the price increases have exacerbated difficulties already encountered due to the pandemic.
To better understand the situation, we spoke with Guy Cliffe, Sales Director at UKP Worldwide, a firm that specializes in global parcel mailing, to find out the state of play, and what businesses and consumers can do about the price rises.
Why will businesses outside the US have seen an increase in mailing costs to America since July 1st?
Recent changes imposed during the last Universal Postal Union (UPU) meeting resulted in the US Postal Service self-declaring their own rates from July 1st, which has meant significant price increases for other countries posting mail – particularly eCommerce – to the US. The US took this action to discourage unfair practice where goods sold from China could be shipped to the US cheaper than shipping domestically from New York to Texas, the idea was to balance the field of play, this has had a dramatic effect on postal rates when shipping to the US.
By how much have the prices gone up?
Some suppliers have seen increases of more than 50%, however, this does depend on the individual services being used as not all services have increased by the same amount.
What will be the impact on Americans ordering in products from overseas businesses?
Unfortunately, in most cases these increased shipping costs will be passed onto the customer to pay whilst ordering. Especially with the recent pandemic, it is very unlikely an online merchant will be able to absorb the increased shipping costs.
Although we know this is impacting UK to US mail, is it likely to impact UK mail to elsewhere in the world?
The changes implemented by the UPU is likely to affect post offices around the world, however, we are unsure what this effect will be at present.
Does it impact US to UK mail?
Like all local post offices, the United States Postal Service (USPS) implement increases from time to time, however, we have not heard this being a dramatic increase when shipping items to the UK from the US.
UKP Worldwide has a specific service for businesses who mail parcels to America regularly, can you explain who can use your service and what it does?
This service is designed for businesses who regularly ship volumes of mail to the US – this could be an online merchant/retailer, it could be a mailing house, etc. We offer a direct injection of mail items shipped from the UK and EU to the US, delivered on a tracked service within 7-10 working days.
Will businesses using services like yours be able to pass savings on to customers?
Put simply, yes. It's not unusual for smaller online businesses to be shipping their products on a Royal Mail service. Due to UKPW being based in the UK and in the US, we have access to local USPS services which can't be accessed without being based in the US. This allows us to inject mail items on a direct service at a reasonable cost.
Do you have any tips for those who are mailing parcels to the US on an individual basis?
Where possible, plan and ship items on a lengthier service to save money. Depending on the weight and size of your item try and get comparison costs from different services. On occasion, it might be cheaper to send something on a courier service rather than using Royal Mail Air.
What's in store for consumers and businesses going forward with this price rise and the ongoing Coronavirus pandemic?
Unfortunately, both the UPU changes and the pandemic have had a dramatic effect on shipping rates. With reduced passenger jets, airspace has become a competitive market which has resulted in both delays and price increases, as all suppliers try their best to get their goods on the planes. The good thing is I believe we are over the worst and things are starting to settle a little. As we have all seen we have lost some major names over the last six months, some businesses may have been already struggling but the pandemic just tipped them too far and they were not able to recover.