The cost of sending bulk low-value, lightweight goods internationally will go up for some shippers next month. The USPS is lowering the discounts in contracts with consolidators that have Negotiated Service Agreements for International Priority Airmail (IPA) letters and International Surface Airlift (ISAL), according to USPS spokesperson David Partenheimer.
USPS IPA and ISAL are services offered to shippers through third-party companies known as consolidators and are popular with some online merchants. By having the shipping company consolidate their packages with those from many other shippers, sellers can take advantage of the bulk rates.
So while the change rolling out next month could be significant, it will not affect single-piece users or those who want end-to-end tracking and shorter delivery windows than ISAL offers.
“The Postal Service will be renewing contracts for the international shipment of bulk, low-value, lightweight goods for high volume shipments, many of which have been in place for over 1 year,” Partenheimer said.
He confirmed that the USPS is reducing the discounts it offers for ISAL packets. The changes take effect August 20, 2017, and not surprisingly, consolidators are raising rates accordingly for their shipping customers.
Partenheimer said, “The agreements are negotiated individually on an annual basis. The increase was planned to coincide with the scheduled contract renewals which expired in June however an additional 7 weeks was granted to allow for coordination of technology changes and client notification. The decision made to modify the contracts to reflect shape based pricing reflects our legal and fiduciary responsibility and provides mailers options for both pricing and service levels.”
One source told us some sellers use consolidators to send low-value items internationally, saying those shippers are satisfied with the 1-2 weeks it generally takes to get to their destination. “ISAL has no dimensional or DIM charge and is attractive to the small box shippers.” As a result of next month’s changes, consolidators may be looking to foreign postal services that have operations in the US for alternatives.
Kate Muth, Executive Director of International Mailers Advisory Group (IMAG), said her organization worked hard to convey to the Postal Service that business shippers need annual, predictable changes. IMAG wanted the USPS to push off the contract changes until January. The mid-year rate change is disruptive, and shippers hadn’t budgeted for the higher costs, she said.
Muth said IPA and ISAL are both popular ecommerce mailing services and used heavily by sellers on ecommerce platforms.
This article first appeared in the July 13th issue of EcommerceBytes 411.