Small packages from China (and elsewhere) delivered to shoppers by the US Postal Service will become more costly for overseas sellers, helping to level a playing field that many domestic online sellers feel is skewed against them.
At first blush, it looks like small US sellers will be rejoicing, since in many cases it costs them more to send a similarly sized parcel to a US buyer than it costs a Chinese seller/shipper - for packages weighing under 4.4 pounds.
It could have a negative impact on eBay and Amazon, however, whose platforms are attractive to international exporters sending goods to the US; though keep in mind that eBay CEO Devin Wenig said
in November that his company helps Chinese sellers warehouse goods in the United States.
The change came not from the international organization that sets "terminal dues" (the UPU), but rather, from the US Postal Regulatory Commission (PRC).
In November, the USPS filed a request with the PRC to change how it classifies Inbound Letter Post small packets and bulky letters, known as Inbound E format, asking permission to move it from "Market Dominant" to a "Competitive" product.
Today, January 9, 2019, the PRC conditionally approved the request.
The USPS had written in its request, "Upon favorable review of this request, the Postal Service will submit a new filing to set new rates for inbound international market dominant and competitive services, subject to PRC review and approval," so don't expect an immediate change in rates.
While the UPU was already making progress on making terminal dues more equitable, President Trump's August memorandum
gave the issue urgency. Today's announcement doesn't change the Administration's decision last October to withdraw from the UPU.
It's unclear from today's PRC ruling what the impact will be on "ePacket" rates which are negotiated between international postal services. For example, China Post and the USPS have agreed on ePacket rates that include tracking, which postal products under terminal dues do not.
It's also conceivable that foreign posts such as China Post could choose to subsidize the higher costs for sellers who export to the United States.
It will be interesting to see what shipping experts have to say in the coming days, but for now, US sellers have reason to believe that the shipping-cost playing field will soon become more level.
Also sure to be welcoming today's news: shipping carrier UPS, which pushed for the change.
PS: One other note: The USPS has greater flexibility to raise rates for products classified as competitive than those classified as market dominant.