Small Steps Taken To Open UPU to Private SectorNovember 21, 2022
Soccer might be the most popular sport in the world, but American football is probably a better analogy to describe the Universal Postal Union’s recent efforts at opening itself up to the private sector. Football is, after all, a game of inches. And it seemed to many in attendance that the Universal Postal Union’s October 27 Conference on Postal Regulation helped move the ball a bit in efforts to shape proposals for the October 2023 Extraordinary Congress aimed at engaging in “further reform and opening of the Union to wider postal sector players (WPSPs).”
The Davos-style forum on October 27 allowed for a candid exchange of ideas among the private sector, designated operators, governments, and regulators. Split into two panels – the first on reform of the overall Union and the second on access to UPU products and services – this open exchange led to lively debates on how to give voice to private-sector stakeholders; what stakeholders can contribute to the Union; and how best to open products and services to WPSPs. The morning included panel discussions with the afternoon dedicated to open discussion, where the exchanges were frank, and at times, even provocative.
Attendees were reminded that the 2021 Abidjan Congress passed two resolutions instructing the Union’s body to develop proposals aimed at reform and opening of the Union to wider postal sector players, with proposals to be examined at an Extraordinary Congress in 2023. Relatedly, Saudi Arabia was elected host country of the Extraordinary Congress, set for October 2-6, 2023. These resolutions built off work done in previous Congresses, which began the process of opening some UPU products to the private sector.
As the executive director of the International Mailers Advisory Group (IMAG), I had the privilege of being a panelist on the second panel on opening products and services. I promoted the idea of “global worksharing,” modeled in large part after the successful worksharing program of the U.S. Postal Service. This approach would allow the private sector to add value to UPU products and services, helping to build postal volumes while serving the shared customer. I listed the many ways our members already partner with posts to encourage cross-border shipping, including, selling their products and services, providing duty and tax solutions, handling customs compliance and onboarding, and simplifying procedures for the shared customers.
IMAG put forward some specific ideas, including an express-like, direct-injection commercial service at market rates that could overlay UPU products and solutions, such as their carbon-calculator tool, an address verification tool, and/or supply-chain solutions. We encouraged proactive next steps: specifically, small market tests that could be scaled up or down depending on results, with data from the tests shared with all UPU member-countries and their designated operators (DOs). A small, nimble working group within the UPU’s expert team should be created, made up of DOs and private-sector partners that want to be involved in a market test.
Reform of the UPU is both necessary and overdue. After 25 years of task forces, discussions and “further studying” the time is now for reform. Public-private partnerships can aid in the effort.
Global ecommerce is expected to hit $27 trillion in 2027, with cross-border making up 30% of that amount, according to Accenture. Cross-border shipping remains a huge opportunity for posts. And yet, this market is hyper-competitive with numerous models serving distinct customer needs.
International postal volumes – already hurt by the pandemic, price increases, global recession risks, and new tax regimes and data requirements – are a declining segment of the market. Winners in the cross-border ecosystem will be those willing to adapt and seize the opportunities, which we believe will be through public-private partnerships. IMAG stands ready to collaborate with posts in this effort.
About the Author: Kate Muth is Executive Director with the International Mailers Advisory Group (IMAG). Founded in 1997, it represents the U.S. international mailing and shipping sector, addressing barriers to the efficient flow of information and goods across borders for companies utilizing postal services.