- 4 October 2016
- Transport / Logistics Services
Member states of the Universal Postal Union (UPU) have together agreed to adopt a new terminal dues system following discussions at the UPS Congress in Istanbul.
The terminal dues system compensates destination countries for the cost of handling, transporting and delivering letter post items across borders.
The UPU released a statement saying, “Starting in 2018 bulky letters and small packets, classified as E-format, will be compensated differently from other letter-post formats.
“With increased volume of small packets being exchanged through the letter-post networks due to e-commerce, UPU member countries have been seeking a new rate structure of compensation for handling of higher volumes of heavier items.”
The member countries voted on the proposal during the Congress Committee 4 that focuses on issues around the Universal Postal Convention. Siva Somasundram, General Manager of International Regulatory Affairs chaired it.
Somasundram described the terminal dues package that was approved by Congress as a “very carefully negotiated compromise” which “recognizes that member countries have as a whole agreed on three main principles”.
Somasundram outlined those principles: “One, having all countries get to the target system; secondly, that costs coverage is important; and thirdly, that the remuneration system that the UPU agrees on doesn’t negatively impact the way in which customers respond to the associated services.”
In addition the UPU said that member countries also moved one step closer to the terminal dues target system, agreeing to merge the six current classification groups into four groups.
“Countries are currently classified by their level of development, meaning those in the most developed groups pay contributions into the Quality of Service Fund on top of terminal dues to those in the less developed group. This mark up goes toward development projects in the recipient country,” explained the UPU.
“The classification system was established at the 2008 Universal Postal Congress in Geneva and updated by the 2012 Doha Congress.
“Starting in 2018, former Group 1.2 and Group 2 will be merged in the new Group II, while Groups 4 and 5 will make up the new Group IV. The goal is to eventually move all countries into a single target terminal dues system.”
Subscribe to Newsletter