International Package Market:
Trends and Opportunities

There have been a number of disruptions over the last couple of years: the pandemic, self-declared rates, AED compliance, ICS2 release 1, and EU customs changes. Today, we are taking a look at all the ways we do business with international posts. We’re leveraging our KPG and IPC memberships and seeking to evolve the postal channel to be much more in sync with the commercial. A lot of postal operators we’re dealing with have commercial channels — we’re looking at how does some of that volume get shifted into the postal channel.

UPU is dealing with 192 member countries, with different levels of experience. We seek to provide interoperable tools in a standardized way so that even the smallest countries can implement them at a reasonable price. I think technology has a huge role in enabling this relationship between commerce and the post. It will all be about data and interoperability and networks and API.

Senders need to deal with all the regulations and thresholds for payment of duty and taxes. These companies have to be aware of these complexities and plan for the most stringent requirements rather than the least to satisfy the complexities of customs — and that is something technology can help them manage.

Based on my experience in the returns area, merchants and consumers are very interested in international returns, but cost is the biggest concern for all stakeholders involved. One of the strengths of the postal operators that we can leverage is utilizing their vast network and ability to consolidate returns shipments all around the world. The only way we can come to a reasonable price point is if we can find ways to leverage postal operators' reverse logistics capabilities.

The posts at different stages can potentially serve as consolidation points. The posts can pick up the item to be returned from the recipient and then it would trigger a return merchandise authorization so that the sender could issue a credit. I think it's the technology and the data about the shipment that is the most critical and posts need to unite in that data.

The UPU has really upped our game over the last few years regarding sustainability. We have a project to reduce our carbon footprint that many of our member countries are already participating in. We’re also looking at packaging. Sustainability is definitely a big part of our strategy for the next few years.

One of the difficulties is how do you measure [sustainability]. There is some uncertainty as to what the U.S. law will be, what the requirements will be from the SEC. And maybe people don’t want to pay for that, but maybe want the companies to pay.  

We’ve come a long way in visibility and tracking. I think the biggest challenge is, as we work with foreign operators from a destinating perspective, sometimes it’s challenging as they develop their technology because they’re not all at the same level.

International deliveries naturally take longer than domestic deliveries. We can use our data and algorithms to calculate the delivery dates for key markets to set a precedent and create a unique customer experience. When a merchant can provide a clear estimated delivery date to a consumer at time of purchase (e.g., package will arrive in 8 days), it creates an enhanced experience for the customer. I see a trend toward creating that experience for customers on the international stage.

Artificial Intelligence for harmonized codes has been a game-changer. We have humans who can oversee that as needed, but if we can quickly look through the AI for the harmonized codes it’s a really quick application that can serve a lot of needs. It’s been wonderful.