When a customer sends a postal item abroad, the cost of delivery must be settled between the sending and the delivering Post. The UPU oversees a set of international agreements to help set and settle the costs of delivery between its 192 member countries.
In the international mail process, the sending country assumes the costs of collection and transport of the item. Therefore, the destination country should only be reimbursed by the sending country of the costs incurred in providing the service corresponding to delivery. The remuneration rates that are agreed on by UPU member countries cover the cost of delivery in the destination country.
At the moment, each postal product – letter, parcel or Express Mail Service items – is remunerated by a separate system and set of agreements. These systems are constantly evolving. They are reviewed regularly at the UPU’s quadrennial Universal Postal Congress.
The UPU remuneration system for letters and small packets, commonly referred to as the “terminal dues” system, was first introduced by the 1969 Tokyo Congress. It designates different rates for different formats; one for small and large letters, which are lighter and tend to contain documents, and another for bulky letters and small packets, which are heavier and tend to contain goods. Beginning July 2020, member countries will also be able to declare their own rates for delivering inbound bulky letters and small packets, with conditions to protect low-volume developing countries from excessively high rates.
Inward land rates
The inward land rates are the system of payment between parcel post operators for the delivery of incoming parcels. In a move to ensure that the payment for the delivery of parcels is linked to the quality of the service provided, a system of bonus payments for the provision of parcels service features is added to a base rate for delivery.
The system of payment between postal operators for the delivery of incoming EMS items (merchandise or messages) are based on the self-declaration of rates. In a move to ensure that the payment for the delivery of EMS items is linked to the quality of the service provided, a system of bonus payments for the provision of the EMS service is added to a base rate for delivery.
The growth in the cross-border e-commerce market provides an exciting new business opportunity for Posts. In order to take advantage of this opportunity, the UPU is working to review and modernize the portfolio of postal products and their respective rates to cater for changing customer needs throughout the world. In August 2020 during the Universal Postal Congress, UPU member countries will examine a proposal for an Integrated Remuneration System (IRS) intended to address changes in the global postal market.
Terminal dues base rates and other terminal dues payments compensate the designated operator of destination for the handling, transportation and delivery of all letter-post items.
Transit charges compensate for mail exchanged between designated operators through a third country.
The remuneration systems continuously evolve in a changing socio-economic and political context and adapt to the dynamics and developments in the market.