The U.S Postal Service uses Country Price Groups to determine the shipping rate for international parcels. Each country is assigned to a Country Price Group, and these groups can also vary by USPS mailing service and package type.
In January 2021, the USPS will be making some significant changes to these groups:
- The number of country groups will increase for international shipping services:
- PMEI (Priority Mail Express International) goes from 17 to 20 groups
- PMI (Priority Mail International) goes from 17 to 20 groups
- FCPIS (First-Class Pkg. Int’l Service) goes from 9 to 20 groups
- PMEI, PMI, and FCPIS will have individual rate groups for:
- Canada, Mexico, United Kingdom, Japan, Germany, France, Brazil, China and Russian Federation.
- PMEI, PMI, and FCPIS will have two country rate groups for:
- Australia, New Zealand, Korea and Hong Kong.
Why is the USPS making those changes?
In 2019 the U.S Postal Service won a decision with the Universal Postal Union to increase their rates for inbound delivery of small packages from postal operators around the world. That decision opened the door for those postal operators to increase their costs to the U.S Postal service for the U.S Postal exports to their country. In January 2021, the USPS will have their first opportunity to pass those costs onto commercial base shippers and they are trying their best to reduce the impact to shippers. One way to do so is to set additional country groups.
Each country group is made up of a series of countries that share one price for customers but do not share one cost to USPS. So, the USPS is creating more pricing country groups in order to have better flexibility to price-protect certain countries instead of creating one default rate that is normally pegged to the highest-cost country.
What does this mean for shippers?
The US Postal Service country group changes will ultimately require a bit more work for U.S Postal Service based IT systems and integrators that build and manage rate cards for their customers with US Postal Service based rules. Also, for shippers that are very familiar with pricing groups for popular countries they ship to, they will need to relearn those pricing groups so they can quickly assess pricing for products they export.
Ultimately, the headache of learning the new price groups will not outweigh the advantages. To better understand the changes and how they will impact you, click
here to see the new vs. old country groups.
