Overseas USPS service under fire again

Aug 01, 1998 9:30 PM  By

Global Package Link (GPL), the U.S. Postal Service’s low-cost, high-volume international parcel delivery service, has become the subject of a new Senate bill and a new U.S. Government Accounting Office (GAO) report. But neither governmental issuance is likely to disrupt the status quo for now.

GPL, which Rep. Anne Northup (R-KY) unsuccessfully tried to curtail last year, has enabled catalogers to ship goods into Japan, the U.K., and Canada over the past two years for up to 30% less than they could using United Parcel Service, Federal Express, or other private-sector carriers.

Rivals UPS and FedEx have complained that, with GPL, the USPS unfairly wields its government affiliation. They claim, for instance, that the USPS’s quasi-governmental status enabled GPL to establish customs arrangements resulting in speedier delivery than the private carriers can achieve. In congressional testimony, the private carriers requested greater government controls on GPL rates, customs clearance, and foreign USPS service in general to better enable them to compete.

Currently, USPS management can set foreign postal rates as market conditions dictate. But in May, Sen. Thad Cochran (R-MS) introduced a bill (S. 2802) calling for the independent Postal Rate Commission (PRC) to approve international postal rates. Postal experts say that pressure from private carriers would likely convince the PRC to order higher GPL rates.

Congress could pass the Cochran bill this month. But some believe it’s more likely to fizzle out; as Jim Jellison, executive director of the Parcel Shippers Association, points out, “This issue isn’t of much importance to many on Capital Hill.” If defeated, however, Cochran might seek to attach provisions of his bill to other legislation.

The recent GAO report might help defeat the Cochran bill. In June, while UPS and FedEx were complaining before Congress that the USPS gains “sweetheart customs deals” not available to them, the GAO released a report saying that it failed to come up with any evidence or even suggestion that the USPS receives preferential treatment from foreign customs agents. Ironically, Rep. John McHugh (R-NY), a proponent of postal reform, had requested the report at the private carriers’ urging.