U.S. Postal Regulatory Commission

Terminal Dues

In 2016, Copenhagen Economics estimated the magnitude of financial transfers between national postal operators created by the UPU terminal dues system. In this previous study, commissioned by the U.S. Postal Regulatory Commission, we estimated the financial transfers caused by the UPU terminal dues system to 950 million Special Drawings Right (SDR), equivalent to approximately 1.4 billion USD. We also highlighted that financial transfers primarily are created by low terminal dues for small packets, one of the letter formats covered by the terminal dues system. 

In September 2016, the UPU Congress agreed on a number of changes to the terminal dues system, entering into effect as of January 1, 2018. Perhaps most notably, the changes include separate (and higher) terminal dues for bulky letters and small packets. Against this background, the Postal Regulatory Commission asked Copenhagen Economics to estimate the impact of these changes on financial transfers going forward.

The report provides new quantifications of financial transfers with the system valid until 2018 and with the updated system respectively. The main conclusions of our study are:

The next opportunity to initiate any further changes to the UPU terminal dues system will be at the next (extraordinary) UPU Congress that will take place in Addis Ababa later this year. 

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