Canadian E-Commerce Businesses Could Be Hit by the U.S. Postal Treaty Exit

The United States withdrawal from the Universal Postal Union may affect e-commerce businesses in Canada. This relates especially to businesses that ship from China to the United States.

The United States is threatening to exit the treaty if fairer shipping fees are not introduced. This could have an impact on the delivery prices to consumers, meaning it could affect Canadian businesses.

However, e-commerce businesses that send products to the USA should not be greatly affected.

Why Is the USA Exiting the Treaty?

The treaty is 145 years old, and it sets the rates of national postal services across the world
192 countries.

It determines the rates that countries pay each other for deliveries. At the moment, wealthier countries pay more than developing countries. As a result, the USA pays more than China.

Things have changed over recent years, however, and the nature of commerce has changed. The postal system is now used much more for competitive international commerce.

As a result, many people argue that the structure of payments needs to change for the 21st century. Developed nations are sometimes subsidizing postal services in other countries, and domestic deliveries can even cost more than international ones.

The Trump administration wants the United States Postal Service to change and to set its own rates.

Impact on Drop shippers

Drop shippers in Canada are likely to feel the impact of any changes. Many use Shopify, which is based in Ottawa, as the platform for their online stores. If deliveries go down and stores close, this could hurt Shopify as well as impacting the drop shippers’ stores.

Shipments from Canada to the USA

The move is unlikely to affect shipments to the USA from Canada, however, because it has a bilateral agreement in place that takes precedence.

It’s also worth noting that many small businesses in Canada that ship from China to other countries around the world use traditional shippers and private couriers rather than the U.S. Postal Service, so this could limit the impact.