As cross-border eCommerce continues to grow, the demand for a variety of shipping solutions is increasing. The USPS has encountered the need to offer alternatives for commercial shipments going through its international mail streams. They recently published a notification with the Postal Regulatory Commission https://www.federalregister.gov/documents/2021/02/01/2020-28968/new-outbound-commercial-provider-initiative-ocpi-program-information-opportunity-for-comments of a new export initiative called “Outbound Commercial Provider Initiative” or OCPI for short.
The new initiative aims at introducing new export delivery methods in the existing postal services. Today, the USPS services are 100% postal-cleared through customs (with the exception of their FedEx branded product Global Express Guaranteed) and this new initiative will start to include a mix of postal and commercial clearance methods in their current services (i.e. Priority Mail International). This could be a pretty big change for current USPS shippers and while the goal is most likely to improve/retain current pricing and/or improve current service levels, we thought it would be good to interview one of the experts on international postal affairs to get her thoughts regarding the new program and any potential impacts.
Kate Muth is the Executive Director with The International Mailers’ Advisory Group (IMAG) which was founded in 1997 and, since then it has become the premier representative of the U.S. international mailing and shipping sector. Its core mission is to address barriers to the efficient flow of information and goods across borders for companies utilizing postal services.
In what ways do you think the OCPI program will benefit the customers?
Customers see the most benefits when they have different options to choose from, and the OCPI program will offer them a new solution. Customers can also see the benefits when they are shipping to countries where the designated operator is not reliable on service and scans. Hopefully, there will also be a cost-benefit associated with the OCPI program to ensure that customers see some economic advantages as well.
How do you think OCPI will impact the global eCommerce market?
A new competitive service for countries that are currently experiencing bad or unreliable service will open the market more. Buyers, shippers, and sellers will be able to reach more customers, especially in countries where solutions are not as robust as they are in countries with a strong eCommerce market.
What are some of the issues USPS might face while implementing the new OCPI program?
The timing of the program launch must be perfect, allowing service providers ample time to transition. The proper time is needed for service providers such as GlobalPost to make the necessary form changes, labeling changes, and all the tagging changes while keeping the burden off the end-user customer. If not timed appropriately, the global market can see major impacts. Enough time must be allocated for all the hiccups to be worked out, so that customers will not have to face changes to service and visibility. Also, the USPS may find customers who want a full postal presentation which means postal clearance and full postal delivery. Potential customers in the market may be turned away by the commercial clearance process the OCPI program offers.
OCPI has a March 31st launch date, how will COVID-19 impact on the program?
Due to the ongoing pandemic and suffered services with the loss of airlift, the association recommended an alternative approach with the rollout of the OCPI program. IMAG believes the best way to launch the program is by conducting a market test first with 1 or 2 countries. This will allow the USPS to work out any problems they face while also allowing their partners to see what issues they may be experiencing with the program. Once the market test is complete, a broader rollout should be implemented down the road.
How do you feel OCPI will affect the current consolidator business?
USPS will risk the chance that some consolidators might look for other solutions elsewhere if there is no clear value proposition to OCPI. To win over the consolidators the USPS must clearly show that OCPI will be better in price, solution, or visibility. Consolidators will have to adapt to any positive or negative effects the program may have on the market.