A Straight Dope Classic from Cecil's Storehouse of Human Knowledge

Why does the U.S. deliver foreign mail when we don't get any money for the stamps?

December 14, 1990

Dear Cecil:

I just received a letter from a friend of mine in France, and it occurred to me that he had purchased his stamps there in France. Why then did the U.S. Postal Service bother to deliver the letter? What's in it for them? How does this intercountry mailing business work, anyhow?

Cecil replies:

Once upon a time there was an elegantly simple answer to this question. Not today. After 20 years of well-intended tinkering, international mail has overtaken assembling Christmas toys on the complexity index and it's breathing down the neck of setting the clock on your VCR. So brace yourself.

First the easy part. Cheap, efficient international mail was one of the great achievements of the Victorian era. Previously, trying to get a letter delivered overseas had been an accounting nightmare. In calculating postage, hapless users had to figure in the local rate in their home country, the rate paid for ship transport ("sea postage"), the rate paid to each country that handled the letter enroute ("transit fees"), and finally the domestic postage in the destination country.

Postage could vary widely depending on the route by which you sent a letter — from five cents to $1.02 per half ounce from the U.S. to Australia, for instance. Detailed accounts had to be kept for each mail shipment so that everybody who got his mitts on it in transit would be sure to get his proper share. We had separate postal treaties with every country, and everybody figured things differently — by the ounce, by the gram, by the German "loth," by the sheet. Predictably, the mail was slow and the rates were exorbitant.

Fed up with this, the U.S. called for an international postal congress, which was held in 1863. This led to the creation of the Universal Postal Union, which established a few straightforward principles: (1) there should be a more or less uniform flat rate to mail a letter anywhere in the world; (2) postal authorities should give equal treatment to foreign and domestic mail; and (3) each country should keep all the money it collected for international postage.

The rationale for Item #3 was ingenious. Reformers argued that each letter begot a reply. If each country had as much outgoing mail as incoming, the international postage it took in would cover the cost of delivering foreign mail.

The new system worked fine for quite a while. Postal rates dropped, international mail boomed, prosperity reigned. But by and by grumbling arose, partly because the nature of the mails had changed. One-way commercial mail such as periodicals came to account for a much larger portion of mail volume than letters. Countries like the U.S. became net exporters of mail. Since we kept the postage, poor nations griped that they had to deliver our mail essentially for free.

So in 1969 the UPU decided on a new system. If we sent India 100,000 kilograms of mail per year and they sent us 80,000, we'd pay them a fee for the 20,000 kilogram difference. These fees were called terminal dues.

That opened the door to a long round of rate tweaking. Since terminal dues were originally charged strictly by weight, bulky periodicals incurred huge costs while letters, which required just as much handling, got off dirt cheap. After complaints by the U.S. and other nations, the UPU devised a new "threshold" system, which was implemented in 1991. It set separate letter and periodical rates for countries we sent at least 150 tons of mail to annually. For countries with less mail, the old flat rate was kept. Meanwhile, we negotiated a separate terminal dues formula with 13 European countries that included a rate per piece plus a rate per kilogram. We have yet another arrangement with Canada.

And you ain't seen nothin' yet. European countries want to make the system even more complicated, for reasons I can't bring myself to go into. Wily bulk mailers are shipping out mail via the under-150- ton countries to take advantage of cheap rates, which will probably call for some additional rate response.

In short, the international mail system is beginning to approach the complexity it had prior to 1863. At the moment we've got two UPU formulas, a European formula, and a Canadian formula. More formulas are in the works. We still pay transit fees, too. Happily, consumers haven't been affected much — so far. Though its own accounting is getting knottier by the year, the U.S Postal Service inflicts only three basic international rates on users — one for Canada, one for Mexico, and one for everybody else. But we could yet wind up with separate rates for every foreign destination.

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