FOR POS MALAYSIA, THE CLOCK IS TICKING AFTER U.S. WITHDRAWAL

AS A continuation to my earlier posting on the possibility of the United States withdrawing from the 92-nation Universal Postal Union (UPU), and its negative bearings on member countries including Malaysia, I anxiously wait for the outcome of an emergency meeting in Geneva.

Any outcome which sides the US intention would mean disaster to many countries as the episode which stemmed out from US and China trade war two years ago, may see surging fees on parcel delivery to US. China, which all the while has been enjoying cheap postal service with the Americans, as alleged by Washington, will now has to tango to the new regime.

However, the immediate attention now is Pos Malaysia. Registering a net loss of RM165.7 million for the financial year ended March 31, 2019 – its biggest ever loss for a full year – it can suffer more with US exiting UPU since its existing customers will need to pay many extras for its services to the US and other parts of the world.

Similarly, the US too cannot find business solace from its action. According to British newspaper The Guardian a few hours ago, US stamps would no longer be valid abroad and there would be a total disruption of postal services to the US.

Pos Malaysia says it will minimise the impact of potentially increased costs to local customers. It is currently working closely with the government and all relevant bodies on ways that would brace the public and businesses from the huge impact of potential high rates and the instability of delivery system around the globe.

A deregulation consideration is a possible option to cushion the potential soaring of postal and parcel rates internationally, according to a statement issued today. Three proposals have been tabled at the meeting and all options will see a high-cost impact to postal operators across the globe.

“While Malaysia’s stand is for the status quo and a more matured new proposal to be studied and submitted at the next Abidjan UPU Congress in 2020, it is likely that a new option proposed by the US will be voted through in at this Extraordinary Congress,” it said.

Pos Malaysia also noted that countries such as Malaysia are caught in the crossfire of the escalated trade war between the US and China. The US has claimed that with the booming e-commerce industry, the US Postal Service has been forced to subsidise between US$300mil (RM1.256bil) to US$500mil (RM2.094bil) of the cost of parcels coming into the country, including those from China.

China is listed as a developing nation within the UPU.

Pos Malaysia said that with the revision of rates that would come into agreement, it will continue to provide affordable postal services to all users. While it needs to address this to minimise the impact for Malaysia’s consumers and businesses, it must not lose sight of its transformation agenda.

“This will be built upon Pos Malaysia’s unmatched distribution network and the vast opportunity to develop new digital businesses for its customers,” it said.

Experts say US withdrawal could lead to a “nightmare scenario” of mail going undelivered, packages piling up and American stamps no longer being recognised abroad. The Trump says it wants to charge other countries more than UPU rules now permit to have letters and packages delivered in the United States, arguing that the current system unfairly benefits China.

It has set a deadline of next month for rates to be raised or it will quit UPU, which was founded 150 years ago.

White House trade adviser Peter Navarro, who heads the US delegation to Geneva, called for fixing a system ‘that everyone in this room knows is broken’. “The mission here is to retool this system for the brave new world of e-commerce,” he said.

The system meant the US Postal Service was effectively spending US$300m-US$500m to subsidise the cost of delivering imports, including counterfeit goods and drugs mailed to the United States from China.

Warnings have also been sounded about the implications for US military members abroad sending packages home, and for Americans abroad wanting to vote by postal ballots.

Malaysia will have to find more avenues to weather such possibilities. Already running in red, the government must attention to suggestions and corrections if it wants to see Pos Malaysia less-infected by the US move.

Dont be caught offguard,

Meantime, the clock is still ticking…

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