USPS International Rates at Risk, FedEx Acquires Cargex
Discounted Rates at Risk Pending U.S. Withdrawal from Postal Union
In 2018, the Trump administration announced their plans to exit the Universal Postal Union (UPU) – a 192-country organization supported by a treaty that sets shipping rates from country to country. The treaty gives favorable rates to items shipping from developing markets, making it harder for U.S.-based shippers to compete.
According to a recent Supply Chain Dive article, the United States Postal Service (USPS) sent termination notices to organizations with negotiated service agreements, warning them that the international rates agreed upon in their contracts may be void after September 30.
American shoppers who are used to bargains found on Amazon and eBay may be in for disappointment. Changes to these international postage rates will significantly impact cross-border e-commerce, making it difficult for outside countries like China and Russia to ship to U.S. homes.
FedEx Announces Acquisition of Cargex
In a recent statement, FedEx announced its plans to acquire international freight forwarder Cargex in an attempt to strengthen their freight forwarding and brokerage capabilities in Latin America.
FedEx Logistics CEO, Udo Lange described Latin America as a “key market” for FedEx, saying “This acquisition perfectly compliments the roundtrip Colombia-to-Miami recently announced by FedEx Express.”
This isn’t FedEx’s first acquisition like this. Last October, FedEx acquired Manton, an Australian company specializing in ocean and air freight forwarding, as well as customs brokerage. By obtaining companies like Cargex, FedEx gains invaluable insight into functions like customs brokerage in other parts of the world.
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