VietNamNet Bridge - After 140 years of use, the US has decided to leave UPU (Universal Postal Union), saying that the benefits are insufficient. The withdrawal is expected to be a great opportunity for Vietnam’s shipping and delivery service.

Vietnam sees opportunities after the US withdrawal from UPU

There are two ways to carry goods to the US, via the post office system or trade transport firms. Under UPU, a 2 kilogram parcel from China to the US costs only $5 in transport fee. However, it would require $20 to carry the same parcel among the states in the US.

Chinese businesses selling goods to the US have been benefiting greatly from the UPU (Universal Postal Union) subsidy policy. 

The 2017 annual report of Global Top E-commerce, a Chinese cross-border retail company, showed that 70 percent of parcels from China entered the US via the post office system. 

The US move of withdrawing from UPU was described as a blow on Chinese cross-border retail startups, because they will no longer enjoy low transport fees.

Global Top E-Commerce said that only large e-commerce firms which have cross-border delivery systems will not be influenced by the US withdrawal from UPU.

The 2017 report on Vietnam’s e-commerce showed that 32 percent of small and medium enterprises have established trade relations with foreign partners via the internet.

A number of big companies in the e-commerce industry have invested in Vietnam such as Alibaba and Tencent. Amazon is approaching Vietnamese partners.

Vietnam is one of the countries with the highest e-commerce growth rates, 35 percent per annum, or 2.5 times higher than Japan. This is a solid foundation to develop cross-border e-commerce, as 33 percent of people said they have bought goods from overseas at least once.

In Vietnam,  two startups, Fado and Gido, providing cross-border shopping services. Fado belongs to Miczone, an import/export company, while Gido belongs to Scommerce, which provides delivery technology solutions.

To date, both companies have not been affected by the US withdrawal, because most of the goods are carried from the US to Vietnam.

The shipping fees for carrying goods from Amazon to Vietnam quoted on Fado, Weshop, Phongduy, Giaonhan247 are VND1.6-1.9 million for a parcel with minimum weight of one kilogram.

Vo Hoang Hai, CEO of Gido, said the US move will benefit e-commerce delivery firms. 

The new tax rates imposed by the US will boost the export of Vietnam’s goods to the US as the goods are becoming more competitive. 

Due to the US-China trade war, US importers have shifted to buying products from Vietnam. The demand for transporting goods from Vietnam to the US is increasing.

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