“International Perspectives”II. Cross-Border Issues

Moderator: Kate MuthExecutive Director

International Mailers Advisory Group (IMAG)

A. J. HernandezPresident & CEO

SkyPostal

Paul SchmuddePresident

Gateway Express

Joe MurphyChief, International Postal Policy Unit

Office of Specialized and Technical Agencies

U.S. State Department Bureau of International

Organizational Affairs

Tom FoleyVice President of Postal Affairs

Globegistics Inc.

Cross-Border Issues

PostalVision 2020 7.0

Kate Muth

Executive Director

International Mailers’ Advisory Group (IMAG)

IMAGIMAG represents a diverse community of marketers, consolidators, and international mailing organizations.

Our core mission is to address barriers to the efficient flow of goods and information across borders for companies utilizing postal services. Current members:

Access Worldwide Amazon APC Postal Logistics Aprisa Express Asendia USA Association for Postal Commerce Champion Worldwide Data Services, Inc. DHL eCommerce Direct Link Globegistics GrayHair Advisors ID Mail Systems IMEX Global Solutions

International Bonded Couriers International Bridge, Inc. International Delivery Solutions Lane Press MSI/Landmark MailAmericas Market Response International R.R. Donnelley SkyPostal UKP Worldwide UPS Mail Innovations Ursa Major Associates USPS ― Global Business

The Market

Source: Infographic by Stacey Rudolph, Business2Community, compiled from a variety of sources, including eMarketer.com and AliResearch

What Customers Want

Easy online shopping experience

Websites in language of shopper

Fully landed costs

De minimis – higher thresholds

Seamless customs experience

Easy (and free) returns

Fast and predictable delivery – free at a certain purchase price

Full visibility

Going the Extra Mile While Delivering the Final Mile

Founded in 2001

Pioneers in the courier & mail delivery business in Latin America since 1972

Recognized as a top delivery service in the region

Deliver mail and parcels for European Posts and the largest US & European consolidators

About UsThe Largest Private Delivery Network in Latin America

The same experience we have in the US.

Clear understanding of charges

Delivery status updates

Customer support

Payment in local currency

Easy returns

What does the Cross-border Shopper Want?

Email showing import duties and taxes

Online tracking visibility and email updates

Local in-language call center

Local payment option for duties

Return service – local return center

Going the Extra Mile

PAUL SCHMUDDE

President, Gateway Express, Inc.

• Singapore Post

• Blu Port

• EZ Buy

PostalVision 2020Cross-Border Issues

3/21/17

Overview of Globegistics

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www.globegisticsinc.com

Globegistics is a global distribution service provider for e-commerce

companies and large volume mailers offering solutions for the delivery of

parcels, mail and publications to more than 200 countries and territories

worldwide.

USPS Postal Qualified Wholesaler and Sales Agent for Royal Mail

Operating Facilities: JFK, ORD, LAX, MIA

Customer Needs circa 2007

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• Reliability

• Price

• Convenience – ease of use

• Service Features

• Customs Clearance

Seller/Buyer/MarketplaceNeeds- Today

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• Low shipping prices with faster delivery

• End to End Visibility

• Assistance with importing/exporting regulations

• Enhanced Customer Care

• Technical Assistance with On-Boarding

• Integration with Shipping Platforms, Merchant sites and Marketplaces

• Parcel ID, tracking showing movement

• Marketplaces require seller to accurately state delivery expectations – and holding them to it.

• Simple, clear and speedy returns processes

• All-inclusive pricing at the point of purchase (DDP)

The Colography Group, Inc. IMAG Quarterly Meeting | 5

Consumer Sentiment Contributing To Changes

1/2

Fast delivery, product variety and availability are key service features of consumers.

52%

54%

59%

64%

71%

Easy return and exchange

Flexible delivery options

Enhanced search functionality

Product variety and availability

Fast delivery

Top 5 Service Features

“Who is delivering my shipment?”

“I’ve waited all day. Can I get

my delivery by tomorrow?”

82%Of consumers want to know the name of their delivery provider.

70%Of consumers would specify a delivery date if they were able to do so.

Of consumers abandon their shopping carts due to inferior delivery and shipping options.

Source: Combination of DHL eCommerce, secondary research and Colography research.

Meeting Those Needs

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• Low shipping prices with faster delivery• USPS ePacket and IPA, non-usps as well

• End to End Visibility• Good options if willing to pay for it

• Assistance with importing/exporting regulations• Dept of Commerce very helpful, plus in-house experts

• Enhanced Customer Care• Local, 24/7, multi-lingual

• Technical Assistance with On-Boarding• Should be smooth, simple and customized

• Last Mile Delivery• Who is showing up at the door?

• Postal or courier?

• Duty/tax being charged?

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• Integration with Shipping Platforms, Merchant sites and Marketplaces

• Service providers must be integrated

• Marketplaces require seller to accurately state delivery expectations – and holding them to it.• Properly selecting service level extremely important for

ratings

• Simple, clear and speedy returns processes• Anyone have one? Very difficult to build

• All-inclusive pricing at the point of purchase (DDP)• Pay everything at checkout

• Can assist overseas buyers purchase goods from the US

• Becoming more popular

Meeting Those Needs

How About 10 Years from Now??

The IPP(Integrated Product Plan)

What is it and what’s it for?

• The IPP is the UPU’s response to the changing composition of the mail stream, which is increasingly dominated by goods as a result of the growth of e-commerce.

• It’s purpose is to develop a fully integrated portfolio of physical products with adequate remuneration to cover the cost of delivering those products.

Why do this?

Existing products:

• overlap and compete with one another in some areas,

• sometimes fail to provide remuneration that allows posts to cover cost of delivery

• at other times are not competitive in the marketplace, and

• do not meet the evolving needs of customers and supply chain partners.

What does it do?

• It puts the focus on item content rather than external characteristics, classifying postal items into “documents” and “goods” categories.

• Implemented in two phases:

--Phase 1 adopted in Istanbul in September 2016 to take effect January 1, 2018. Establishes “small packets” as the only category of Letter Post that can contain goods and requires application of an S-10 bar code to them.

What does it do? phase 2

• Phase 2 to be developed 2017-18 and presented to an Extraordinary Congress in the fall of 2018 in Addis Ababa for implementation in 2020.

• The objective is to have a single integrated product portfolio, and integrated remuneration system for all postal items from 0-30kg.

• On top of the primary division between documents and goods, further product specification will result from required speed of delivery and additional value-added features.

• Product requirements will account for the emerging requirements of supply chain partners for AEI (EAD).