How does payment for postage work?

Asked by grizelda (148

) February 1st, 2011

Just curious but I was wondering how postal companies reimburse each other for the cost of postage overseas.
For example, if I mail a parcel from New Zealand to a friend in the UK, I pay the NZ postage service – yet the bulk of the service (sorting, transport and delivery) would be done in the UK and so it seems that the UK postal service bears the higher cost of service delivery but does not get payment.
Do individual countries track parcel costs in some way and bill each other? Or do the companies just reciprocate? Any one know how this works?

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1 Answer

@grizelda there is an organization, headquartered in Berne, called the Universal Postal Union which is part of the United Nations. It was established in 1874 and is the second oldest international organization in the world. It oversees things like terminal dues and transit charges. It has 191 member countries.

All countries are required to pay terminal dues to service local dellivery costs. Basically, they settle on payments each quarter based on weight and the number of items shipped. Before the UPU, international mail delivery depended on treaties or private shipping.

Very good question.

http://www.upu.int/en/activities/terminal-dues-and-transit-charges/about-terminal-dues-and-transit-charges.html

bkcunningham (18501

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