‘Utterly insane month’: Australia Post suspends business parcel shipments to US in tariff fallout

Australia Post has suspended shipping most parcels to the United States days before President Donald Trump’s latest round of tariff changes hit low-value items that had been exempt.

Trump signed an executive order last month imposing tariffs on goods worth less than $US800 ($1230), beginning on August 29.

Australia Post on Tuesday suspended service on business parcels to the US until further notice, as the executive order means senders will need to pre-pay the tariffs before their parcels arrive in the US. This has caused havoc for global postal services that do not have their own technology to collect the money and send it to the US government.

“We are disappointed we have had to take this action, however, due to the complex and rapidly evolving situation, a temporary partial suspension has been necessary to allow us to develop and implement a workable solution for our customers,” Australia Post executive general manager Gary Starr said in a statement.

Australia Post has partnered with American firm Zonos – one of only two customs compliance software providers approved in the US – to facilitate the payment of tariffs, but that system is not yet operating.

Australia Post said in an email to its business customers that Zonos would directly invoice and handle duty payments to US Customs and Border Protection on customers’ behalf.

It encouraged customers to sign up for a Zonos account “as soon as possible” but did not say how long it would take for the two organisations’ systems to be integrated.

Zonos chief executive Clint Reid said he couldn’t “begin to explain the absolutely, utterly insane month we are having” in a post to X last week. Zonos was only approved as a customs compliance provider on August 21, eight days before the tariffs are to come into effect.

According to a separate X post, Reid said Zonos had a 268 per cent rise in new users since the administration approved it to offer the service.

Wes Blundy, owner of online bra retailer Curvy, said it was “deeply frustrating that Australia Post waited until the 11th hour to act”.

“We now have dozens of American customers who paid for tracked Australia Post shipping, and we have no choice but to upgrade them to expensive international courier services at our own cost,” Blundy said.

He said the unexpected costs would make it harder to compete on price and service in the short term.

“We respect that Australia Post is navigating a complex international regulatory environment, but the lack of proactive communication or contingency planning has placed unnecessary stress on businesses,” Blundy said.

Val Brusylovsky, managing director of Melbourne-based e-commerce business Boutique Retailer, said his business would be similarly impacted.

“The United States is one of our largest international markets. Almost overnight we have been forced to hold and reformat existing orders, creating significant disruption for both our business and our customers,” he said.

“Parcels we had already dispatched have been returned before the suspension was officially communicated, which has led to added costs that we cannot recover, particularly for the postage fees.”

Similar pauses have been put in place in the United Kingdom, Germany, Denmark, Sweden, France, Austria and Italy because the “de minimis” exemption – which had allowed companies to send low-value parcels to the US without paying tariffs – is set to expire on August 29. Last week, international logistics company DHL temporarily paused shipments to the US from business customers in its home country of Germany.

DHL, FedEx, Toll Group and Global Express all confirmed they will continue to make shipments to the United States from Australia.

An Albanese government spokesman said it would “work with Australia Post to limit disruption for affected customers while they make adjustments to comply with new requirements”.

“We continue to advocate for the removal of all tariffs on Australian exports, in line with our free trade agreement,” the spokesman said.

Opposition spokesperson for small business Tim Wilson said that many firms relied on Australia Post to ship goods overseas.

“We need government to engage. I suspect [ambassador] Kevin Rudd is going to be off to the White House or Congress pretty quick smart, because we need to make sure this relationship is sorted,” Wilson told Sky News on Tuesday morning.

Opposition communications spokesperson Melissa McIntosh said in a statement that the changes showed the importance of the Albanese government securing a meeting with Trump.

“Australia Post is our national postage service, and the Albanese Labor government should front the
media for questions on behalf of the Australian public immediately, but it seems like they don’t know what’s going on,” the statement read.

The global economy has been roiled by Trump’s tariff agenda over recent months. The president has argued that tariffs will “enrich” US citizens despite most economists saying American consumers are bearing the cost.

On April 2, Trump announced his “liberation day” tariffs of between 10 per cent and 50 per cent on foreign nations, many of which have since been adjusted. Australia has the lowest baseline tariff of 10 per cent.

The Coalition has repeatedly criticised Prime Minister Anthony Albanese for failing to secure a meeting with Trump. Only three leaders of G20 countries, a club of major economies that includes Australia, have not met with the president in person. There have been lower-level ministerial contacts.

Letters, documents and gifts under $US100 are exempt from the executive order and are not included in the Australia Post suspension.

Paul Zalai, director of the Freight & Trade Alliance that represents logistics companies, said Australia Post’s pause was only expected to last a few weeks.

Zalai said retailers would find it advantageous to ship goods to the US in bulk and then distribute them, thereby paying tariffs on wholesale prices rather than retail prices.

“I imagine a lot of larger-scale retailers will change their logistics models. Smaller manufacturers or suppliers to the US … will be subject to higher costs and may suffer accordingly,” Zalai said.

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