3. International Transportation

        a. International Air Transportation
The Postal Service continues to align its air transportation strategy to provide universal service that satisfies the global delivery requirements of American businesses and consumers. In 2001, the Postal Service spent $182 million for international air transportation to provide global delivery service to more than 188 foreign postal administrations. U.S.-flag suppliers were paid $143.2 million, and foreign-flag suppliers received $38.8 million. The use of foreign-flag suppliers, particularly for airmail service, expands the Postal Service’s ability to reach destinations where U.S.-flag suppliers do not provide the required service. In addition, the cost of military mail, reimbursed by the Department of Defense, was $122.7 million.

        b. International Surface Transportation
In 2001, the cost of international surface transportation by ocean was $6.6 million. Ocean suppliers are awarded on the basis of a best value, comparative analysis of proposals.

        c. Terminal Dues and Transit Charges
Under the acts of the Universal Postal Union (UPU) each postal administration which receives mail from another administration has the right to collect from the sending administration a payment for the costs incurred in processing and delivering mail received from that administration, those charges are called terminal dues. Additionally, the UPU provides for transit charges for mail which is exchanged between administrations through a third country.

Transit charges are paid by the sending country to the intermediary country for forwarding mail to the destination. During FY 2001 the US Postal Service paid $477.2 million for these fees and in FY 2000 $425.8 million was paid.