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No More Cheap Shipping for Chinese Sellers (amazon.com)
896 points by nkurz on Aug 27, 2019 | hide | past | favorite | 483 comments

This actually sounds like a good thing. It costs Chinese shippers almost nothing to send stuff directly from China, while it costs me quite a lot to send stuff within the US, largely because I'm subsidizing all the Chinese shippers.

Moreover, for me to send any parcel (even very small ones, like 2 oz.) outside the US costs a small fortune these days, again because I'm subsidizing the Chinese shippers.

> Moreover, for me to send any parcel (even very small ones, like 2 oz.) outside the US costs a small fortune these days, again because I'm subsidizing the Chinese shippers.

International shipping was expensive before China flooded the market b2c.

If you sent a pkg to China, the US would only have to drop it off in China, the last mile delivery cost is mostly up to China. The actual air freight cost to USPS is about $5/kg.

I think what’s really happening is that USPS (and Canada Post!) are using international shipping as a profit centre because there’s little competition and they need to subsidize legislated activities (6x/week door-to-door service for 53c or whatever it is).

"using international shipping as a profit centre"

Canada is truly awful in this respect. In Canada, it might cost around $50 to send a small package to another country (excluding the US, which is a little cheaper). In the US, the same package might cost a little over $10.

I'm in the US and I occasionally have to ship small light packages to Canada and was always frustrated when it cost me $10, 3x as much to ship a few hundred miles to Canada compared to 2,000 miles within this country. Then I learned that shipping that same package within Canada would cost almost $20.

There’s a cottage industry of companies in big cities that will truck your US-bound package to the US for $1 each and deposit it into USPS.

Eg: chitchats express.

Sometimes Canadians do this for shipments to Canada because it can be a lot cheaper.

How does that deal with customs and inspections?

Originally they didn’t collect much data and used manifests on the individual packages, but for the past 5-6 years they’ve a computer system to enter package info, it’s basically a Google Sheet, and they show the manifest like any other shipping company. They’ll occasionally get a thorough stop but it’s up to chance as anything when at a trusted, high-volume border crossing. If you’ve a Nexus card and nothing to declare, you don’t actually have to stop at the border between the US and Canada if Nexus lanes are open... and if you do have something to declare you can drop off a form. Also they probably stick to the same land border crossings and the same schedule to make it easier long-term. They can close many borders but there a lot of commerce and cross-border travel between Canada and the US and parts of Canada can be more populated/central than parts of the US and vice versa. Besides, as long as the carrier follows directions from CBP or CBSA, the responsibility of the shipment belongs with the shipper and you have to leave your complete ”from” details and they even check IDs, in order to ship with them. They send the list in advance so anything suspicious can be flagged or recorded, that’s how customs works in this digital era...

Thanks for the extra perspective. At the end of the day, they're no different than Fedex bringing packages across the border.

Yeah the description sounded very ad-hoc and quasi-unofficial but should have known it would be actually pretty normal.

Show the manifest, they go through it. Dunno how much they inspect.

My guess is that the company just hires dual citizens to avoid visa issues.

US lets you do personal imports up to US$800 per import without taxes/duties, so they limit it to that.

> My guess is that the company just hires dual citizens to avoid visa issues.

This isn't related, the company can hire anyone they want to man the trucks. Do it often, and you register with FAST.

> US lets you do personal imports up to US$800 per import without taxes/duties, so they limit it to that.

That only applies to personal good, not things you're bringing for commercial purposes, and there's a minimum away-from-the-country time.

Well, that’s what the transport company requires. I’m guessing they’re brokering each package themselves, not as the entire lot at once.

I doubt US is letting them bring truckloads in if what I said about tariffs/taxes/duties is untrue.


No minimum away-from-country time. That's for Canadians, not USians.

Sounds like the next thing for big VCs to fund. It used to be that going somewhere with strangers you met online was feared, then came Uber. Couch surfing? AirBnB. Next, getting packages around customs, tariffs, and expensive shipping by crowd sourcing? Bam! VC Unicorn.

Kinda like the Mexico-Canada dual-citizen Mennonite drug-smuggler Mafia: https://www.cbc.ca/fifth/m/episodes/2016-2017/the-mennonite-...

And yet I've never had a reliability problem with USPS-shipped packages, whereas I've had so many problems with UPS that it's a joke among my friends that someone at UPS has a personal grudge against me. Lost packages, dented packages, me being home all day long and the doorbell never rings but there's a post-it on the door saying they couldn't deliver because nobody was home.

In theory USPS takes longer, but for me personally it's about the same time and a lot less of me getting upset at people. If USPS says Friday, I'm getting it on Friday. If UPS says Friday I'm getting it on Monday evening.

I miss when Amazon used to let you chose the shipper. That's been forever ago.

USPS has been great for my tiny side-business. They are cheaper than anybody else for packages under a pound, and you can create a first class shipping label from within PayPal. This is cheaper than priority mail, and seldom if ever takes longer. I've simply never had a lost package, despite shipping a couple hundred units per year for almost a decade.

On the receiving end, I like USPS because I can have my mail held when I'm on a trip -- the process is totally painless.

Now, who knows if my shipping is being subsidized. Probably, when one considers subsidies to transportation infrastructure. But I suspect that if we lose USPS, whatever money the government saves will be more than made up by having to bail out one or more of the private shipping services every few years, like other "too big to fail" industries.

In addition, if you're shipping smaller heavy items, you can get free shipping supplies like padded envelope and boxes for flat rate shipping which can be a better rate in some cases.

As I understand it (and even though I live in NZ I manufacture in China and ship all over the world from there) much of the airmail shipping from China is essentially founded on arbitrage of the empty space in air-mail shipping containers from Asia to the West - it's while it takes a while and sometimes your package goes out of Hong Kong, sometimes Singapore etc

In essence those packets are cheap because some smart person is buying up the empty space in containers that are already going and filling them - I assume that Air-Mail FROM the US could be equally cheap if someone was entrepreneurial enough to do the same there

That still doesn't explain why it's so cheap.

Planet money did a pod cast on it. Some guy selling some product could buy a Chinese knockoff of his product (including shipping) for cheaper than it costs him to ship his product from his local post office to his house in the same town. (excluding the cost of the product) Think about that. The product plus shipping across the world is cheaper than shipping across town.


I think it's because they are buying space that otherwise would be empty, and maintain an elastic buffer of packages to fill those spaces as they become available - the outgoing mail containers on planes are likely booked and paid for months in advance so the people paying for them will happily take 20% of their normal rate to fill the rest of them at the last minute

No, that's not the problem.

Here is the problem. I make a widget. It costs me $10 US to manufacture. I go to the post office, and ship it to an address directly across the street. They charge $7.

I go on AliExpress. I buy a similar widget, and ship it to the same address. The total cost, the item plus shipping, is $6.

Let's break that down. Their cost of manufacturing is lower. Let's say it's free. Ok fine. Trans Pacific shipping is cheap. Let's say it's free. Ok fine. They still have to ship it via the post office from the port in Long Beach to the post office in New Jersey; again, let's say that's free. The post office then has to deliver out across the street.

The post office charges me $7 to walk it it across the street. Why should the Chinese shipper only pay $6 for the same service?

That, and air freight only costs around $5/kg at regular rates.

The low-rate consolidators are kinda shameful by only bringing goods to the closest port to the origin, not the destination.

E.g. in Canada, they only bring it to the Vancouver port, while wealthier countries will pre-sort and air it to the closest intl mail port (Toronto, Montreal or Vancouver).

this is a trade off between cost and speed of delivery - shipping out of China I have the choice of many different carriers - for example I can use cheap (and slowish) China Post, or faster and $6 more PostNL who will also give me tracking - I give my customers the cheap China Post for free and charge $6 for PostNL

(in the near future if US mail prices go up I may be forced to charge US customers more, I may also have to raise prices to US customers if I find that Trump's sanctions start to apply to small packages and I'm stuck paying from my end)

Nope, the prices were dictated by the UPU, a global treaty organization that the US is part of.

I think you're confusing "terminal dues" (which is what countries charge each other for delivering a package in the destination country) and the actual cost of shipping between countries (which is what I'm talking about here)

Since you are responding to someone comparing US domestic (in town) shipping prices to international shipping price, I don't see how you are not talking about "terminal dues".

International freight costs could explain why international shipping is more expensive than domestic shipping, but even if international freight prices are 0, they can't explain why domestic shipping is more expensive than international shipping.

Don't know about air mail, but for maritime and rail transport, there is much more going from China to the EU or US than in the other direction by volume.

This means cargo carriers have to send back empty containers to China.

As a result, it's cheaper to book a container, from, say, Antwerp to Shanghai than the reverse. The difference can be quite substantial, potentially hundreds of USD per container.

For the other parts of the trip I don't have any hard info but I would think rail and truck is cheaper in China per km when converted to USD.

>Don't know about air mail, but for maritime and rail transport, there is much more going from China to the EU or US than in the other direction by volume.

Where can I verify this? Thats looking at only the direct transport? Or also indirect transport?

Consider a hypothetical container from the US/EU going to Africa (bringing products, second hand goods, "recyclables", ...), then the container could pick up raw minerals and resources going to China, now theres an empty container in China and it has to go back to US/EU?

It's because the shipping containers belong to the shipping company, and are rented out for the trip.

So the shipping company will have a bunch of empty containers at the port of landing (destination), and needs to send them back to the port of departure to be filled again.

If trade between the two ports is balanced, then the containers will always be full regardless of the port of departure.

But since trade is not balanced, they wind up having to send empty containers on the "return" voyage. Which is pure loss for the shipping company, so they are willing to heavily discount routes that have empty containers transiting.

Which are these routes does change of course, but they are often those originating in the EU / US and arriving in Asia.

If the containers were the only concern, they could be melted down and shipped back to China in a far more compact form.

Container manufacturing is very automated, so it can be very cheap to do so.

It’s pretty much the result of our trade deficit. Not only does China export more than is, they export much lower value products on a volume/weight basis. Heck, a big USA export to China are airplanes that can simply be flown there.

China exports plenty to Africa, no need for such circuitous shipping patterns.

China has a huge population, so material consumption (raw materials or finished products) for internal use in china, can bayesian catapult reasoning on value per volume/weight basis.

It could, but China has other more nearby trade partners for raw materials (Russia, Central Asia, Indonesia, Australia).

That’s all especially true now that we can’t send our “recyclables” in those empty containers.

A long time ago, USPS signed an insane sweetheart deal for free shipping from China, thinking that it would help US companies ship to China. But for many reasons (labor laws, environmental laws, go subsidies) outsidee of shipping costs, US-China post package shipping (not heavy industry whatever), is absolutely massively imbalanced. Chinese shippers massive privilege over US domestic shippers (shipping to ISo customers) was the main side effect. US shipping costs more than Chinese manufacturer + shipping, despite shipping from China being obviously more expensive in real world resources.

The USPS signed an agreement for ePacket, but most of the packages are being shipped under UPU rules that most countries in the world are signatories to.

USPS fares better under ePacket packages than the UPU tarifed packages.

>despite shipping from China being obviously more expensive in real world resources.

3 weeks container shipping on a super container ship vs. even cheapest truck shipping ?

The Chinese shippment also has to use a truck to get from Port.

Do you remember that article a couple years ago about pollution at the Port in LA? They've done a bunch to reduce ship emissions in dock but the truckers are popping up on the radar.

The short-haul truckers at the Port in LA are all independent owner-operators, which sounds like a cool libertarian/capitalist ideal until you figure out that new trucks are super expensive so the operators are almost exclusively buying used trucks, often quite old (and grandfathered into emissions rules). And as we all know from personal experience, there's a lot of soot that comes from a heavy diesel when it accelerates from a dead stop.

And there are no large necks to wring so now you're in the awkward situation of having to go after little guys.

The short haul trucks is primary use case for going electric.

1. around half of US population (and even bigger share purchasing/consuming capacity wise) live on a coast not far from a major port.

2. container ship is 10g/tonne-km of CO2, ground truck 60g/tonne-km of CO2

3. Shanghai to LA - 10000km, Shanghai to New York - 17000km

So, it is simple math that container delivery from Shanghai plus 100-200km or even more of truck delivery from the port beats any cross-US truck delivery (for the US West it beats even half-cross-US truck delivery). Of course when it comes to the math vs. ideological politics - last season of Veep was brilliant about it :)

> 3 weeks container shipping on a super container ship vs. even cheapest truck shipping ?

Container shipping is ridiculously cheap. See e.g. https://www.joc.com/maritime-news/capacity-cuts-keeping-asia.... Seems around 640 USD from Shanghai to North Europe as per above article/source. This for a 20 foot container. A lot of containers are 40 foot. US has loads of 45 foot containers.

If you'd go very far inland you wouldn't use a truck though; either a barge (inland vessel) or a train.

Just FYI: EEE-class ships carry ~18000 20' equivalent containers. That's $11.5m per journey.

Presumably they make a profit on the journey to N. Europe, and take a loss on the return.

A lot of it is actually airmail.

container ship shipping from US to Middle East was cheaper for me than shipping my stuff from NYC to California (and similar shipment from east coast to middle east was less tha half the price of shipping from California). Boat is much cheaper than truck overall.

I bought a A1 sized picture frame from a french seller for around $50 on Amazon. It was a total pain getting an affordable frame in A1 size, because the best we can get easily in America is a 24x36" which is just far enough off to be unusable.

When it arrived, it had some damage to the acrylic and I wanted to return it. Amazon Support said they would reimburse me up to $20 for shipping it back, but when I took it to UPS they wanted $370 just to ship it back.

I have no idea how shipping costs are determined. I'm sure the seller didn't pay $370 to send it to me.

Did you contact Amazon or the seller, and what was the outcome? You received a defective item and your out of pocket costs should be nothing. You should dispute the return costs with both Amazon and the seller, and the seller may tell you to dispose of the damaged item and refund you the purchase price.

You are better off finding a local framing shop to custom make something for you. They don't charge too much unless you opt for fancy frame material and matting.

> You are better off finding a local framing shop to custom make something for you.

Yes, local framing shops can make things in any size you want, it's what they do. And usually fairly reasonable, certainly less than the cost of international shipping.

I find them to be quite expensive. You can usually get a single 10 inch photo framed and matted for around $70 base around here.

I did a larger one (maybe 30" x 20") at Michael's with a nicer frame a few years ago and it ended up being almost $300.

I bought a A1 sized picture frame from a french seller for around $50 on Amazon. It was a total pain getting an affordable frame in A1 size, because the best we can get easily in America is a 24x36" which is just far enough off to be unusable.

I'd talk to some of the mail order frame places. I've used Frame Destination, and while they don't list metric sizes they'll let you spec custom imperial sizes with no premium at 1/16" precision (e.g. 23 5/16" x 33 1/16" is a bit closer). If you call they may be able to properly do metric sizes.

I find that price hard to believe. Has anybody else had an experience like this?

In my experience shipping prices from the US to EU are ludicrous. So much so that I'm surprised they have any business. This doesn't sound outside of the realm of possibility to me.

It was two decades ago, but when I lived in Germany it also seemed that they lost about 50% of the parcels that we sent between Germany and the US.

We send small A4 sized parcels to Germany quite a bit and often it never arrives, the same goes for France, if anything it gets lost more often in France. (shipping from New Zealand)

Bought some books in France and shipping to US was ~$10. It never arrived and contacted seller who sent another. A month later the 1st shipment arrives. So I contact the seller to let them know. They want it back and will cover the return shipping. So I go to USPS who informed me shipping to France was $90. At that rate it would be cheaper for me to fly with it, 2x25kg checked bags are a hell of a lot cheaper.

While I was living abroad my mom would send me care packages and I had no idea what it was costing her to ship it. I would send her aboriginal carvings or SE Asian cooking utensils all the time and it didn't cost nearly as much.

I recently returned a 13 inch laptop to Amazon from Hong Kong after they sent 2 and it was around $120 (reimbursed by Amazon - the original Amazon delivery charge was ~$18).

$370 did sound particularly egregious, but I just checked UPS' online quote site[1] and got a quote of $311-394 for a 5 pound, A1 sized package from California to Paris.

In my experience in Asia, Fedex, UPS, DHL etc. provide substantial discounts to customers with accounts, but one-off quotes to the US/Europe are typically very expensive.

[1] https://www.ups.com/mobile/quoteService

I recently returned a 13 inch laptop to Amazon from Hong Kong after they sent 2 and it was around USD120 (reimbursed by Amazon).

HK Post wants about H$350 to get a 3kg parcel from HK to France. That works out to about $45.

$370 did sound particularly egregious, but I just checked UPS' online quote site[1] and got a quote of $311-394 for a 5 pound, A1 sized package from California to Paris.

I'm not quite sure what A1 sized is (ISO A1 paper? Amazon A1?) but at 5 lbs USPS quotes between $60 and $130 to go from San Francisco to Paris. For international shipping from the US, the private companies will almost always be significantly more expensive and potentially leave you on the hook for expensive customs brokerage fees.

Around 24.5 x 33 inches. It might be the size kicking it up. I work in fairly large art sizes and prices go up really fast based on dimensions.

So ISO A1 then. I plugged in something like 24x33x5 as well as the Amazon A1 size (which is smaller) and got the same price range but with additional options for the smaller (Amazon A1) sized package. At that size, the weight is the determining factor at USPS (at least based on the rates I've seen) even though 24x33 is still considered an oversized package.

OTOH if you want to ship it express (Global Express Guaranteed — GXG in USPS speak) that comes out to around $265 (less if you pay online) and not all post offices will take GXG packages. $60 to $265 is the difference between a 1-3 business day expected delivery time and 6-10 business days.

I have. I left my Kindle on a plane in Germany while on vacation a few years ago and didn't realize until I was already on a different plane back to the US. I got a hold of at lost and found at the airport who said they had it and if I sent them a shipping label, they could mail it back to me.

When I started looking at different shipping options, UPS wanted about $107 to ship it back and FedEx was a similar price. I think I ended up using DHL which was the cheapest I could find at about $80, which still felt crazy to me.

I participate in reddit gift exchanges, and frequently get recipients in the EU. What would cost me ~$10-15 to ship in the states or somewhere in asia routinely costs north of $50 for European destinations. And these are small things, nothing like the size of a picture frame. The $300+ cost for the frame doesn't surprise me at all.

Depending on the destination, if you have a “______town” for that ethnicity (or a nearby one that they’re not at war with), they’ll have some shops that can do far cheaper rates by consolidating.

A polish shop near me can send things to most of W. Europe for far less than the post office can.

The Ukrainian credit union near me can send cash to anyone in Ukraine pretty cheaply.

I hadn't considered that at all. Thanks for the suggestion!

With USPS it will depend largely on how you send it. Priority Mail will be expensive (and fairly quick). A first class package (if you're within the limits) can be much cheaper if you don't mind the lack of tracking.

I mailed some 8x10s overseas in a rigid envelope and my friend swore up and down it would be too expensive ($30+). I think in the end it cost under $10 per envelope. Meanwhile international postcards from Germany were like 2€.

>Meanwhile international postcards from Germany were like 2€.

What are you talking about? I was just in Germany last year, and sent a bunch of international postcards for €0.90 each. That's the standard postcard rate for sending a postcard anywhere in the world. (It's €0.45 within Germany.)

Prices went up this year, and from my POV the German post was indecipherable. An international post card required two stamps. Deutsche Post is showing domestic postcards at 0.60€, but their postage calculator is showing international postcards at 0.95€. Fuck if I remember what I paid.

European here. Shipping from US can be insanely expensive. Once I had to pay $40 to ship a pen. I can totally believe the $370 figure.

Very much so all pathfinder role-players don't buy physical stuff from Piaso just wait and buy it from a UK wholesaler.

being a buyer off ebay what always surprised me is the next to nothing if not free shipping from China. It is good to see it changing as an article from 2014 [1] indicated how the USPS is getting soaked for the shipping on our side of the ocean.

if this is fallout from the trade issues it honestly is the only good outcome of them

[1] https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...

Note that the program described there, ePacket, is now profitable for the USPS. It took them a few years to scale up but it's been profitable for years now.


https://www.uspsoig.gov/sites/default/files/document-library... estimates $74 million profit for 2016 using internal data.

https://www.uspsoig.gov/sites/default/files/document-library... says they were profitable in 2015. See page 8 and footnote 17.

As far as I can tell, there's been no other public info released since then.

Excellent sources!

Noticed this direct shipping years ago, the first time it took weeks for a small part to be delivered. I think the absurdly low cost reveals just how much you can jam into a shipping container for the current flat rate.

Weirder when you think about it from a fuel efficiency perspective; it probably takes a few drops of diesel to move a t-shirt 5000 miles.

Edit: NOTE- if you still buy stuff on ebay, be sure to check the feedback page on bulk "US based" sellers. Currently some of them actually ship from china even though their location is set to the US/canada.

>Weirder when you think about it from a fuel efficiency perspective; it probably takes a few drops of diesel to move a t-shirt 5000 miles.

Yep, try looking up the fuel efficiency number for shipping freight by boat, train, or airplane. It's really amazing just how efficient boats are. There's a good reason our distant ancestors had worldwide trade routes centuries or even millennia ago using boats.

It also only allows it for small shipments, so it encourages the Chinese to sell directly. The per-item shipping cost wasn't close to UPU rates unless you shipped a whole container, and sometimes not even then.

Express marine freight will take 5 or 6 days, and cost close to nothing per Kg.

This is how most fresh produce gets shipped.

With paid for expedited customs clearance it may actually end up faster than ePacket.

That gets it to the port. From there to the final destination is a higher charge by itself than the UPU rates for the entire trip.

Sign up for pirateship and ask them to enable simple export rate. Makes international packages pretty reasonable.

Edit: no affiliation, I just use them for my business and they’ve been great.

I don’t have the background on this - help me understand why or how it’s cheaper for goods to ship cheaper from China than shipping within the US? The US taxpayer is subsidizing this? I’m shocked and confused.

It's a UN-based forced rate subsidy for developing nations that China still benefits from.

"According to the U.S. Postal Service, it costs around $20 to mail a small parcel weighing 4.4 pounds from one U.S. state to another, yet mailing the same package from China only costs about $5."

"The Universal Postal Union, a United Nations agency that sets postal rates among its 192-member countries, dictates USPS's artificially low rates. It bizarrely groups China – the world’s second-largest economy – with developing nations like Gabon and Fiji into its third tier of shipping rates, which are just a fraction of what the developed world must pay."

"USPS loses about $300 million per year on Chinese imports - losing about $1 per small package it delivers."


Parent is correct, despite being grayed currently by downvoting. UPU is an international postal treaty organization that was subsumed into the UN. Every country used to have conclude treaties with every other country (read Anthony Trollope's autobiography for a fine account of his negotiation of one such treaty between the the US and Britain). China has gamed the system on this rule, so the US is forced to threaten withdrawal to fix it.

The rules were probably set when China was a poor country like Fiji. They seem to have overtaken only in 2009. In 1980 GDP (nominal) per capita of Fiji was 6x China, now China is about 60% ahead. They've come up fast. (data https://en.wikipedia.org/wiki/List_of_countries_by_past_and_...)

In what sense can the UN "force" anything?

The article says that Trump is moving to pull out of or renegotiate the UPU agreement, which at worst is a Presidential choice, and it's not even clear to me why USPS can't do it unilaterally.

The UN can "force" rules upon us if we sign an agreement allowing them to do so. If we sign a treaty agreeing to abide by the rules set by a UN agency, then they can impose such rules, and under the US Constitution, such rules have the force of law within the US.

The rules might not be fair. Our recourse is to try to change the rules, and failing that, threaten to withdraw from the agreement. That's what we're doing.

> In what sense can the UN "force" anything?

Are we going to pretend the UN and UPU have zero power to dictate global shipping rates? Because that's exactly what they do.

They have zero power. The US can destroy the UN in a flash. But in that instance, humanity would pay much more than extra bucks for shipping crap we don't need.

A strong AND fair UN is a good deterrent for world wars. Of course, it's better to renegotiate any precieved unfairness than to just blow all violence avoidance safeguards like a world congress.

China got away with their economic trickery because of US corporate greed and short sightedness combined with the US public insatiable consumerism. But we humans have a short memory and we like being empowered by bully leaders.

Let's just hope we'll survive this age without too much bloodshed.

Planet Money did a great breakdown on this. Essentially it comes down to international agreements on the cost of doing the past mile of shipping for other countries.


It's cheaper to ship 10,000 items in a single container, than to ship each one separately, which is why mail carriers bundle items together (in bags, vans, containers, etc) instead of handling them separately all the way.

Domestic mail is like sending separate items, which get bundled together, then un-bundled again to deliver them to their final destination. All these steps happen at domestic wages, and at best with medium volumes. If there are not enough items to fill a container, it's still getting sent some other (more expensive) way.

Items from China get bundled by lower wage workers, the bundles are sent by lowest priority freight (usually a 7-45 day delay), bundles are only sent when fully filled in order to minimize costs per item, and sorted to minimize un-bundling costs.

This won't change no matter what, it's just economy of scale.

There are other factors like the reduced shipping costs for China set by the UN, or the fact that some will ship items at a loss just to convert Yuan to USD through Hong Kong, but ultimately the production vs. consumption imbalance is what decides most of this.

<in my mind>There's still humans in postal sorting centers?</>



Basically has to be right? Even if the shipping labels were completely standardized, you still have to deal with irregular package dimensions, composition, and label locations. The sort of stuff that robots aren't so good at.

It doesn’t help that a lot of Chinese packages come in poly bags, which are a lot harder to OCR than a flat box or envelope.

But intl shipping is based strictly on weight, so senders have every incentive to cut weight wherever possible.

I don't see how poly bags offer any weight advantage over an envelope. The advantage they have is durability: paper envelopes get easily ripped open, whereas poly bags are nearly indestructible for about the same weight and size. I've also noticed that many shippers now print their mailing/customs label directly onto the poly bags, so that probably makes the shipping process faster and more automated.

China had postal 2D barcodes for more than a decade...

Guys in the video seem to be showing the pile into sorting machines.

This ignores the actual reason, which is that USPS charges less for China->US movement than domestic movement even after bundling like Amazon does at the warehouse.

Exactly this. It has nothing to do with the boat cost or economies of scale because once it arrives it has to still go that last mile - or last hundred miles within the U.S. the same as any package.

This is great. The tariff agreements were never made with such a huge volume of small parcels in mind, many of them awkwardly shaped and causing problems with automatic sorting machines. And there’s the obvious ecological viewpoint as well.

I gotta say, the font size on a lot of these Chinese packages is stupidly small.

I guess they don’t realize how old my letter carrier is. Or some dolt figured they could save $0.00000001 on ink costs per package this way.

Maybe it is anecdotal, but whenever I order anything from China on Amazon, it takes exponentially longer to receive my product. Once I got Christmas items that I ordered in November the following March. There was no recourse when it happened either.

I know it's a long distance, but it's substantially longer than orders I've made from other parts of the world. So I avoid purchasing from there.

That's why you should choose "eParcel" at checkout. Get your items within 2 weeks, with a tracking number, for a very small fee.

Thanks, I will try that next time when i need to order from that part of the world.

It's very common to get (large) items via DHL from mainland China to SF in less than a week. The US simply doesn't manufacture the same set of items. Raising the cost to order items from China for political reasons will just hurt existing business. There's no alternative, I have a choice to pay more or not buy.

The US doesn't manufacture those items because it's cheaper to have them shipped from China. Raise the cost of manufacturing them there and importing them, and the balance changes.

The domestic vs. offshore production calculus is actually closer than a lot of people realize, in many instances. Often it's a choice between a highly-automated and capital-intensive production process in the US, vs. a manual process at a contractor in China. The combination of higher shipping and very low cost of capital in the US is a pretty good one.

Whenever someone tells you that it's impossible for the US to rebuild its manufacturing base, go take a look at factories in China: they're not that old (esp. the light industrial stuff). What was built in China in 20 years could be built in the US in the same amount of time or less, if the economic case was there. There's nothing magic about China, it's just a place where labor happened to be cheap at one point in time.

> The US doesn't manufacture those items because it's cheaper to have them shipped from China. Raise the cost of manufacturing them there and importing them, and the balance changes.

The US doesn't manufacture those items because it has no capability to do so.

There are no factories, no supply chain, no expertise and no known how.

There are some things that are cheaper to manufacture in US, (surprise!) if you manufacture for the local market, than in China, but them being simply cheaper still doesn't mean you can actually manufacture them.

I myself tried to setup an electric scooter factory, first in Canada, and than in Washington state. We were simply unable to find even moderately competent manufacturing engineers, nor the line workforce.

Of course, every consumable and every part had to be imported.

And both of the above meant that we decided to close the business in under 6 months.

Even in industries the U.S. does have manufacturing for the cost of manufacturing is insane. I shopped around to literally every apparel production company listed on any list in the U.S. 50% of the companies said they don't have bandwidth to take any more orders, they literally didn't want the business at any price. The other 49% didn't deal in 'small orders' basically anything under 5000. In the last 1% of U.S. companies the very cheapest cost was double the price to manufacture in China - where we got very few quotes because of the language barrier.So Electric scooter or simple piece of clothing, the U.S. just loses out in every single way. This is the smallest of a long road to challenge China, point being if the U.S. companies are more comparable in price they will become more profitable, will be more likely to expand and build, and buyers will be more likely to buy U.S. Not to mention, the U.S. really needs it's own version of Alibaba so businesses can shop easier, it boggles my mind that it doesn't exist.

Check out the articles about the cost of small screws in America.



Basically, the US simply does not have the infrastructure to manufacture complex items in mass quantities. We haven't invested in that infrastructure, whereas China has, so they have the ability to do this stuff, and we don't. So trying to build an iPhone in America is like trying to build an iPhone in Zimbabwe or Sudan or Armenia: the infrastructure simply doesn't exist and it isn't feasible to take on a project like that there.

America stopped being an industrial powerhouse decades ago, by choice, and you can't just bring that back overnight, especially when some other countries never gave that up and will easily out-compete you.

This is completely ignoring the fact that Chinese labor is significantly cheaper than the US as well as the standard of living. No amount of shipping is going to recover those costs unless you jack up the rates astronomically.

Nearly all the supply chains are in Asia. It would cost companies billions to relocate and they would just relocate to other areas where the labor is cheaper and they can get away with working their employees 12 hour shifts. Things like electronics for example would be extremely difficult to switch to a country like the US because there isn't a trained workforce here to deal with manufacturing small components. Plus, they'd be asking to be paid 20 dollars an hour with benefits vs China's probably 12 dollars and no benefits.

Also, leaving the UPU is as drastic as the tariff war because all it will do is cause countries to jack up the rates of incoming mail to compensate. Every time the US leaves without negotiation, there's no reason why countries won't retaliate.

The lax environmental laws also allow all sorts of products to be manufactured that would be uncompetitive here in the US.

Where there is a profit to be made, businesses will grow to fill the gaps. Right?

It's not about manufacturing, it's about shipping to end customers. Anything involving the USPS will have almost nothing to do with business-related shipping (b2b). Businesses don't ship stuff to each other with small packets, they ship large quantities in bulk. If you're worried about hurting existing businesses in the US, then stop worrying: US-based businesses aren't dependent on cheap postage from China on Aliexpress. Companies ordering parts from China are getting them shipped in shipping containers, or by DHL/Fedex, not by the USPS in < 1-lb packages.

Like I said, I'm just talking about anecdotal experiences. I have no stake in the trade war, I've just been wondering why shipping from there has taken months in some instances. I'm talking about a pair of shoes, not a washer & dryer.

They just don't have their act together in China in the cases where it takes so long. They put up 10,000 items for sale, stock none of them, then buy them as needed when something sells. They get weeded out eventually by bad reviews. The Chinese companies that do have their act together can ship to US in 3 days for DHL, or 1-2 weeks via subsidized USPS.

> largely because I'm subsidizing all the Chinese shippers.

I wouldn't expect shipping charges in the US to magically be lower after this change.

You don't really think any prices are going to go down right?

It’ll prop up some of the USPS’ inefficiencies that much longer.


Huh? I'm not sure what this has to do with taxes or government spending. The USPS doesn't get tax money; it's financed by its customers, like any other business, it just happens to be wholly owned by the federal government. Postal rates are high because they're forced by the UPU agreement to deliver Chinese mail for almost nothing, so they pass the costs on to US customers.

The USPS has been getting money from taxes to offset the debt they run each year. For many years now they have been in the red.

Fortune wrote about it back in 2015[1] and you can read the 2018 financial results[2].

Some tax money goes to the USPS.

[1] https://fortune.com/2015/03/27/us-postal-service/ [2] https://about.usps.com/news/national-releases/2018/pr18_093....

To offset the debt that Congress has forced on them by requiring them to pre-fund pensions and healthcare cost for employees who don't exist yet. And Congress sets postage rates as well, so USPS can't raise rates in order to pay down their congressionally-mandated debt without getting approval from Congress. And the requests to raise rates are often denied.

Congress sets domestic letter mail rates.

Everything else is a free-for-all.

I’m sure Amazon’s direct delivery system also stuck a knife in USPS.

That first article is severely stretching the definition of "getting money". Virtually all of the alleged $18B is attributed to the law that gives the USPS jurisdiction over your mailbox.

The second just reflects Congress's attempts to deliberately hobble the USPS in 2006 by requiring them to suddenly pre-fund their pension obligations.



> The law requires the Postal Service, which receives no taxpayer subsidies, to prefund its retirees' health benefits up to the year 2056. This is a $5 billion per year cost; it is a requirement that no other entity, private or public, has to make.

> hobble the USPS in 2006 by requiring them to suddenly pre-fund their pension obligations

Maybe it's a flawed methodology (arguable), but being fiscally responsible about pensions is something that should be encouraged. In California pension liabilities are out of control and at impractical levels, causing all sorts of havoc and manipulation (corruption). https://www.vcstar.com/story/news/2018/12/07/governor-jerry-...

Fully funding pensions out to 50 years in the future goes beyond "fiscally responsible". Consider that the nominal working lifetime of an employee is only 47 years (18 - 65) -- they're being required to fund pensions for hypothetical employees who are still in high school.

Postal workers' retirement age is 55-57 (https://about.usps.com/manuals/elm/html/elmc5_058.htm).

Oh, ha -- so then change "high school" for "grade school". Either way, it seems ridiculous to require a pension to be fully funded years before its beneficiary is even hired.

Talking about people in high school who will end up in public service is irrelevant.

Having more money in the bank than you take out for a car loan is fiscally responsible. Not exactly. More than. That's WITHOUT your holdings (bank account balance) being subject to market forces, which is a compelling reason.

If fiscal responsibility were the goal, they'd have required the other federal agencies to do the same. That this specifically targets one of the few agencies ripe for potential privatization is... suspicious. Even if it made fiscal sense, the sudden switch is problematic.

> If fiscal responsibility were the goal, they'd have required the other federal agencies to do the same

That's not how the Federal government works. It's a LARGE organization that sometimes have people with philosophies align. There is no chance that the military would prefund pensions. I think that, toward the initiative to make the USPS free of subsidy now and in the future, it made perfect sense. The USPS workers used to talk about everything moving electronic, but that's not happening in our lifetime. 50 years is just "the near future", respectively.

OK, let's reword that a bit.

Why didn't the same Congressional Republicans who pushed through the Postal Accountability and Enhancement Act of 2006 push for similar changes to how other federal agencies fund their pensions?

Why won't the military pre-fund pensions? Why shouldn't they do the same "fiscally responsible" thing for veterans benefits?

> Why didn't the same Congressional Republicans who pushed through the Postal Accountability and Enhancement Act of 2006 push for similar changes to how other federal agencies fund their pensions?

I don't know. Probably something to do with the majority of the US population liking the USPS but not everyone wanting more military spending.

> Why shouldn't they do the same "fiscally responsible" thing for veterans benefits?

Probably because congress would never approve another 20%+ on top of the current military spending and still get all their pork in. These topics are an amalgam of political decisions as well as leadership decisions.

I vote for more accountability, reliability and term limits in government. That's rarely a topic from either major party.

It's not "any other business"; it's a shared resource that improves the lives of all citizens. And we WANT it that way. "Any other business" would not offer or employ any of the features we expect from our Post Office (systemwide flat rate parcel & 1st class letter, 6d/wk delivery (for free!), lack of surge/congestion pricing). If you think UPS and FedEx aren't taking profit away from USPS think again.

It has a legal monopoly, the power to tax competitors under the Private Express statutes (this is why there is no FedEx First Class mail competitor), it is exempt from local taxation, and doesn't pay federal taxes to the same extent a regular business would.

What is the UPU and how'd they get this power?

There’s a really excellent planet money podcast about this. Back when the US was a major exporter the UPU was great for US merchants.


> Back when the US was a major exporter the UPU was great for US merchants.

The US is the world's #2 exporter. $1.57 trillion versus $2.15 trillion for China. China's figure peaked a few years ago, the US is likely to narrow that gap, especially with US energy exports continuing to ramp up. US exports of goods are near an all-time high after adjusting for inflation.

Universal Postal Union is a UN body that manages the relationships between different national post offices. They set standard rates and stuff for all member countries so that each country doesn't have to negotiate a treaty with any other country it wants to send international mail to.


Universal Postal Union: http://www.upu.int/en.html

"With its 192 member countries, the UPU is the primary forum for cooperation between postal sector players. It helps to ensure a truly universal network of up-to-date products and services."

The USPS gets a monopoly on its gigantic market from the government. That is an enormous government subsidy. It is very much not like any other business.

The USPS does have a special relationship, but it isn't a one way street. First, it isn't a monopoly -- there are many other shippers competing in the profitable segments of the market. Second, USPS is obligated to service every location in the US, and at government-controlled prices.

USPS will deliver, door to door, a letter from Nowhere, MT to Remote, GA for $0.55, even though they take a loss on it. Try to get Fedex to match that.

> Second, USPS is obligated to service every location in the US

I’ve heard this many times. I also know quite a few places that USPS does not service.

Perhaps you should look at USPS Publication 542, https://about.usps.com/publications/pub542/welcome.htm, which describes how they have a monopoly and the power to levy what amounts to a tax on anyone that competes in a prohibited way.

the commenter acknowledged that, and pointed out that there are responsibilities that come with their privileges.

> First, it isn't a monopoly

But it is. A simple googling gives many hits confirming this simple fact. This one seemed most informative:

> The USPS actually has two legally enforced monopolies, as per Title 39 of the US Code. One is over the delivery of anything defined as a “letter,” which is within certain size and weight limits. The second is over the use of your mailbox.

From https://www.econlib.org/rick-geddes-explains-the-postal-mono...

That is defining monopoly in a very constrained way. You might as well be complaining that USPS having a monopoly over delivering watch fobs. FedEx isn't trying to capture the $0.55 letter delivery market.

It's the textbook definition of a government instituted monopoly. Monopolies don't get more monopol...ied than that!

> FedEx isn't trying to capture the $0.55 letter delivery market.

Because that would be illegal. Otherwise they would.

This is incorrect. There's no mechanism by which cheaper prices for UPU mail translates into higher prices for US customers.

If they had pricing power they'd raise prices regardless of fixed losses elsewhere.

The USPS has to ask permission from regulators to raise prices, unlike their more private counterparts.

And that is evaluated on a per market basis. The assertion that losing money on some services causes them to raise prices elsewhere is baseless.

Even if there was a mechanism the numbers don't work - there's orders of magnitude more packages sent within the US than into the US from UPU.

I was commenting on your remark about USPS lacking pricing power. I wasn't really disagreeing with you, just pointing out some of the moat between them and pricing power.

Somehow I doubt that this will lead to more affordable shipping in the rest of the world.

The postal service has beenbadly run for decades, with excess deliveries - once a day. Make delivery once a week and chageextra for daily delivery. As e-mail sucked away letters the USPS staff all stayed employed with fat wages as well as fat pensions. Now those excess people and unfunded pensions have sucked USPS dry and allowed UPS and Fedex etc to craft specialized services to dan lots of $$ from the system. Deliver all mail to PO Boxes, once a week.Daily delivery is a special fee delivery.

This aggressively selects against the elderly, the poor, and rural and even many parts of suburban living.

I am not, as a rule, particularly fond of rural or suburban living due to free-rider problems, but as long as we choose to subsidize those lifestyles, a prompt and rigorous postal service is necessary. And as long as we have poor (and old) people kept out of the technological race, it is incumbent upon us to not stick a thumb in their eye.

If you want to give them welfare, give them welfare. It's better than subsidizing inefficient systems that distort the market.

It would be cheaper as a society for us to just pay one-time to relocate these people to more populated areas and set them up with new jobs (if they can work), and then cut off many of their services. Those who choose not to avail themselves of the relocation offer would then have to pay extra for services.

Why is our society responsible for subsidizing rural dwellers' lifestyles anyway? Note that I'm not talking about people living in small towns. These people choose to live this way because our society subsidizes their lifestyle, and don't actually need to live there. People who do (e.g., farmers) don't need any subsidy as they make enough money to afford living where they do. I grew up in the rural South; these people aren't actually contributing to the economy in any way, they just like living in the middle of nowhere, and are enabled by cheap gas prices and the subsidized provision of many services.

Lots of speculating why it is cheaper to ship from China than domestically, a lot of it misguided.

The root cause is that quite a few years ago the consortium of national postal providers which setup agreements on who pays for which parts of international shipping decided that China was classed as a developing country and given subsidized rates by other countries. This wasn't a big deal when the agreement was made because it was before the days of pervasive online commerce, and there just wasn't that much sent from China to other countries via the postal service.

I encourage everyone interested in this to checkout this podcast episode from NPR's Planet Money: https://www.npr.org/sections/money/2018/08/01/634737852/epis...

> The reason for this price gap, Jayme claims, is a secretive group of postal policymakers that meets every four years to fix international shipping rates. A kind of postal illuminati.

> Today's episode: A conspiracy theory that's actually real. How the decisions made behind closed doors make it cheap to buy things from across the world, but are also distorting the global economy.

They did a really good job explaining the situation in that Planet Money episode.

++ Came here to post the Planet Money episode. :)

> This is great news for U.S. sellers, especially eBay sellers.

Exactly the intended consequence. Why should US taxpayers subsidize shipping costs for products to come from China? It made no sense at all in today's economy unless the only thing you care about is paying less for your goods regardless of the consequences, which I don't think is a majority position of adults today.

The actual consequence will be Chinese sellers using US warehouses and drop-shipping from there.

Others send over a container with each ordered good and slap a local post’s label on it.

Possibly that local post’s label is attached in China and the container just gets dropped off at a USPS DC by the private freight forwarder.

It’s already fairly common.

Overall, a few more US jobs, and maybe more USPS revenue for what are now domestic shipments.

Edit: OR these buyers Shift to Amazon, which can deliver for less than USPS can via private courier, and pool every more items per delivery.

Is that a problem? Seems like if they do that then it's US domestic mail, playing by all the same rules (and high rates) as any other domestic mail item. Competing with Chinese shippers would look exactly the same as competing with anyone shipping out of LA/Oakland/Seattle.

This is common in Australia and there are some problems. Any faulty goods purchased here are to be returned to the merchant (rather than manufacturer) and some of them make this very difficult by providing a local sender but a foreign 'return' address. I'm pretty sure it's not strictly legal, but it's too annoying in most cases to fight it.

It also gives them a local business address so they can advertise local shipping but a lot of the time you have to wait for the next cargo shipment to come in so something that should take a few days now takes a week or two. This can be helped with reviews but we all know how those get gamed now with sellers flooding reviews or shutting down and starting as a new account.

These are both differences that arise from a business not having a real local presence, but just the bare minimum presence 'for show'. Luckily, most of them are fairly inept and make themselves obvious on eBay by pasting Australian flags and Koalas all over their store pages :)

It’s just not going to be a boon to US drop-shippers, the Chinese ones will still have a lower cost of operations by dealing direct and almost 100% Chinese labour costs.

I think most will agree that is a "fair" competitive advantage.

What myself and I think most find problematic is that the USPS is actually subsidizing Chinese packages inbound to the US, to the point where its somehow cheaper to send from China than domestically.

That may have made sense at some point when China was still in its embryonic phase of development, but they are well past the point where this is necessary or desirable.

The fact it went on this long is the confusing part to me. Why didn't anybody come and say "Hey! This is weird. Let's stop this" before 2016?

Probably a combination of Politics, not-rocking-the-boat (generally), and a question like yours.

With globalization increasing as it has in the past few decades a lot of the old shipping and carriage agreements become counter productive.

I think the way this happened certainly looked like (petty)"Politics" and "not-rocking-the-boat (generally)".

I'm sure most would expect "Globalization" as an idea that was generally in the air would have influenced those who took the actions here as well as the people allowed those actions to happen (which had to include quite a number of US officials).

The thing is that definitely involved a huge amount of money flowing in various directions and so I tend to believe a portion of people making this and allowing this to happen were considering the interests involved also. Especially, some people (small US operations) were screaming about this from the start, why it was hard for them to be heard is worth considering.

Honestly? Probably because partisan politics has wrecked my country. China as a trade manipulator has been a Republican talking point my entire lifetime. So Dems wouldn't touch it, regardless of the merits.

And before that? Well, it wasn't a big problem in 2006.


It really isn’t a personal issue. I believe the issue is non-partisan (and no brainer). Or maybe I’m being naive in today’s world in thinking that.

Or certain others were much too friendly with China?

You seem to be completely overlooking the fact that it is way cheaper to ship an item from China to a specific location in the US, than it is to ship the same item from within the US.

It’ll be good for the USPS (or maybe not if people just order off Amazon and they deliver), but the benefits to US jobs will be oversold.

I haven't really heard jobs being a part of this discussion at all, the reasoning and the rhetoric has been about leveling an clearly unfair playing field.

The USPS will certainly make more revenue, and in turn they should be able to pass that on by reducing shipping costs for people shipping from within the US.

For companies drop-shipping from China, regardless of whether the person running the business is in the US or in China, the impact is the same. But for US based businesses that inventory items and ship out of the US, this change would be a big advantage.

> The USPS will certainly make more revenue

Maybe. The main benefactor may be Amazon people switch to them. They have the lowest domestic shipping costs (presumably, since they’ve implemented their own in-house couriers).

The actual cost of USPS of delivering a package is kinda complicated. If USPS is going by your house every day, how much do their costs go down if they have 1 less package to drop off?

Dividing total costs by packages delivered doesn’t tell that story.

> Maybe

If prices are raised as significantly as suggested, you think they'll only maybe make more revenue? If the sales completely stopped, or there was a mass exodus (eventually) to Amazon there may not be an increase, but this seems fairly unlikely in the short term.

> If USPS is going by your house every day, how much do their costs go down if they have 1 less package to drop off? Dividing total costs by packages delivered doesn’t tell that story.

Of course, but we're discussing revenue.

Americans should pray that USPS doesn’t only worry about the short term.

Indeed. But that's yet another topic isn't it.

Seems related enough.

Let's finish the first topic before moving on.

But won't there be import duties on the goods from china, sales tax consequences for goods in the US, and regulations that will have to be met?

Nothing wrong with that. If a Chinese company wants to ship things over in bulk, break them up here in the US and ship them via the USPS, more power to them. They'll need to incorporate in the US, pay taxes in the US, probably rent space in a US warehouse, and generally play by the same set of rules as a US company that buys stuff from China and imports it for sale would.

I'm all for having a level playing field; the UPU rates were anything but.

I think the air/sea container will arrive in the US and go straight to the USPS DC, bypassing the US incorporation, US taxes, and US warehouse.

They will pay higher USPS rates, but that’s about it.

Yes this is what most of us do anyways. We have the manufacturers deliver directly to a 3rd party logistics company that then packs and delivers the individual products here in the US.

They'll have to raise their prices to accommodate the additional expenses, unless their plans include selling at a loss to eliminate competition.

Lord help any industry that attempts “dumping” with today’s president.

Wouldn't that also have sales tax and product liability consequences?

The goal of the UPU was to have one rate for international shipping based on sending country vs. per destination pricing. Countries agreed to eat the costs. This produced things like the International Postal Coupon which are great.

Like Internet peering agreements, the UPU model only made sense when there was about the same amount of traffic going in each direction. In that case, it makes sense for each country to just pick up the cost of domestic last-mile delivery, because other countries are doing the same for its outbound packages.

The problem is when there's a continuous structural trade imbalance, and more packages flow one direction than in the other. Then you have a de facto subsidy scheme, and it makes sense to terminate or renegotiate the agreement and switch to something more along the lines of sender-pays.

Subsidy to whom exactly? Remember the packages only flow because your end wants them.

US taxpayers are not subsidizing shipping costs. Domestic shippers probably are.

"Zero tax dollars used. The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations."


Saying "US taxpayers" is essentially the same as "US citizens". The parent wasn't suggesting direct tax payments into the postal service.

A better question might be to ask why US taxpayers should continue to subsidize direct marketers. Thats all I get anymore. Everything else is electronic.

It's my understanding that direct marketing mail helps keep the USPS profitable. Here's an excerpt from a report on whether they should offer simplified addressing for saturation mail (every address in an area), but the point is more general.

Source is https://www.uspsoig.gov/sites/default/files/document-library..., and emphasis is mine:

> The implementation of new products that support customers and improve its bottom line is of paramount concern for the Postal Service. In fact, profitable new volume benefits all mailers and consumers in the long run by helping the Postal Service fulfill its fundamental obligation of affordable universal service. Volume is significant because the Postal Service is a network industry and the vast majority of the costs for its delivery network are fixed. Greater volume spread across this network would lower the average unit cost of every mail piece delivered. A service such as simplified address mail, which has the potential to significantly increase delivered volume could dramatically help the Postal Service and all users of the network.

In other words, they are going to visit everybody's mailbox 6 days a week no matter what. Stuffing more mail into it while they're already there costs them very little.

They are used by politicians during elections. You can expect the subsidy to last "forever".

>unless the only thing you care about is paying less for your goods regardless of the consequences, which I don't think is a majority position of adults today.

It may not be the stated position of adults today, but it's their revealed preference.

Given that income for the bottom 40% has barely budged in 20 years, keeping the price of goods low (i.e. low inflation) is probably a net benefit to America, no?

This is one way to mitigate knock off products from China. If the shipping costs come up to the norm, they won't always (if ever) be the cheapest product so the real one will win out more often.

Various products will have different tipping points where it just doesn't make sense to ship and/or they aren't getting enough sales to justify it.

Personally, I like it and it seems like everyone wins.. except people who undercut the real product with cheap, inferior knockoffs.

Rather a lot of name brand stuff is also getting shipped from China.

Yes, but it is being shipped in volume containers. That is both more efficient all around, and much easier for the customs inspectors to find and divert counterfeits than in waves of individually packaged items.

Nonsense, not everything from China is a knockoff and there are a lot of genuine non-copied products. How weird to think their economy is just "inferior knockoffs".

Resources aren't copied and value-added products like steel aren't either although techiques to produce or grow may be.

Please cite some examples of geniune products. China is known for making existing products cheaper. The techology area is mostly copy-paste.

Almost any top brand you can think of manufactures extensively in China.

Can someone shed light on the subsidy structure behing the current model, are shipments from China being subsidized by shipments from other countries or is there government money involved ?

In any case this kind of subsidy is not necessarily bad for developing countries, and it was probably instrumental in China's phenomenal economic growth, but it is now in the conquering superpower category, it's time it loses this advantage.

There's a fantastic Planet Money episode about the Universal Postal Union[1] and why this is a problem.

Basically, the UPU assumes that a country will send about the same amount of international mail that it receives. There may be an imbalance between any two countries, but in aggregate, it assumes that these imbalances will net out. Furthermore, the UPU sets rates based on the sending country's costs. Since China was classified as a developing country, it was very cheap for Chinese to send mail into the international mail stream. This was justified because China's last mile delivery for mail received from other countries is also very cheap.

However, with the huge US-China trade imbalance, these assumptions no longer hold. U.S. shippers were at a major disadvantage because of this.

[1] https://www.npr.org/sections/money/2018/08/01/634737852/epis...

Does this also affect Europe? I remember that there was free or very inexpensive shipping from China to Spain.

Yes it does, although AFAIK noone in Europe is quitting the postal union yet.

However here in Norway VAT is being introduced on all packages now, which is going to cut Aliexpress down quite a bit. Previously it was duty free below €35 combined value & postage.

I pay Australian GST on AliExpress imports, but it doesn't make local outfits more viable. I buy hobby electronic components primarily, local suppliers are often one to two orders of magnitude more expensive, not just a few percent more.

One or two orders of magnitude? Isn't that ten-times or a hundred-times more expensive? What product could possibly be marked up by 100x?

You can get 8 resistors for 55c retail from Jaycar or 100 for around the same price from AliExpress. So it's in the ballpark.

CR2032 batteries are a common item with an order of magnitude markup (20c each vs multiple dollars here).

You assume it's the same product.

If you order electronic components from China, you're never quite sure what you get. You might get the stuff that failed QA testing at the factory, or second-hand stuff that's soldered off some old PCB. Or sometimes you get something else entirely... I ordered some LM35 temperature sensors in the TO-92 package, and got some cheap transistors instead. Case was TO-92, markings where as expected for LM35, but a quick test betrayed what was really inside.

In this case I expected them to be fake, based on the price, I just wanted to see what I got. But even if the part is appropriately priced you can't be sure.

A bare atmega328p-pu is 10x the price. LEDs are about 15x. Resistors and caps are, as another poster said, huge, but you're possibly getting factory seconds from an already mediocre brand. I buy decoupling ceramics and 5% resistors from China for peanuts but stick to RS online for caps where I depend on characteristics or reliability.

China sells a lot of older stock via AliX, so newer chips are hard to find and might be near the same price, but older clonable classics like a 2n7k are dirt cheap and just as good.

If someone in China sends a packet to the US via China Post, China Post are responsible for getting it to the US, while USPS are responsible for getting it from wherever it lands in the US to the recipient. An agreement made between all national postal services via the Universal Postal Union determines how much China Post have to pay the USPS for this final leg, a fee called the "terminal due".

The UPU agreement on terminal dues sets a sliding scale based on the sending country's level of economic development - less developed economies pay less, while more developed economies pay more. The logic behind this is fairly obvious, in helping less-developed economies to fully participate in the international mail system.

The problem for the USPS is that they are obliged to handle large volumes of mail originating in China, but the terminal dues for lightweight items are substantially below their cost of delivery. The handling of these items is effectively cross-subsidised by USPS customers.

The US is demanding that terminal dues should be set at a flat rate based on domestic postal costs, with the possibility of direct subsidies for less developed postal systems. This would partly (though not completely) reduce the competitive advantage for Chinese e-commerce sellers.

The explanation I've heard is:

The Universal Postal Union rules for how international mail is paid for were established at a time when most mail was letters, and most letters would need a reply by letter.

So on average, every international letter delivered in Country X behalf of the Country Y postal service would be balanced by one letter delivered in Country Y on behalf of the Country X postal service.

No exchange of money between countries needed, and if a country had daily/weekly mail delivery or dense/sparse population or expensive/cheap postal employees or rich/poor citizens or tax/subsidy on post or efficient/inefficient processing that was no other country's business, so long as the number of letters balanced.

In the modern age, the number of letters doesn't balance, because no-one places their AliExpress order by mail.

Even if they did, there's often a substantial cost difference between delivering an order form and delivering the goods being ordered. I'm not sure I've ever ordered something as small and light as a letter.

There's a good Planet Money episode about this: The Postal Illuminati (https://www.npr.org/sections/money/2018/08/01/634737852/epis...)

This was the first thing I thought of when I read this, it's fascinating the way this system actually works (or doesn't work.)

I think the issue was in mistaking China for a developing country for so long. It’s different from western countries, but not undeveloped. Its size, population, culture, heritage, and history all play a role in how the ethnocentric West misinterpreted it.

I'm not sure that "mistaking" is the right word.

For years the United States has protested the cheap UPU rates that China gets. But the UPU still classifies it as a "developing" nation.

China is the world's second-largest economy. It doesn't need or deserve the artificially cheap rates anymore. China shouldn't pay less to send packages overseas than countries in Africa.

By leaving the UPU, the United States can set correct prices.

It's one of those situations where China claims to be a developing nation when it suits its needs, and then claims to be a developed nation when it suits its needs.

If you're going to play in the big leagues, you have to play by big league rules.

> China is the world's second-largest economy. It doesn't need or deserve the artificially cheap rates anymore. China shouldn't pay less to send packages overseas than countries in Africa.

China is a undeveloped nation. There are still parts of China where people live on under $40 a day.

Developed nations have a moral obligation to help undeveloped nations

There are parts of America where people live on $40 a day.

When does China claim to be a developed nation?

Also, is there any reasonable metric by which China is not a developing economy?

is there any reasonable metric by which China is not a developing economy?

Here's one: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

Here's another: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

By those metrics, Bangladesh is more developed than Luxembourg.

That's not what I'd call "reasonable." You have to normalize by population.

I think it’s a lot more complicated than that. You must divide by the population if wealth/development/whatever metric were uniformly distributed. But it’s a massive country with enormous diversity in statistics on all fronts. There are pockets far more developed than the average American town and even the most developed cities in other countries, and villages hundred of years “behind.” Debating whether or not to call it “developed” means missing out on a whole lot of nuance.

You can’t even compare cities to cities, since even an entity like Beijing is structured and defined so differently from how we define a city like NYC or Chicago.

This is why I stressed the ethnocentrism of it all. It’s a country that has developed tremendously but not at all in the same way that we have traditionally defined development in the western sense, and a lot of that comes from its size, its historic dynastic cultures and their political structures, and its population (count and local densities).

Then cite the GDP/capita of individual provinces or cities. Citing the GDP of the entire country is meaningless, though, given that it has 1.4 billion people. China is not more developed than Monaco, even though its GDP is thousands of times larger.

I haven't ever heard of the Chinese government claiming China to be a developed country - that was one of the original contentions above. I also think that by any reasonable metric, China is a developing country. There are pockets that are much more developed than others, but the country as a whole is still very far behind developed countries.

You should have posted GDP per capita, not just total GDP.

It's not really a subsidy so much as an underpayment by the foreign goverments[1]. There is no tax money involved, and all the subsidizing comes from the increased revenue from raising domestic shipping costs.

The UPU has been around for decades, but it's only been since 2010 that the USPS has formalized the process with the "ePacket" shipping.

[1] https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...

> There is no tax money involved, and all the subsidizing comes from the increased revenue from raising domestic shipping costs.

If the USPS loses money, which it has been every year recently, who pays the difference?

We do, the domestic customers of the USPS. But not via tax money; rather via increased local rates.

UPU and epacket are different things, and epacket is currently profitable for the USPS.

>but it is now in the conquering superpower category, it's time it loses this advantage


Good. It should not be cheaper to ship across the Pacific ocean than ship domestically.

Bad for the environment as well for trans-pacific shipping to be cheaper

Aren't ocean vessels one of the most efficient forms of transportation in existence?

In terms of dollars per unit weight moved, yes. They are not only moving massive amounts of cargo with low drag, they're also relatively lightweight compared to the product being moved. Also, there's no maintenance cost to keeping a flat path across the Pacific like there is in keeping roads free of potholes.

In terms of environmental damage, not at all. Container ships burn some of the nastiest, most sulphrous and damaging forms of crude oil in existence, with little to no emissions controls.

I think rail transport is best, but I could be wrong.

A lot of Chinese ships burn spent USA motor oil (illegal to burn in the USA) on the way home, ergo, free trip home! And the entire smoke plume lands in the USA . .

Do you have a source for that, I can't seem to find a reliable one

Sulfur dioxide emissions at sea are not that damaging compared to in land. They did make some zero emission cargo ships but it was pretty expensive due to crew complement for the reactor.

Interesting. There is only one operational cargo ship powered by a nuclear reactor - https://en.wikipedia.org/wiki/Sevmorput

Next year it will enter into force the IMO regulation on a global sulphur cap, vessels can only burn a low sulphur bunker (the fuel for a commercial ship). http://www.imo.org/en/MediaCentre/PressBriefings/Pages/13-su...

You are wrong. Even in terms of emissions ships are the most efficient way to transport goods, in terms of km-tonnes.

I appreciate that you cited a paper, but I think you are overstating. The paper discusses CO2 emissions, which indeed are lower for transport by ship than by trains. But the parent was talking about "environmental damage" from ships that burn the "nastiest, most sulphrous and damaging forms of crude oil", and thus was referring to pollutants other than just CO2.

This report, for instance (I have not read it completely) says "Rail is generally the cleanest mode of transport for most pollutants" and "Maritime shipping is one of the cleanest mode of freight transport, except for PM and specific sulphur oxide (SOx) emissions". While there is lots of emphasis currently on CO2 emissions, other pollutants are also worth considering.


Granted the US and EU could agree to regulate emissions from container shipping.

UN is doing something already. By January 2020, the limit for Sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.50% m/m (mass by mass).


The shipping industry is responsible for a significant proportion of the global climate change problem. More than three percent of global carbon dioxide emissions can be attributed to ocean-going ships. This is an amount comparable to major carbon-emitting countries -- and the industry continues to grow rapidly.

In fact, if global shipping were a country, it would be the sixth largest producer of greenhouse gas emissions. Only the United States, China, Russia, India and Japan emit more carbon dioxide than the world’s shipping fleet. Nevertheless, carbon dioxide emissions from ocean-going vessels are currently unregulated.


>The shipping industry is responsible for a significant proportion of the global climate change problem. More than three percent of global carbon dioxide emissions can be attributed to ocean-going ships.

According to wikipedia, ships account for 2.2%[1] of co2 emissions. However, the transportation sector as a whole accounts for 29% of co2 emissions. Considering how much ships move, that's pretty good.

[1] https://en.wikipedia.org/wiki/Environmental_impact_of_shippi...

[2] https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emis...

Not really a helpful or fair comparison. Global shipping emits more carbon dioxide than India, but that's literally apples to oranges.

It might be easier for the shipping industry to reduce it's emissions, or it might be easier for India. The benefit(s) of India polluting is spread across 1.3 billion people. The beneficiaries of polluting by the shipping industry is presumably the whole world, though the benefits are unevenly spread. It might be easier or more impactful for one to reduce while the other doesn't, but again, we can't know without more data.

A better comparison would be between shipping and air freight. Or make the case that we don't need to ship if we can produce locally instead. Maybe it could be supplemented by saying that if the cost of the externality (pollution) was borne by the producer of the products, then it would incentivize local production.

> Or make the case that we don't need to ship if we can produce locally instead.

My impression was that this was the argument being made. Shipping emissions could be cut dramatically if more things were made close to their end destination.

4.5 million gallon tank 225 tons per day I can't believe people think their cars can even hold a candle to this type of fuel consumption.

There are much more cars, so yes, overall cars can definitely be consuming more fuel than ships.

Once the packages reach a domestic port, they still have to compete the same domestic journey as a local package.

No. The 15 largest cargo ships produce more pollution than all the cars in the world combined.


For certain kinds of pollution, yes. By the same logic, so do nuclear reactors, since cars don't tend to release fission products (even if reactors do so very, very rarely)

Efficient per unit distance, yes , but they're also travelling more units of distance

I don't know about that, I'm unqualified to answer. However, ocean liners do use very dirty fuels (compared to automobiles) and very dirty engines with respect to sulfur and nitrogen oxides emissions

Except for the pollution. That bunker fuel is terribly dirty.

Athens Greece has a pall of smog over it mostly coming from the ships in the harbor as they sit there spewing columns of thick black smoke into the sky. I don't doubt some of the pollution is from vehicles, but it's pretty noticeable how the particulate smog starts in the harbor and moves inland.

Only compared to alternative forms of transportation for the same distance, like airplane.

Still, shorter is better.

Perhaps, but the price of fuel already incentives shippers to use less of it. It might be better mpg to ship by sea but by shipping such a huge distance much of that may be negated

Not more efficient than trains. Environmentally, we'd all be better off if goods to the US were produced in Mexico and shipped into the US by train.

Yes more efficient than trains, though only by a factor of 2 to 3. 0.209 to 0.35 mJ/tkm for rail versus 0.11 for ocean freight. Domestic water freight (river barges) is 0.16.

Road freight is 1.3 to 2.4 and air freight is 6.9 to 10.5 waaaay worse than any of these.


Most efficient price/volume wise, and dirtiest, environment wise



I am trying really hard to not post a bunch of expletives here, too many people on HN downvote facts, even with sources (my fault for thinking everyone has a brain and can use Google or something). Wtf happened to this site...

UPU shipping from China is actually "airmail".

I've even fantasized about a tax for the movement of goods no matter how they're moved or how carbon neutral the method.

For what purpose?

Not sure. I'ts an unfinished thought but something I've toyed with in my mind. Mostly because I prefer local and the movement of goods is unnecessary a lot of the time. Environmental reasons for the most part- moving unnecessary junk around the world is still excessive even if it's done efficiently.

Any tax beyond that which internalizes actual externalities will just decrease market efficiency, your opinion on what goods are 'unnecessary' and how far an object in a supply chain can move before it becomes 'excessive' notwithstanding. Companies don't ship goods around just for the hell of it; they do it because it serves some business purpose.

Why is it excessive if it's done efficiently? Especially more efficiently than local!



I live in China and sometimes I buy made in China goods shipped from the US as it's cheaper.

That's hilarious.

I'd be curious to see the math, at least for the West coast and more generally to US coastal areas. Insofar as I'm aware, sending cargo by sea is very cheap compared to sending it using airplanes and long distance trucks.

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