EcommerceBytes readers have been saying for years that it’s unfair that Chinese sellers can ship some small packages to US buyers for less than it costs domestic sellers. But after a ruling this week designed to level the playing field, a few expressed concern that it could end up adding to their costs.
At least partly due to political pressure, the USPS requested permission in November to change Letter Post small packets and bulky letters, known as Inbound E format, from “Market Dominant” to “Competitive.”
The Postal Regulatory Commission (PRC) granted the request in a conditional ruling on Wednesday, which will make shipping small packages from overseas to the US more expensive. As we reported on Wednesday’s EcommerceBytes Blog, we’re not yet sure how it will impact ePacket agreements that the USPS entered into with Asian postal services.
There was a range of reaction from sellers in the comments of the blog post, from satisfaction, to cynicism, to dissatisfaction – the latter from sellers who predicted the ruling would cost them.
“What is welcome about a raise in shipping costs from China,” one seller asked?
“Some of my raw materials come from China and only China, there are NO US suppliers for these materials,” she said. “Now those products, which I buy in small packets because they are expensive and ever-changing, will cost me more. Should I let my profits take a hit or charge the customers more?”
In Wednesday’s ruling, the PRC wrote, “The Postal Service observes that many domestic small businesses that ship to U.S. customers have supported price increases for Inbound Letter Post small packets and bulky letters.”
Here’s what the USPS had written in its November request under a section asking it to provide “a description of the likely impact of the proposed modification on small business concerns”:
“The transfer of Inbound Letter Post small packets and bulky letters, and inbound registered service associated with such items, to the competitive product list is unlikely to result in any disproportionate impact on small business concerns.
“The users of these products are foreign postal operators and, vicariously, foreign mailers, whose interests are not a direct or primary concern of U.S. postal regulation.
“Indeed, many U.S.-based small businesses that ship to U.S. purchasers have supported an increase in prices for Inbound Letter Post small packets, due to their view that the current rates distort the market to the disadvantage of U.S. mailers and small businesses.
“While a price increase might increase U.S.-based small businesses’ costs to import supplies and inventory, those concerns should be ameliorated by the fact that competing products will constrain the magnitude of any price increase above what is necessary to meet the relevant legal and policy criteria.”
On the other hand, the expected rise in rates for USPS Inbound Letter Post small packets as a result of becoming a Competitive product could result in UPS and other carriers raising their rates for small parcels.
Feel free to weigh in on the issue on the EcommerceBytes Blog.