Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Wed Sept 27 2017 00:30:42

China Sellers Will Pay 13 Percent More Mailing to US

By: Ina Steiner

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Sellers in China will pay 13 percent more when mailing small packets to US shoppers beginning January 1st, according to a US government official.

The US State Department responded to a Congressman's concerns about the financial impact of UPU Terminal Dues that allow for companies in some countries to mail small packets to US shoppers for extremely low rates, giving them an advantage over domestic sellers.

Congressman Kenny Marchant had written a letter to Secretary Rex Tillerson in June stating he was "greatly concerned regarding the significant financial losses incurred by the USPS" as a result of the UPU conventions. He took a swipe at the former Administration, stating the US shouldn't be locked in to agreements that "undoubtedly are bad for US postal ratepayers and shippers."

Charles Faulkner of the Bureau of Legislative Affairs at the State Department responded in a letter in July. Readers may recall that the nearly 200 member countries of the UPU establish new terminal dues every four years, with the next rates taking effect in 2018. The purpose of the UPU Terminal Dues (TD) system is to compensate destination countries for the cost of handling, transporting and delivering letter-post items from abroad - so of course the US also pays other postal services for mail sent to those countries.

Faulkner explained that the 2012 convention had improved USPS compensation for inbound delivery of international mail compared to the former methodology, but did not result in the expected improvements in cost coverage because of the ecommerce-driven surge in the volume of small packets - especially from China and other rapidly industrializing economies. 

Faulkner said that the new 2016 convention accounts for the growing prominence of small packets in international letter cost, and he said it compensates postal operators at significantly higher rates for small packets than for small letters or flats.

Without mentioning China by name, he said countries that account for the highest volumes of small packets mailed to the US will see a 13% year-on-year increase in charges beginning January 1st. 

"The Department and USPS worked intensively over the course of four years to achieve this outcome" and believes the new convention will have a dramatic positive impact on USPS's compensation. "We note USPS's own assessment that the Convention will provide it with full cost coverage," he added.

Faulkner also noted that regardless of whether the United States is a party to a particular UPU Convention, "there is, as a practical matter, no viable alternative framework under which the U.S. could exchange mail with other UPU member countries."

The letter from Faulkner is the only document we've seen that pegged the impact of the 2016 UPU convention - experts said it was very difficult to quantify the impact of the changes. But even a 13% increase in costs is unlikely to make the inbound rates for small packets from countries like China on par with the costs of domestic US shippers.

(As we've noted previously, ePacket rates are different from but are influenced by UPU Terminal Dues since the latter give the USPS little leverage in negotiations; sellers generally refer to ePacket when discussing international postal cost inequities.)

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Readers Comments

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: RL15 This user has validated their user name.

Wed Sep 27 15:29:16 2017


I agree with parity

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Snapped This user has validated their user name.

Wed Sep 27 15:42:43 2017

@hopeforbest:

1C = First Class in context intended, not one cent.  (i.e., price of a stamp, per ounce).  Sorry for any unclarity.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Snapped This user has validated their user name.

Wed Sep 27 16:35:32 2017

Just wondering....

Why so many are 'blaming' the USPS for ePacket cost disparities?  It's the member countries of the UPU that set the cross-border rates - the increase as results from the 2016 convention is clearly written in the OP.  So is the fact the USPS has actually been fighting to achieve international cost parity, contrary to apparent 'perceptions' stated here, yet has little say in it in the end.  

Also missing seems to be consideration for (if facts matter), the USPS has the lowest domestic costs on Earth (up to a few lbs, depending on dimensional weight calculations - a factor they only recently adopted compared to their 'competition').  If they didn't, there would be no such thing as UPS Shure Post for example, where the USPS is paid by UPS to perform last mile delivery on most 'lighter' parcels, because UPS can't 'afford' to alone and remain consumer competitive.  In fact, they cost more than anyone else until the package hits above the 70lb limit FedEx won't even handle.   And compare your standard document type pack overnight cost from say FedEx vs USPS Express.  

Point is, there is not a cause and effect connection to USPS determined pricing here.  And it's the buyer who 'pays' in the end anyway. And eBay who will illicitly profit from it.  

Suggested redirection of 'outrage' is appropriate, accordingly.  

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Postalwizard This user has validated their user name.

Wed Sep 27 17:12:06 2017

Unfortunately as Ina said, this is not something the USPS can change.  This agreement was negotiated by the US State Dept under the Obama Administration.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: mcposty This user has validated their user name.

Wed Sep 27 17:48:36 2017

what is also dumb is that Ebay loves China for some reason, and will encourage China to sell fakes.

Why all this charity and turning the other way for China? They do nothing for us..somewhere, we have to realize, we will be destroyed as a nation if we do not buckle down and be more independant.

Even trump is a big whimp when it comes to China..i rather get into a world war with china than help them any more! Freedom or death!




Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: mcposty This user has validated their user name.

Wed Sep 27 17:51:28 2017

as to the usp not having a say..all they have to do is get their postal carriers to stop deliverying these packets in protest..problem solved. but the usps are whimps and will not defend their own country so i ball them right up with the politicians. talk is cheap. DO something about is post carriers!

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

This user has validated their user name. by: RKTOYS

Wed Sep 27 23:10:37 2017

Oh, sure, you want to postal carrier to go on strike to protect your interests, but let them for it for their own and they'll be labeled communists before the strike even starts.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Snapped This user has validated their user name.

Thu Sep 28 00:47:05 2017

''....but the usps are whimps and will not defend their own country...''

Do tell.  Does that include the 31.5% of USPS workers who are veterans - with almost 20% of those being service related disabled?  Because if it does, they'd probably have something to say about being so falsely categorized.  So would you, if you had served in harms way.

And delivering your (and everyone else's) precious trinkets and postcards to EVERY household in the country is a back-breaking, marginally compensated, and often hazardous job that doesn't stop at 'quittin' time' either.  Those 'closure' announcements during sever weather episodes where they direct 'essential personnel only' to report? USPS workers ARE some of those deemed 'essential'.  

Might be reasonable to consider that regarding any assessments of 'wimpyness' next time you are enjoying a second cuppa on your warm dry couch during a snow day.  Or days when you can literally fry eggs on your mailbox.  Or during the next virtual monsoon.  Anytime it's not literally life threatening or physically impossible due to catastropic infrastructure damage actually.  

Even so, USPS management can not dictate to labor any instructions that would result in violating labor's contract with them.  Deliberately delaying or refusing to deliver mail adequately addressed with postage paid according to currently contratually agreed rates, even those distasteful but no less compelled for it, unless such action is protected by union strike rules invoked during situations alleging contract violations as a basis to begin with, is a felony.  There is no such basis in this case.

As for the USPS management's ability to act 'unilaterally' despite such prohibitions, while true they are not federally funded, they are still accountable to congress and the executive, as federalized employees.  So if one believes the suggested boycot should occur despite all that, perhaps such can be suggested to such government oversignt representatives, so THEY can order such action accordingly.  

However, be aware that such won't likely influence or result in any action to achieve the desired parity.  More likely it will result in quid pro quo refusal by UPU member nations to deliver US posted parcels to international recipients, with predictably devastating consequence to US international eCom sales via eBay.

However, there IS a practically guaranteed way to render the issue moot.  Have the 'courage' to quit buying the junk eligible for ePacket rate based shipments in the first place.  From eBay or elsewhere.

It might even also influence eBay's search placements to render those offerings less visible based on their recent revelations on how it serves to promote items deemed 'more likely' to sell.  

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

This user has validated their user name. by: JusTrains

Thu Sep 28 00:51:17 2017

Yeah... so those Chinese ePacs are cheap to send. So what!

They are restricted to less weight than 1st class package rates AND take upwards of TWO months to make it, literally, on the slow boat from China! The sellers are always breaking down retail packages, or just crushing the packages, just to make them fit in the ePac. Products are nifty and as noted, sometimes unique, but they are still cheap. I've bought much with the understanding that I'm buying a one shot deal to get by until I actually HAVE to buy a quality (or better quality) thingamajig.

If you opt to pay for air shipping, then there's not much diff between them and us. Actually, I see it as at least on par with USPS Global Express - and who actually pays those kind of shipping prices??? I certainly won't!

I don't think this is such an issue as everyone makes it out to be.

China is like Japan in the 1950's. They made thing's dirt cheap and went on quanity. I have product manufactured in China and know that I only win with quantity but it still costs to produce the quality I get. So when I have China make something, it's all pre-ordered (pre-sold) before I even have molds made to produce the item. There is NO WAY I can do that on home turf without even being more expensive than I am already. Thankfully, my market is selective and demanding for the quality - to a point.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

This user has validated their user name. by: RKTOYS

Thu Sep 28 01:11:37 2017

"They are restricted to less weight than 1st class package rates AND take upwards of TWO months to make it, literally, on the slow boat from China!"

Recently Ina ran a story about the USPS not actually verifying the weight of packages with pre-printed labels.  The stuff I see listed as elligible for ePacket on eBay, that I know is upwards of a pound because I deal in those products too, says they weren't verifying those weights either.  Also, if you think 30 days is a deterrent to buyers, you have no idea what they'll put up with to save $7 on shipping.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Chicago48 This user has validated their user name.

Thu Sep 28 01:25:49 2017

Will this make the product you order arrive faster?  If you notice next to the shipping arrival date, it's usually a month away.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Volvo351 This user has validated their user name.

Thu Sep 28 08:23:40 2017

@Hope... OP didn't say something would be shipped for one cent. By "1C" he meant First Class, not $0.01!

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Barbbie This user has validated their user name.

Thu Sep 28 09:31:40 2017

@various
Most of the stuff from China doesn't go through customs (duty payment wise), because a 500.00 sale is required for customs collection in the US. I also sincerely doubt that the vast majority of the small packages are ever actually inspected by anyone for the sheer volume and manpower that would entail. I think at the most it may get a dog to sniff it.
They need to make epacket at least 2.61 to make it fair for us since that is the least we can ship for with tracking.
You can go out to any chinese site and see the items they will ship with epacket and a lot of them are over a pound.
The venues do require tracking for the most part but for many sites you are forgiven if you just refund or your item is cheap enough so you don't need to use it. Unfortunately, it seems that most venues allow the international seller to get away with a lot more than the average US seller can.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

This user has validated their user name. by: toolguy

Thu Sep 28 09:40:47 2017

@JusTrains

ePackets can weigh up to 2 kg, 3 kg if going to Israel.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

This user has validated their user name. by: epuise

Thu Sep 28 10:41:46 2017

Until every " 99 cent Free Shipping from China" eBay Buyer gets burnt... the disparity in eCommerce will continue.

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: Whatever This user has validated their user name.

Thu Sep 28 10:44:15 2017

Ok everyone - can you send the link to this article to fricken Rex Tillerson?

Perminate Link for China Sellers Will Pay 13 Percent More Mailing to US   China Sellers Will Pay 13 Percent More Mailing to US

by: mcposty This user has validated their user name.

Fri Sep 29 10:44:39 2017

All postal carriers care about is a check. It's nice they are veterans but they fold when they have a real chance to defend Americans instead of politicians and bankers

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