Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Oct 16 2016 21:10:02

Postal Regulatory Commission Listens to Small Sellers

By: Ina Steiner

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In July, we told readers you could weigh in on an issue that has many online sellers upset - Terminal Dues, which are the reason why sellers in Asian countries can deliver small packages to US shoppers more cheaply than US sellers can.

Some of you took heed and went to the Postal Regulatory Commission (PRC) website to voice your opinions, explaining how you wished for a more level playing field when it came to shipping costs. And be assured, your voice was heard.

When the PRC submitted its views about Terminal Dues to the State Department, which oversees negotiations on international postal rates with other UN members, PRC Commissioner Mark Acton also submitted his own, separate views.

He wrote in part:

"Participants who commented for the record in the Commission's latest development of views (Docket No. IM2016-1) - spanning from the largest and most sophisticated mailers and shippers in the world to the smallest US business owners - were unanimous in opposing the proposed UPU rates due to their noncompensatory and discriminatory nature."

Acton also wrote, "For me, the notion that today the American consumer can find on Amazon the same item delivered from overseas at a rate significantly less than from, say Dallas, speaks powerfully to this fundamental injustice."

We took a close look at the Commission's views in the October 11th EcommerceBytes 411 newsletter - it told the State Department it did not have sufficient information on whether the proposed Terminal Dues were consistent with US law. But Acting Chairperson Robert Taub, who also submitted separate views along with the PRC's views, said he was "compelled to find the terminal dues proposals inconsistent with the law."

And as we revealed, Acton went much further in his views, writing:

"If a more market-centric resolution cannot be brokered within the UPU, perhaps a coordinated member state initiative without the UPU offers a brighter, longer term prospect toward driving fuller cost coverage and reducing unfair trade distortions."

That may or may not be a good (or viable) idea. But at least small sellers can take satisfaction they made their voices heard, and someone was listening.




Comments (31) | Leave Comment | Permalink

Readers Comments

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: Carol This user has validated their user name.

Mon Oct 17 00:59:07 2016

Unfortunately, sellers who beat the drums to end what certainly looks to US sellers like unfair postal agreements with China fail to understand that USPS is under tremendous pressure to improve their fiscal ''performance''. Were they to lose part of their revenue from China to other carriers, it is naive to think they would be allowed to let their losses grow.  They would have no choice but to increase rates on other mail.

Just as EVERY international issue you can name, there are no simple answers.  This is an extremely complex subject involving huge amounts of money.  Restoring ''fairness'' to US sellers would very likely result in only a very temporary lowering of rates.

I'm a US seller and, of course, was incensed when I learned that China sellers could ship to the US cheaper than I could ship to distant US locations, but after reading past the headlines and first paragraphs of news stories on this subject, I accept that changing the existing system is unlikely to have a substantial effect on what I spend on shipping.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: puppy This user has validated their user name.

Mon Oct 17 01:26:53 2016

Carol, I know that the reason I spoke out against the current terminal dues system WAS NOT because I wanted lower postal rates. It was because our ecommerce market in the US is grossly distorted by the unfair shipping advantage given to China. Most sellers who have been activists on this issue are looking for an equal playground competing for sales in American ecommerce, moreso than just lower postal rates. If the Chinese penny junk sellers exit ecommerce once they can no longer turn a profit shipping very inexpensive junk for lower rates than us, that opens up sales for American ecommerce merchants. This issue IS complex, but the motivation for change goes way beyond wanting lower postal fees.

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by: Watching the Wheels This user has validated their user name.

Mon Oct 17 04:56:53 2016

The issue is a matter of PATRIATISM, and national policy, and LONG TERM common sense.

By subsidising the Chinese, we strengthen them, and weaken ourselves.

I don't care how complex the mess is. It needs to be fixed.

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This user has validated their user name. by: Rexford

Mon Oct 17 07:11:36 2016

Watching the wheels mentions patriotism.  While I get his/her point, it is really about global trade as we live in the age of a global economy.

It seems to me that there has to be a level playing field however.  When I mention a level playing field, or lack there of, does any one particular ecommerce site come to mind?  The way that the US Postal System is run, favoring the Chinese, sounds very much like that ecommerce site that we love to hate.

What is it that Ming says--"follow the money"?

And buy from USA sellers.  I guess the good news is that USPS does not throttle us like you know who does.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

This user has validated their user name. by: RKTOYS

Mon Oct 17 08:27:39 2016

Ending the subsidy to Chinese sellers can only improve their USPS's fiscal position.  Either the subsidy itself goes away and they stop losing $1+ per shipment or the Chinese go away and they stop losing $1+ per shipment.  Plus, if it puts a few more sales on US sellers' books, then we'll be able to pump that money back into our economy.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: Bidonmine This user has validated their user name.

Mon Oct 17 09:00:30 2016

The federal government should consider how much is being lost in taxes. A sale in China will not generate sales tax, income tax or business tax. The government loses on the taxes collected when the business owner spends their profit or when the business owner hires a new employee in order to expand due to the higher number of sales.

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by: ignatz This user has validated their user name.

Mon Oct 17 09:04:38 2016

I would just like someone to explain why the US taxpayer should subsidize Chinese sellers.

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by: justsaying This user has validated their user name.

Mon Oct 17 09:07:47 2016

Maybe instead of subsidizing China's postal rates, the USPS could in fact be "solvent" by not having to fund its postal workers retirement fund 10 years into the future....just a thought to ponder.

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by: DingDong This user has validated their user name.

Mon Oct 17 09:10:03 2016

It would be nice to have a even playing field.
We all know the Chinese sellers receive the big benefits, but we also have problems in the US.
Amazon, Wayfair and such. Let's say that we pay Priority Mail $6.00 and Amazon, Wayfair negotiated to pay $2.00. Is it fair that those companies have priority over there packages and our Priority package is set one level lower. USPS does everything to get that Amazon package to the destination for next to nothing and I am paying a greater price for the same service.
You have seen others grabbing Amazon boxes and shipping their items in them because USPS sees that package it has more priority. Now that is ridiculous.
Yes, when I pay online, I pay $5.75 with a discount. There needs to be an adjustment to the negotiated prices of the big companies, maybe $5. But I know they are paying so little.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: FREDDY This user has validated their user name.

Mon Oct 17 09:17:20 2016

Why is China the only country getting a huge discount??  What's wrong with Canada, UK, Australia just to mention a few ??????? Sounds like someone was bought off for that crazy deal.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: go-figure This user has validated their user name.

Mon Oct 17 09:45:05 2016

As both Rexford and Ming say, it is all about the money. The problem with following the money is that the motivations behind it all are frequently well hidden with pathways running through shell corporations, offshore banks and the like.

Companies like eBay and Amazon salivate over gaining access to the Chinese market. There are, after all, more than 1 billion Chinese consumers which dwarfs the size of the US market.

No matter how you slice it, it's still one sweetheart trade deal for the Chinese (like they need even more of a trade surplus with the US). Yes, eBay had a hand in all of this as well (it's no wonder they ''favor'' Chinese sellers). See this press release from way back in 2010 (note, who was heading the State Department at the time and who was in charge of eBay: the known enemies of US small business Obama, Hillary and the Ho):

http://about.usps.com/news/national-releases/2010/pr10_058.htm


It
is all about the money and the self-serving benefits being derived. The federal government, the current administration, the powers that be at major corporations like eBay and Amazon are all willing to throw you, me, small businesses and the US economy under the bus just so they can make more money, line their own pockets, etc.

Right now, you're looking at at least another 4 years of China being able to ship a package to your next door neighbor for less than you can!

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

This user has validated their user name. by: toolguy

Mon Oct 17 10:24:49 2016

Why would eBay favor a chinese seller?

The products sell for less so ebay earns less.

Shipping is less so ebay makes less on shipping.

It doesn't make cents (sic)

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: Whatever This user has validated their user name.

Mon Oct 17 10:28:15 2016

Some excellent points and nothing we don't already know. On funding the system 10 years - the PO was in deep trouble before that mandate took place.

"Companies like eBay and Amazon salivate over gaining access to the Chinese market" I'm sorry but I will forever ponder how a company in china sells a widget for $.01 - makes the danged thing - ships the danged thing and makes a profit. Could this sweetheart deal just be about the trillions of dollars we have borrowed from china? Grow up America - if you don't have the cash in your pocket to buy something - you save up - if we all worked on that we'd be a hell of a lot better off.

Just read the tax article. So we're going to make the Chinese pay sales tax??? of course

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by: GotToGetOut This user has validated their user name.

Mon Oct 17 10:36:57 2016

Carol, we are not helping the government by raising the international rates. It's my understanding that we're just increasing the USPS losses because, as an example, the latest international rate from China is 2X bigger but it is still a loss for every package sent from China. As I understand it, it goes something like this (not exactly sure of the specifics): the old rate was $.50 a package and USPS lost $3.50 on 1 million packages. Then they raised the rate to 2X more but China increased the deliveries by 4X so we are actually losing more than we were losing before! The deals they make are crazy and discriminatory against U.S. sellers (we're not asking for breaks). We can't ship internationally because the fees are so high and the Chinese should have the same problem of high shipping. Making it less to ship internationally from China than in the States is absolutely ridiculous.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: ySirTinLee This user has validated their user name.

Mon Oct 17 10:50:13 2016

"If the Chinese penny junk sellers exit ecommerce once they can no longer turn a profit shipping very inexpensive junk for lower rates than us, that opens up sales for American ecommerce merchants."  Look closely and you all will see the stupidity in this whole issue.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: Whatever This user has validated their user name.

Mon Oct 17 11:02:05 2016

oh I see the stupidity of the whole freeken mess. So ebay - what's 10% of a penny equal anyway?

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by: The Not So New Guy This user has validated their user name.

Mon Oct 17 11:21:32 2016

Just a quick blurb about "how they make money selling a 1 cent widget delivered", I used to wonder that myself, so I experimented and bought a few 1 cent widgets. A few weeks after my widgets got delivered I started getting emails about these sites with low prices, basically email marketing that I never opted into. As I used an email address I rarely use to buy my 1 cent widget it was pretty obvious where they were coming from. Many flat out said "Hope you liked the item you purchased check us out at www.whatever" So it seems to me that just like grocery stores run loss leaders in the hopes you'll buy other things so are the Chinese companies just using the 1 cent widget to data mine for buyers and chalking it up to an advertising expense and campaign.

As to worrying about the Postal Service becoming insolvent by raising last mile delivery fees or terminal dues, etc., it's a silly argument as part of the reason they are losing money is because they are offering this losing delivery fee to a country that arguably no longer needs it. It's like continuing to pay unemployment benefits to someone after they got a new job and are back on their feet. The program was/is an incentive to countries breaking into trade, they're in, time to raise the price.  

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by: PowerSeller2007 This user has validated their user name.

Mon Oct 17 12:09:07 2016

Rate need to be realistic of cost to operate. US sellers should not be SUBSIDIZING competitors for Overseas. If rate to ship parcel from China via USPS is 25 cents, USPS should not be charging US sellers $2.60.

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by: Barbbie This user has validated their user name.

Mon Oct 17 13:59:05 2016

So exactly what do we export to China? According to some articles out there it is soybeans by far which accounts for most of it, followed by semiconductors, aircraft parts and industrial equipment and materials like paper, plastic, copper, aluminum.
And in turn they sell us nearly everything we buy, much made from what we send them. It used to be that we bought it back through wholesalers and sold it thus US retailers making money, taxes and thus a better economy.
Assuming nearly everyone selling online is not selling soybeans or base materials to China it works out great that China can make anything and everything and cut out the middleman here.
I do not think, Carol, that you have a grasp of the situation at hand. Sellers are not just whining about their postage rates. They are losing their livelihood over this. I have not had more than 3 Chinese sales in over 15 years. Lowering the terminal dues did not increase my sales to china. Did it increase for other online US sellers? Ebay and amazon are still getting their fees regardless and of course, more sellers mean more automatic fee money for them, they do not have to make any special "deal" themselves to get this. There is nothing that I have that cannot be purchased cheaper in China. I sell lightweight items, if a buyer in China wanted one though, they would pay closer to 10.00 than 1.00 to get it and that is just first class. In order for me to get "access" to the billions of Chinese buyers, I would need to be able to complete with a seller on say, alibaba, which I still cannot do and have not heard of anyone in China requesting that the US seller be able to sell to China on the back of the Chinese people.
I do not believe that fixing the terminal dues issue regarding first class/ epacket mail caused by HC et al, is going to cause the soybean or base materials market to collapse. A brief search of ebay reveals most soybean product packages listed are also from Asian countries -as little as 2.99 free shipping. Also, the amount of money we export in anything does not compare with even the top product imported (computers) from China.
I used to purchase per month what I now barely purchase in a year in china imports. That meant profit and taxes, spent in the US, I suspect that the Chinese who now sell those items instead of me are not putting the money back into the local US economy or paying US taxes.
Now, here is the whining about the US postal rates, I resent my postage going up because this situation is causing massive losses for the post office and  their fix is to raise my rates instead of the rates for the package subsidies causing it. But, my rates can stay high as long as the other countries pay the same as I do, let the Chinese postal service subsidize it if they want to. Sure, they can still undercut us, but at least we won't have to subsidize them doing so.
I also thought that the program was to help emerging markets thus China, should not be included in that program anyway except that they also should be subsidizing through their own postal service for countries who do not have an international market presence, which I suspect they probably do not do.

Perminate Link for Postal Regulatory Commission Listens to Small Sellers   Postal Regulatory Commission Listens to Small Sellers

by: Joey4711 This user has validated their user name.

Mon Oct 17 16:42:16 2016

It is simple (don't hold your breath though) all they have to do is end the agreement that ebay, Amazon and others are making so much money off of with epacket pricing and make the pricing where it doesn't lose money (which experts put at about $8.78 instead of $5.00 a package0.  Make it $10.00 for a nice profit, I don't buy the point of view that the post service wouldn't be interested in getting rid of epackets they lose money on each on now.

The problem is ebay, amazon and all the other companies making millions if not billions off of cheap postage. Or make it simple tell the chinese system to subsidize our mail to their customers.

Yet, in reality this is what will likely transpire.  Ready, our rates will go up epacket go down, we subsidize the billionaires until one day just like in the American revolution someone will pick up arms and there will be lots of bloodshed unfortunately as history repeats itself.

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