Bye bye discounted postal rates from China to USA

[merckxman]

President Trump plans to withdraw from a 144-year-old postal treaty that has allowed Chinese companies to ship small packages to the United States at a steeply discounted rate:
https://nyti.ms/2Af96SY

[Mikej]

So, did China give the US a discount in return?

[Big Dan]

Consumers will pay the hike.

[verticaldoug]

https://www.npr.org/templates/transc...ryId=634732388

NPR Planet Money had segment on the Universal Postal Union and how it works. It isn't a special discount to the chinese it is just chinese postal rates are cheaper in China and then benefit from the final mile in the US.

This was released on August 1, 2018

[Mikej]

[QUOTE=Big Dan;2442366]Consumers will pay the hike.[/QUOTE
It’s always more complicated than the article states-

[joosttx]

Originally Posted by Big Dan

Consumers will pay the hike.

There is that tricle down thing

[bicycletricycle]

It was a stupid idea in the first place. The taxpayer does not need to be subsidizing Chinese, or any other countries, shipping

[Mark McM]

Originally Posted by Mikej

So, did China give the US a discount in return?

In a word, yes. All members of the Universal Postal Union have common agreed upon uniform flat rate for mail and small parcels. If you mailed a small parcel to a friend in Germany or Ghana or Ecuador from the US, you'd also get the same uniform rate as small parcels mailed from China. Often, accepting and delivering mail from other countries results in a small loss for the destination country's postal system, but it was considered a small price to pay for fostering international trade and communication. But more recently, with the rise of internet sales, the large volume of these parcels from Asia to the US has resulted in a major imbalance in costs. In affect, the US Postal Service is subsidizing the cost of shipping small items to the US from China. If the US produced small items that consumers in China were interested in buying directly from the US vendors, then there would potentially be a balance, but this is not currently the case.


And I disagree that it was a bad idea in the first place. When the Universal Postal Union was set up in 1874 (it was originally proposed by the US in 1863), it was a very good idea to foster international communication. Unfortunately, it's policies and agreements have not kept up with the times. Rather than from withdrawing from the agreement, the US should push for a change in terms.

[bicycletricycle]

"In recent years UPU members have encountered serious problems triggered by the enormous increase in e-commerce originating from the Far East, where the terminal dues do not cover the unit costs of delivery in the destination countries, and the volumes are so big that the losses cannot be compensated by better terminal dues from other traffic. In 2016 a new remuneration system was implemented with a focus on e-commerce,[13]

Though the 2016 balanced the costs to the delivery services, postage costs for shippers is still asymmetric. As of 2018, US companies pay more than twice as much to mail an item from a US plant to a US customer, than does a manufacturer in China to mail an item to a US customer."

this is from WIKI, originally from WSJ. It is cheaper for a Chinese factory to ship to a US address than a US factory. I don't think that sounds reasonable.

Originally Posted by Mark McM

In a word, yes. All members of the Universal Postal Union have common agreed upon uniform flat rate for mail and small parcels. If you mailed a small parcel to a friend in Germany or Ghana or Ecuador from the US, you'd also get the same uniform rate as small parcels mailed from China. Often, accepting and delivering mail from other countries results in a small loss for the destination country's postal system, but it was considered a small price to pay for fostering international trade and communication. But more recently, with the rise of internet sales, the large volume of these parcels from Asia to the US has resulted in a major imbalance in costs. In affect, the US Postal Service is subsidizing the cost of shipping small items to the US from China. If the US produced small items that consumers in China were interested in buying directly from the US vendors, then there would potentially be a balance, but this is not currently the case.

[Mark McM]

Originally Posted by bicycletricycle

Though the 2016 balanced the costs to the delivery services, postage costs for shippers is still asymmetric. As of 2018, US companies pay more than twice as much to mail an item from a US plant to a US customer, than does a manufacturer in China to mail an item to a US customer."

This is because China is still (erroneously) classified as a developing nation. In the UPU treaty, developing nations are given special discounts. When China first joined UPU decades ago, they were a developing nation - but now that they have achieved more economic wealth and power, they should be reclassified.

[bicycletricycle]

Yes, but why categorize at all? why not just charge market price for the service provided?

Originally Posted by Mark McM

This is because China is still (erroneously) classified as a developing nation. In the UPU treaty, developing nations are given special discounts. When China first joined UPU decades ago, they were a developing nation - but now that they have achieved more economic wealth and power, they should be reclassified.

[Mark McM]

Originally Posted by bicycletricycle

Yes, but why categorize at all? why not just charge market price for the service provided?

UPU is now a part of the United Nations, and the UN frequently has policies favoring developing nations.

When you say "market price", do you mean the actual cost of services in each nation, or do you mean a uniform cost for all nations? To me, it makes the most sense to have uniform cost - otherwise, you'd have a different set prices for each nation you wanted to send mail to (and that's hundreds of different nations), and the costs would vary day to day depending on exchange rates. that would be too cumbersome. Granted, there may be a better way to set the uniform costs, but I believe a uniform system is still best to promote international communication.

[bicycletricycle]

Originally Posted by Mark McM

UPU is now a part of the United Nations, and the UN frequently has policies favoring developing nations.

When you say "market price", do you mean the actual cost of services in each nation, or do you mean a uniform cost for all nations? To me, it makes the most sense to have uniform cost - otherwise, you'd have a different set prices for each nation you wanted to send mail to (and that's hundreds of different nations), and the costs would vary day to day depending on exchange rates. that would be too cumbersome. Granted, there may be a better way to set the uniform costs, but I believe a uniform system is still best to promote international communication.

I mean the cost should be what the interested parties agree to. An international price fixing scheme seems a bit a bit overkill. I am sure the individual parties can come to an agreement on their own.

[MikeD]

Good riddance. I'm wary of anything shipped from China, especially when purchased on eBay. It's likely to be counterfeit.

[ColonelJLloyd]

Originally Posted by bicycletricycle

I mean the cost should be what the interested parties agree to. An international price fixing scheme seems a bit a bit overkill. I am sure the individual parties can come to an agreement on their own.

Inefficiencies be damned?