7 ms·

But the issue here is not the differential in efficiencies. It's China receiving subsidies from the US because it was considered a developing country in 1969.

by raquo 8y ago

But the issue here is not the differential in efficiencies. It's China receiving subsidies from the US because it was considered a developing country in 1969. It's not anymore, it's a global superpower now, it can pay its own postage.

baldfat 8y ago
No it has no bearing on China. It is the same policy with Switzerland. You get the international package to America we pay for the final delivery. Pay for a package to Switzerland and Switzerland pays for the final delivery. It was suppose to be a wash for both parties. China just got a much better deal. Cost me more to mail a package the next state away then for me to get a package delivered from China. Now you have to pay for Switzerland delivery and then the domestic cost. Wish and EBay from China is now bye bye.
- nkurz 8y ago
  EBay from China is now bye bye. Why would this change the be end of direct shipping from China? Currently (rounded off numbers) the cost of shipping a 2 lb (1 kg) package within the US is about $7, and the cost of shipping such a package from China to a US address is about $2. The obvious solution would be that the Chinese shipment ends up costing $9 (current Chinese rate of $2 to the US border, plus $7 standard US shipping). The Chinese shipping would thus end up $2 more than the US. Presumably there would be lots of cases where the $2 greater shipping is offset by lower price of the item?
  - baldfat 8y ago
    I can order 8 recycling batteries for $2.99 and have them shipped to my house. That is a loss of $4. They are looking at an increase of $7 at least. BTW when I ship a small box 2 pound of cookies to my son from his mom it cost me around $10.
    - nkurz 8y ago
      Sure, certain things will no longer be feasible. My doubt was that these less-than-the-cost-of-shipping items were the bulk of the current direct-from-China Ebay orders, and even if they were, I was doubting that there was not a market for slightly more expensive items. For the US cost, a "Priority Mail Small Flat Rate Box" is $7.20 between any two US addresses, and a "Priority Mail Flat Rate Envelope" is $6.70. If you don't use one of these, the postage will likely will be slightly more.
  - kbenson 8y ago
    Where are you getting those numbers from? My understanding is that there's a nominal fee for last-mile delivery the USPS charges mail from other countries, which is all (or the vast majority) that's being charged for Chinese shipments, as the Chinese side is subsidized completely (or almost so) for outgoing mail. I think the $2 you are quoting might be the treaty fee for delivering mail from other countries, which is not the true cost of delivery, but mostly works out as long as there's a fairly even flow of mail between two countries. What we have here is that China is subsidizing their side of the outgoing mail, so all that's being paid is the treaty set delivery fee for external mail (which again, isn't the true cost of last-mile delivery).
    - michaelt 8y ago
      the treaty fee [...] is not the true cost of delivery, but mostly works out as long as there's a fairly even flow of mail between two countries. Isn't the core problem here that there _isn't_ an even flow of mail between China and the US? Because there's far more ebay/aliexpress traffic coming out of China than going in.
      - kbenson 8y ago
        I think it's not just that, which would be problematic on it's own, it's that China is also subsidizing local delivery, so the only (or almost only) delivery fee for Chinese shippers is the portion they pay to USPS for local delivery, which is artificially very low. So not only are they taking advantage of the difference in trade flows, they are also encouraging it even more. I think this was covered in an Planet money podcast from NPR.[1] It's also possible I'm not remembering portions of it correctly, but I think they did an interesting treatment of the subject. 1: https://www.npr.org/sections/money/2018/08/01/634737852/episode-857-the-postal-illuminati https://www.npr.org/sections/money/2018/08/01/634737852/epis...
    - nkurz 8y ago
      Where are you getting those numbers from? The US rates are for small flat rate packages and envelopes on USPS.com. I didn't find an exact source for the China-to-US rate, so the $2 was the low end of a small number of articles about shipping rather than an exact quote. I may have misinterpreted, or converted using outdated exchange rates, or missed details about minimum quantities. As you say, there is subsidization involved, but I think this is about right for the amount charged to the shipper.
- netsharc 8y ago
  Actually Swiss Post has the same problem as the USPS: buying something from a Swiss online shop is usually expensive because of high Swiss wages, but you can buy stuff for "dirt cheap" from China, and the delivery isn't paid for by the customer but by Swiss Post. Things like S-ATA cables cost maybe at least 7 Francs in Switzerland, but 0.40 CHF from China, with free shipping!
datavirtue 8y ago
Also of note, American tax payers were dropping $300MM a year to help Chinese small business.
- toomuchtodo 8y ago
  While it's unlikely that money saved would be directed to more useful endeavors internally, as a US citizen I'd prefer that money not subsidize Chinese commerce (or rather, subsidize US consumers purchasing directly from China).
baybal2 8y ago
No, every few years, there is a reevaluation. Last one was in 2016.
- specialist 8y ago
  Huh. Very interesting. I have a notion that all decisions should auto expire and be explicitly renewed. Because it's so hard to cull outdated or revisit / repair suboptimal rules. Inspired by stuff like IP/TCP leases and cache TTL. But your example of the powers that be waving thru a bad rule refresh suggests my notion won't be sufficient. Thoughts?
  - baybal2 8y ago
    Well, the process did exactly what it was required to do, to classify countries by income levels. China is not that rich, not even passing as a newly industrialised country. Were it to pass as such, say, Kenya and many other African countries would've too.
morpheuskafka 8y ago
This. I've got nothing against US aid to less privileged nations, I'm all for it. I can't stand a US adversary who is running re-education concentration camps for Uighurs and implanting remote access devices into US corporate infrastructure getting an unjust benefit form one cent of American tax money that operates the post office.
- niij 8y ago
  The US post office is 100% self funded. They get exactly $0 from taxes.
  - morpheuskafka 8y ago
    Not so fast. You're right that the general operations of the USPS are no longer directly appropriated by Congress. However, the US government and its citizens do give the USPS significant economic benefits, including a 100% tax exemption from state and local taxes, and the ability to "pay" federal taxes back to itself[1]. USPS need not comply with local zoning, parking, toll road, etc. laws. According to a 2015 report[2] cited by Fortune, that included $2.1B in waived taxes, the benefit of a federal monopoly on deliveries worth $14.9B, and as much as $490M/yr in subsidized lower interest rates due to not having to have a credit rating and borrow on the open market, but instead getting preferential treatment from the Treasury. Not included in the report is the fact that USPS OIG and USPIS are federally funded through appropriations[3]--whereas UPS or FedEx would have to hire their own off duty police offers at significant expense to receive the same level of protection. [1] https://www.uspsoig.gov/blog/taxing-postal-service https://www.uspsoig.gov/blog/taxing-postal-service [2] http://www.sonecon.com/docs/studies/Study_of_USPS_Subsidies-Shapiro-Sonecon-March_25_2015.pdf http://www.sonecon.com/docs/studies/Study_of_USPS_Subsidies-... [3] https://www.uspsoig.gov/sites/default/files/document-library-files/2018/FY%202019%20Congressional%20Budget%20%20Justification%20-%20FINAL.pdf https://www.uspsoig.gov/sites/default/files/document-library...
    - niij 8y ago
      That's interesting, thanks for the detailed reply.My point was that their operating expenses are covered by fees for postage and not directly paid through taxes. But now I realize that this is more of a grey area than I had though.

by raquo 8y ago

baldfat 8y ago

No it has no bearing on China. It is the same policy with Switzerland. You get the international package to America we pay for the final delivery. Pay for a package to Switzerland and Switzerland pays for the final delivery. It was suppose to be a wash for both parties. China just got a much better deal. Cost me more to mail a package the next state away then for me to get a package delivered from China. Now you have to pay for Switzerland delivery and then the domestic cost. Wish and EBay from China is now bye bye.

nkurz 8y ago
EBay from China is now bye bye. Why would this change the be end of direct shipping from China? Currently (rounded off numbers) the cost of shipping a 2 lb (1 kg) package within the US is about $7, and the cost of shipping such a package from China to a US address is about $2. The obvious solution would be that the Chinese shipment ends up costing $9 (current Chinese rate of $2 to the US border, plus $7 standard US shipping). The Chinese shipping would thus end up $2 more than the US. Presumably there would be lots of cases where the $2 greater shipping is offset by lower price of the item?
- baldfat 8y ago
  I can order 8 recycling batteries for $2.99 and have them shipped to my house. That is a loss of $4. They are looking at an increase of $7 at least. BTW when I ship a small box 2 pound of cookies to my son from his mom it cost me around $10.
  - nkurz 8y ago
    Sure, certain things will no longer be feasible. My doubt was that these less-than-the-cost-of-shipping items were the bulk of the current direct-from-China Ebay orders, and even if they were, I was doubting that there was not a market for slightly more expensive items. For the US cost, a "Priority Mail Small Flat Rate Box" is $7.20 between any two US addresses, and a "Priority Mail Flat Rate Envelope" is $6.70. If you don't use one of these, the postage will likely will be slightly more.
- kbenson 8y ago
  Where are you getting those numbers from? My understanding is that there's a nominal fee for last-mile delivery the USPS charges mail from other countries, which is all (or the vast majority) that's being charged for Chinese shipments, as the Chinese side is subsidized completely (or almost so) for outgoing mail. I think the $2 you are quoting might be the treaty fee for delivering mail from other countries, which is not the true cost of delivery, but mostly works out as long as there's a fairly even flow of mail between two countries. What we have here is that China is subsidizing their side of the outgoing mail, so all that's being paid is the treaty set delivery fee for external mail (which again, isn't the true cost of last-mile delivery).
  - michaelt 8y ago
    the treaty fee [...] is not the true cost of delivery, but mostly works out as long as there's a fairly even flow of mail between two countries. Isn't the core problem here that there _isn't_ an even flow of mail between China and the US? Because there's far more ebay/aliexpress traffic coming out of China than going in.
    - kbenson 8y ago
      I think it's not just that, which would be problematic on it's own, it's that China is also subsidizing local delivery, so the only (or almost only) delivery fee for Chinese shippers is the portion they pay to USPS for local delivery, which is artificially very low. So not only are they taking advantage of the difference in trade flows, they are also encouraging it even more. I think this was covered in an Planet money podcast from NPR.[1] It's also possible I'm not remembering portions of it correctly, but I think they did an interesting treatment of the subject. 1: https://www.npr.org/sections/money/2018/08/01/634737852/episode-857-the-postal-illuminati https://www.npr.org/sections/money/2018/08/01/634737852/epis...
  - nkurz 8y ago
    Where are you getting those numbers from? The US rates are for small flat rate packages and envelopes on USPS.com. I didn't find an exact source for the China-to-US rate, so the $2 was the low end of a small number of articles about shipping rather than an exact quote. I may have misinterpreted, or converted using outdated exchange rates, or missed details about minimum quantities. As you say, there is subsidization involved, but I think this is about right for the amount charged to the shipper.
netsharc 8y ago
Actually Swiss Post has the same problem as the USPS: buying something from a Swiss online shop is usually expensive because of high Swiss wages, but you can buy stuff for "dirt cheap" from China, and the delivery isn't paid for by the customer but by Swiss Post. Things like S-ATA cables cost maybe at least 7 Francs in Switzerland, but 0.40 CHF from China, with free shipping!

datavirtue 8y ago

Also of note, American tax payers were dropping $300MM a year to help Chinese small business.

toomuchtodo 8y ago
While it's unlikely that money saved would be directed to more useful endeavors internally, as a US citizen I'd prefer that money not subsidize Chinese commerce (or rather, subsidize US consumers purchasing directly from China).

baybal2 8y ago

No, every few years, there is a reevaluation. Last one was in 2016.

specialist 8y ago
Huh. Very interesting. I have a notion that all decisions should auto expire and be explicitly renewed. Because it's so hard to cull outdated or revisit / repair suboptimal rules. Inspired by stuff like IP/TCP leases and cache TTL. But your example of the powers that be waving thru a bad rule refresh suggests my notion won't be sufficient. Thoughts?
- baybal2 8y ago
  Well, the process did exactly what it was required to do, to classify countries by income levels. China is not that rich, not even passing as a newly industrialised country. Were it to pass as such, say, Kenya and many other African countries would've too.

morpheuskafka 8y ago

This. I've got nothing against US aid to less privileged nations, I'm all for it. I can't stand a US adversary who is running re-education concentration camps for Uighurs and implanting remote access devices into US corporate infrastructure getting an unjust benefit form one cent of American tax money that operates the post office.

niij 8y ago
The US post office is 100% self funded. They get exactly $0 from taxes.
- morpheuskafka 8y ago
  Not so fast. You're right that the general operations of the USPS are no longer directly appropriated by Congress. However, the US government and its citizens do give the USPS significant economic benefits, including a 100% tax exemption from state and local taxes, and the ability to "pay" federal taxes back to itself[1]. USPS need not comply with local zoning, parking, toll road, etc. laws. According to a 2015 report[2] cited by Fortune, that included $2.1B in waived taxes, the benefit of a federal monopoly on deliveries worth $14.9B, and as much as $490M/yr in subsidized lower interest rates due to not having to have a credit rating and borrow on the open market, but instead getting preferential treatment from the Treasury. Not included in the report is the fact that USPS OIG and USPIS are federally funded through appropriations[3]--whereas UPS or FedEx would have to hire their own off duty police offers at significant expense to receive the same level of protection. [1] https://www.uspsoig.gov/blog/taxing-postal-service https://www.uspsoig.gov/blog/taxing-postal-service [2] http://www.sonecon.com/docs/studies/Study_of_USPS_Subsidies-Shapiro-Sonecon-March_25_2015.pdf http://www.sonecon.com/docs/studies/Study_of_USPS_Subsidies-... [3] https://www.uspsoig.gov/sites/default/files/document-library-files/2018/FY%202019%20Congressional%20Budget%20%20Justification%20-%20FINAL.pdf https://www.uspsoig.gov/sites/default/files/document-library...
  - niij 8y ago
    That's interesting, thanks for the detailed reply.My point was that their operating expenses are covered by fees for postage and not directly paid through taxes. But now I realize that this is more of a grey area than I had though.