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I don’t have the background on this - help me understand why or how it’s cheaper for goods to ship cheaper from China than shipping within the US? The US taxpay

I don’t have the background on this - help me understand why or how it’s cheaper for goods to ship cheaper from China than shipping within the US? The US taxpayer is subsidizing this? I’m shocked and confused.

adventured 7y ago
It's a UN-based forced rate subsidy for developing nations that China still benefits from. "According to the U.S. Postal Service, it costs around $20 to mail a small parcel weighing 4.4 pounds from one U.S. state to another, yet mailing the same package from China only costs about $5." "The Universal Postal Union, a United Nations agency that sets postal rates among its 192-member countries, dictates USPS's artificially low rates. It bizarrely groups China – the world’s second-largest economy – with developing nations like Gabon and Fiji into its third tier of shipping rates, which are just a fraction of what the developed world must pay." "USPS loses about $300 million per year on Chinese imports - losing about $1 per small package it delivers." https://www.realclearpolitics.com/articles/2019/04/04/trump_fights_to_fix_shipping_rates_that_favor_china_139960.html https://www.realclearpolitics.com/articles/2019/04/04/trump_...
- lonelappde 7y ago
  In what sense can the UN "force" anything? The article says that Trump is moving to pull out of or renegotiate the UPU agreement, which at worst is a Presidential choice, and it's not even clear to me why USPS can't do it unilaterally.
  - adventured 7y ago
    > In what sense can the UN "force" anything? Are we going to pretend the UN and UPU have zero power to dictate global shipping rates? Because that's exactly what they do.
    - mola 7y ago
      They have zero power. The US can destroy the UN in a flash. But in that instance, humanity would pay much more than extra bucks for shipping crap we don't need. A strong AND fair UN is a good deterrent for world wars. Of course, it's better to renegotiate any precieved unfairness than to just blow all violence avoidance safeguards like a world congress. China got away with their economic trickery because of US corporate greed and short sightedness combined with the US public insatiable consumerism. But we humans have a short memory and we like being empowered by bully leaders. Let's just hope we'll survive this age without too much bloodshed.
  - ccleve 7y ago
    The UN can "force" rules upon us if we sign an agreement allowing them to do so. If we sign a treaty agreeing to abide by the rules set by a UN agency, then they can impose such rules, and under the US Constitution, such rules have the force of law within the US. The rules might not be fair. Our recourse is to try to change the rules, and failing that, threaten to withdraw from the agreement. That's what we're doing.
- romaaeterna 7y ago
  Parent is correct, despite being grayed currently by downvoting. UPU is an international postal treaty organization that was subsumed into the UN. Every country used to have conclude treaties with every other country (read Anthony Trollope's autobiography for a fine account of his negotiation of one such treaty between the the US and Britain). China has gamed the system on this rule, so the US is forced to threaten withdrawal to fix it.
  - tim333 7y ago
    The rules were probably set when China was a poor country like Fiji. They seem to have overtaken only in 2009. In 1980 GDP (nominal) per capita of Fiji was 6x China, now China is about 60% ahead. They've come up fast. (data https://en.wikipedia.org/wiki/List_of_countries_by_past_and_projected_GDP_(nominal)_per_capita#IMF_estimates_between_2010_and_2019 https://en.wikipedia.org/wiki/List_of_countries_by_past_and_...)
jarfil 7y ago
It's cheaper to ship 10,000 items in a single container, than to ship each one separately, which is why mail carriers bundle items together (in bags, vans, containers, etc) instead of handling them separately all the way. Domestic mail is like sending separate items, which get bundled together, then un-bundled again to deliver them to their final destination. All these steps happen at domestic wages, and at best with medium volumes. If there are not enough items to fill a container, it's still getting sent some other (more expensive) way. Items from China get bundled by lower wage workers, the bundles are sent by lowest priority freight (usually a 7-45 day delay), bundles are only sent when fully filled in order to minimize costs per item, and sorted to minimize un-bundling costs. This won't change no matter what, it's just economy of scale. There are other factors like the reduced shipping costs for China set by the UN, or the fact that some will ship items at a loss just to convert Yuan to USD through Hong Kong, but ultimately the production vs. consumption imbalance is what decides most of this.
- lonelappde 7y ago
  This ignores the actual reason, which is that USPS charges less for China->US movement than domestic movement even after bundling like Amazon does at the warehouse.
  - SmartJerry 7y ago
    Exactly this. It has nothing to do with the boat cost or economies of scale because once it arrives it has to still go that last mile - or last hundred miles within the U.S. the same as any package.
- xster 7y ago
  <in my mind>There's still humans in postal sorting centers?</> https://www.youtube.com/watch?v=zjdpz05u2DY https://www.youtube.com/watch?v=zjdpz05u2DY omg...
  - fhood 7y ago
    Basically has to be right? Even if the shipping labels were completely standardized, you still have to deal with irregular package dimensions, composition, and label locations. The sort of stuff that robots aren't so good at.
shameshame 7y ago
Planet Money did a great breakdown on this. Essentially it comes down to international agreements on the cost of doing the past mile of shipping for other countries. 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...

adventured 7y ago

It's a UN-based forced rate subsidy for developing nations that China still benefits from. "According to the U.S. Postal Service, it costs around $20 to mail a small parcel weighing 4.4 pounds from one U.S. state to another, yet mailing the same package from China only costs about $5." "The Universal Postal Union, a United Nations agency that sets postal rates among its 192-member countries, dictates USPS's artificially low rates. It bizarrely groups China – the world’s second-largest economy – with developing nations like Gabon and Fiji into its third tier of shipping rates, which are just a fraction of what the developed world must pay." "USPS loses about $300 million per year on Chinese imports - losing about $1 per small package it delivers." https://www.realclearpolitics.com/articles/2019/04/04/trump_fights_to_fix_shipping_rates_that_favor_china_139960.html https://www.realclearpolitics.com/articles/2019/04/04/trump_...

lonelappde 7y ago
In what sense can the UN "force" anything? The article says that Trump is moving to pull out of or renegotiate the UPU agreement, which at worst is a Presidential choice, and it's not even clear to me why USPS can't do it unilaterally.
- adventured 7y ago
  > In what sense can the UN "force" anything? Are we going to pretend the UN and UPU have zero power to dictate global shipping rates? Because that's exactly what they do.
  - mola 7y ago
    They have zero power. The US can destroy the UN in a flash. But in that instance, humanity would pay much more than extra bucks for shipping crap we don't need. A strong AND fair UN is a good deterrent for world wars. Of course, it's better to renegotiate any precieved unfairness than to just blow all violence avoidance safeguards like a world congress. China got away with their economic trickery because of US corporate greed and short sightedness combined with the US public insatiable consumerism. But we humans have a short memory and we like being empowered by bully leaders. Let's just hope we'll survive this age without too much bloodshed.
- ccleve 7y ago
  The UN can "force" rules upon us if we sign an agreement allowing them to do so. If we sign a treaty agreeing to abide by the rules set by a UN agency, then they can impose such rules, and under the US Constitution, such rules have the force of law within the US. The rules might not be fair. Our recourse is to try to change the rules, and failing that, threaten to withdraw from the agreement. That's what we're doing.
romaaeterna 7y ago
Parent is correct, despite being grayed currently by downvoting. UPU is an international postal treaty organization that was subsumed into the UN. Every country used to have conclude treaties with every other country (read Anthony Trollope's autobiography for a fine account of his negotiation of one such treaty between the the US and Britain). China has gamed the system on this rule, so the US is forced to threaten withdrawal to fix it.
- tim333 7y ago
  The rules were probably set when China was a poor country like Fiji. They seem to have overtaken only in 2009. In 1980 GDP (nominal) per capita of Fiji was 6x China, now China is about 60% ahead. They've come up fast. (data https://en.wikipedia.org/wiki/List_of_countries_by_past_and_projected_GDP_(nominal)_per_capita#IMF_estimates_between_2010_and_2019 https://en.wikipedia.org/wiki/List_of_countries_by_past_and_...)

jarfil 7y ago

It's cheaper to ship 10,000 items in a single container, than to ship each one separately, which is why mail carriers bundle items together (in bags, vans, containers, etc) instead of handling them separately all the way. Domestic mail is like sending separate items, which get bundled together, then un-bundled again to deliver them to their final destination. All these steps happen at domestic wages, and at best with medium volumes. If there are not enough items to fill a container, it's still getting sent some other (more expensive) way. Items from China get bundled by lower wage workers, the bundles are sent by lowest priority freight (usually a 7-45 day delay), bundles are only sent when fully filled in order to minimize costs per item, and sorted to minimize un-bundling costs. This won't change no matter what, it's just economy of scale. There are other factors like the reduced shipping costs for China set by the UN, or the fact that some will ship items at a loss just to convert Yuan to USD through Hong Kong, but ultimately the production vs. consumption imbalance is what decides most of this.

lonelappde 7y ago
This ignores the actual reason, which is that USPS charges less for China->US movement than domestic movement even after bundling like Amazon does at the warehouse.
- SmartJerry 7y ago
  Exactly this. It has nothing to do with the boat cost or economies of scale because once it arrives it has to still go that last mile - or last hundred miles within the U.S. the same as any package.
xster 7y ago
<in my mind>There's still humans in postal sorting centers?</> https://www.youtube.com/watch?v=zjdpz05u2DY https://www.youtube.com/watch?v=zjdpz05u2DY omg...
- fhood 7y ago
  Basically has to be right? Even if the shipping labels were completely standardized, you still have to deal with irregular package dimensions, composition, and label locations. The sort of stuff that robots aren't so good at.

shameshame 7y ago

Planet Money did a great breakdown on this. Essentially it comes down to international agreements on the cost of doing the past mile of shipping for other countries. 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...