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Nice to see this getting addressed. There's a great Planet Money episode explaining the brokenness of the existing system (https://www.npr.org/sections/money/2

Nice to see this getting addressed. There's a great Planet Money episode explaining the brokenness of the existing system (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...). NPR ends up substantiating the claim of an entrepreneur who says that it costs him more to send a package across the street than it costs someone in China to send a package to that same address.

ikeboy 7y ago
No they don't. They repeat a false claim uncritically. If you look up the cheapest US shipping rates you'll find they're roughly the same range, and that almost all the comparisons purporting to show otherwise are cheating, typically by using retail pricing on a more expensive shipping option. >So he turns to his shipping guy. And he asks, how much would it cost for us just to ship this mug, like, not across the ocean, just across the street? >SMALDONE: He told me it's going to cost us about $6.30 to ship this item. Amazon page for mighty mug says it's 12.6 oz shipping weight. https://www.amazon.com/Might-Mug-1525-Mighty-Black/dp/B00FZDJHGK https://www.amazon.com/Might-Mug-1525-Mighty-Black/dp/B00FZD... Round up to 13 oz, then look up rates for the cheapest shipping option for packages under a pound "parcel select lightweight". See https://pe.usps.com/text/dmm300/Notice123.htm#_c139 https://pe.usps.com/text/dmm300/Notice123.htm#_c139 The cheapest rate is $2.02 for 13 oz. This rate applies when mail is injected at the closest mailing point (DDU), which "mailing across the street" corresponds to.
- gamblor956 7y ago
  No, the claim is true. Under the UPU, the USPS is required to charge Chinese shippers a "terminal fee" for packages shipped from China. However, due to China being classified as a "transitional country" it had extremely low terminal fee rates. Combined with China subsidizing shipping for export-based businesses, it was generally cheaper for a business in Shenzen to ship small/light products by post than for an American business to ship an equivalent product by USPS across the street. The deal secured by the US allows the USPS to begin charging new terminal fee rates beginning next summer. Presumably the new rates will change the economics of this situation, but in the meantime Chinese shippers still have at least a year to continue these subsidized shenanigans.
  - ikeboy 7y ago
    I literally linked the price sheet showing that it's wrong, did you not read my comment? >Combined with China subsidizing shipping for export-based businesses, it was generally cheaper for a business in Shenzen to ship small/light products by post than for an American business to ship an equivalent product by USPS across the street. Please back this up with examples.
    - gamblor956 7y ago
      There were more than a dozen other comments with examples when I posted my original comment, and each of those examples has supporting comments. Additionally, there is the NPR report cited in the parent confirming the disparity in shipping costs (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...). Unless you're saying the NPR got it wrong? You linked to a price sheet for US shippers. Chinese shippers don't pay those rates. They pay Chinese shipping rates (which I can't provide an authoritative example of because they're negotiated on a vendor basis), and the terminal fee. In many cases, China Post covers the terminal fee and/or all shipping costs for strategic regions, such as for vendors located in Special Economic Zones. The important thing though is that the terminal fee for Chinese shippers is lower than the lowest postal fee for US shippers.
      - ikeboy 7y ago
        My comment was calling out the NPR for repeating an incorrect claim, yes. Yes, Chinese shippers pay different rates. NPR claimed to ship a mighty mug across the street for a US shipper would cost $6.30, when the actual cost would be about a third of that.
  - pravda 7y ago
    > meantime Chinese shippers still have at least a year to continue these subsidized shenanigans. Um...the beneficiary of these "subsidized shenanigans" is the American people! Bad for the middleman, bad for the parasites, bad for the FBA goofballs, but good for the American people.
- mips_avatar 7y ago
  Ok so you're right, you could drive to your local postal office and if you are commercially shipping stuff you can do destination delivery unit (DDU) and get a 13 oz mug to your next door neighbor for $2.02. So let's assume the fair cost of last mile delivery for a 13 oz mug is $2.02. The Chinese knockoff mug cost on ebay $5.69 including shipping from China. So if the Chinese seller was paying fair last-mile delivery (which they weren't), they would be manufacturing and shipping a 13 oz mug to a local postal office in America for $3.67.
  - Consultant32452 7y ago
    A 13oz coffee mug retails at the dollar tree for $1.
  - shanecleveland 7y ago
    Except that rate wouldn't be available at your local post office. The $2.02 rate referenced is only available to an eligible business meeting many requirements to achieve that rate: https://ribbs.usps.gov/shipproductsservices/documents/tech_guides/PSLWUser.pdf https://ribbs.usps.gov/shipproductsservices/documents/tech_g... If NPR was looking to ask the "average" business what it would take to fulfill a single order, they likely got a good answer. And the shipper may have been overestimating final shipping weight if done on the fly.
  - ska 7y ago
    FWIW you could ship a 40ft container of mugs (something like 20,000 of them individually packaged) from china to Seattle, say for a rough cost of about 10c per mug. Bulk freight of nonperishable things is cheap.
    - Gibbon1 7y ago
      I've thought recently that the low cost of container shipping blows the economic theory of comparative advantage out of the water. At least the common and naive one that's based on national/political boarders. Ask why Australia ships iron ore and coal to China to be made into steel.
    - 7y ago
- mlyle 7y ago
  OK, so when we take the most hyperbolic example-- mailing from China only costs slightly less than a special rate for DDU/presort to a nearby post office, when you use a special service with volume and account and marking requirements. It's still an absurd result.
  - ikeboy 7y ago
    China post is mailing hundreds of millions of packets. Comparing their rates without taking volume and presort discounts into account is going to be misleading.
    - mlyle 7y ago
      The claim was that someone (and, actually, this includes low volume mailers) could mail something from China for a total cost less than his cost to mail it across the street. The claim seems to be true. Yes, he seems to have overstated his shipping cost and could have done better. Yes, with the combination of all 3 of A) volume pricing, B) presorting, and C) taking it to the specific delivery unit, you can get pretty close to the cost to mail a parcel from China. To somehow take these facts and get to "lolol it's a false claim" is absurd.
      - ikeboy 7y ago
        The mail is aggregated at the country level, sorted, etc. To call it low volume is like suggesting someone using Amazon's FBA to ship a package to their customer is a low-volume shipper, rather than reflecting Amazon's huge scale of logistics. >The claim was that someone (and, actually, this includes low volume mailers) could mail something from China for a total cost less than his cost to mail it across the street. Actually, the claim made there was that someone could sell something including shipping from China for less than the shipping cost across the street. This claim is laughably absurd, and the comment I was replying to said that NPR had substantiated that, which is also absurd. If they'd fact checked that podcast the $6.30 figure would have never made it in.
        7y ago
- joe_the_user 7y ago
  Your claim here is basically incorrect. "Parcel select" is a service for large mailers who deliver packages, in bulk, to multiple post facilities in the US, near to the destination of the package and have the USPS do the "last mile delivery". Does China Post have a fleet of trucks, in the US which moves Chinese packages to a closer US postal delivery facility. I believe not. Moreover, if China did have such a service, someone, China or the US is subsidizing it since individual shippers in China, not doing any aggregating themselves get a rate equivalent to large shippers in the US who aggregate and must pay the costs of this themselves. "“Parcel Select” is the registered trademark name for the Postal Service’s economical ground delivery service for packages entered in bulk, including those entered at destination facilities. It is designed for and generally used by large- and medium-sized parcel shippers. Parcel Select mailers pay postage that reflects the degree of work-sharing they do in presorting their parcels and/or drop shipping their pieces at a destination facility located closer to the delivery point. Mailers are responsible for transporting their Parcel Select pieces to a destination bulk mail center (DBMC), destination sectional center facility (DSCF), or a destination delivery unit (DDU) for business and residential delivery." https://about.usps.com/postal-bulletin/2007/html/pb22219/kit2_002.html https://about.usps.com/postal-bulletin/2007/html/pb22219/kit...
  - ikeboy 7y ago
    I'm not claiming that China is using Parcel Select. I'm responding to the claim about local shipping in the NPR piece. They explicitly claim that the prices quoted are just for last mile delivery.
    - joe_the_user 7y ago
      You are claiming that China is charging a price equivalent to US delivery but it isn't. It's charging a price equivalent part of US delivery which clearly a false comparison. The cost for an individual shipper in the US versus the cost for an individual shipper in China is clearly the correct point of comparison and it seems NPR was in making that comparison. Edit: removed comment about other thread.
      - 7y ago
- fyfy18 7y ago
  I remember a few years ago I went to Malaysia. It was cheaper to send a postcard from there to the UK, than within the UK itself.
baybal2 7y ago
China keeps paying its terminal dues to US, so that 50 cent postage does not comes that cheap to the China Post.
The_suffocated 7y ago
Thanks for the link. The price difference is huge. Around 16:20 in the programme -- if one ships a 3/4-pound package across the US, the USPS has to charge the shipper $4.76 for the "last mile", but if the same package is imported from China, the USPS can only charge China Post for $1.39 according to the UPU reimbursement rates.
- ikeboy 7y ago
  https://pe.usps.com/text/dmm300/Notice123.htm#_c139 https://pe.usps.com/text/dmm300/Notice123.htm#_c139 This shows the rate for 12 oz under Parcel Select—Lightweight. Depending how closely you're injecting the product (how many miles the "last mile" is), rates range from $1.83 to $4.34. Not seeing $4.76 anywhere.
  - ehvatum 7y ago
    The absolute lowest theoretical price for having the USPS deliver a presorted parcel that my logistic network injects into the USPS delivery network as close as possible to the recipient is still more than the terminal fee China would pay USPS to take that parcel from port to recipient doorstep. I think that's what the NPR report was getting at, with their colorful tales.

ikeboy 7y ago

No they don't. They repeat a false claim uncritically. If you look up the cheapest US shipping rates you'll find they're roughly the same range, and that almost all the comparisons purporting to show otherwise are cheating, typically by using retail pricing on a more expensive shipping option. >So he turns to his shipping guy. And he asks, how much would it cost for us just to ship this mug, like, not across the ocean, just across the street? >SMALDONE: He told me it's going to cost us about $6.30 to ship this item. Amazon page for mighty mug says it's 12.6 oz shipping weight. https://www.amazon.com/Might-Mug-1525-Mighty-Black/dp/B00FZDJHGK https://www.amazon.com/Might-Mug-1525-Mighty-Black/dp/B00FZD... Round up to 13 oz, then look up rates for the cheapest shipping option for packages under a pound "parcel select lightweight". See https://pe.usps.com/text/dmm300/Notice123.htm#_c139 https://pe.usps.com/text/dmm300/Notice123.htm#_c139 The cheapest rate is $2.02 for 13 oz. This rate applies when mail is injected at the closest mailing point (DDU), which "mailing across the street" corresponds to.

gamblor956 7y ago
No, the claim is true. Under the UPU, the USPS is required to charge Chinese shippers a "terminal fee" for packages shipped from China. However, due to China being classified as a "transitional country" it had extremely low terminal fee rates. Combined with China subsidizing shipping for export-based businesses, it was generally cheaper for a business in Shenzen to ship small/light products by post than for an American business to ship an equivalent product by USPS across the street. The deal secured by the US allows the USPS to begin charging new terminal fee rates beginning next summer. Presumably the new rates will change the economics of this situation, but in the meantime Chinese shippers still have at least a year to continue these subsidized shenanigans.
- ikeboy 7y ago
  I literally linked the price sheet showing that it's wrong, did you not read my comment? >Combined with China subsidizing shipping for export-based businesses, it was generally cheaper for a business in Shenzen to ship small/light products by post than for an American business to ship an equivalent product by USPS across the street. Please back this up with examples.
  - gamblor956 7y ago
    There were more than a dozen other comments with examples when I posted my original comment, and each of those examples has supporting comments. Additionally, there is the NPR report cited in the parent confirming the disparity in shipping costs (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...). Unless you're saying the NPR got it wrong? You linked to a price sheet for US shippers. Chinese shippers don't pay those rates. They pay Chinese shipping rates (which I can't provide an authoritative example of because they're negotiated on a vendor basis), and the terminal fee. In many cases, China Post covers the terminal fee and/or all shipping costs for strategic regions, such as for vendors located in Special Economic Zones. The important thing though is that the terminal fee for Chinese shippers is lower than the lowest postal fee for US shippers.
    - ikeboy 7y ago
      My comment was calling out the NPR for repeating an incorrect claim, yes. Yes, Chinese shippers pay different rates. NPR claimed to ship a mighty mug across the street for a US shipper would cost $6.30, when the actual cost would be about a third of that.
- pravda 7y ago
  > meantime Chinese shippers still have at least a year to continue these subsidized shenanigans. Um...the beneficiary of these "subsidized shenanigans" is the American people! Bad for the middleman, bad for the parasites, bad for the FBA goofballs, but good for the American people.
mips_avatar 7y ago
Ok so you're right, you could drive to your local postal office and if you are commercially shipping stuff you can do destination delivery unit (DDU) and get a 13 oz mug to your next door neighbor for $2.02. So let's assume the fair cost of last mile delivery for a 13 oz mug is $2.02. The Chinese knockoff mug cost on ebay $5.69 including shipping from China. So if the Chinese seller was paying fair last-mile delivery (which they weren't), they would be manufacturing and shipping a 13 oz mug to a local postal office in America for $3.67.
- Consultant32452 7y ago
  A 13oz coffee mug retails at the dollar tree for $1.
- shanecleveland 7y ago
  Except that rate wouldn't be available at your local post office. The $2.02 rate referenced is only available to an eligible business meeting many requirements to achieve that rate: https://ribbs.usps.gov/shipproductsservices/documents/tech_guides/PSLWUser.pdf https://ribbs.usps.gov/shipproductsservices/documents/tech_g... If NPR was looking to ask the "average" business what it would take to fulfill a single order, they likely got a good answer. And the shipper may have been overestimating final shipping weight if done on the fly.
- ska 7y ago
  FWIW you could ship a 40ft container of mugs (something like 20,000 of them individually packaged) from china to Seattle, say for a rough cost of about 10c per mug. Bulk freight of nonperishable things is cheap.
  - Gibbon1 7y ago
    I've thought recently that the low cost of container shipping blows the economic theory of comparative advantage out of the water. At least the common and naive one that's based on national/political boarders. Ask why Australia ships iron ore and coal to China to be made into steel.
  - 7y ago
mlyle 7y ago
OK, so when we take the most hyperbolic example-- mailing from China only costs slightly less than a special rate for DDU/presort to a nearby post office, when you use a special service with volume and account and marking requirements. It's still an absurd result.
- ikeboy 7y ago
  China post is mailing hundreds of millions of packets. Comparing their rates without taking volume and presort discounts into account is going to be misleading.
  - mlyle 7y ago
    The claim was that someone (and, actually, this includes low volume mailers) could mail something from China for a total cost less than his cost to mail it across the street. The claim seems to be true. Yes, he seems to have overstated his shipping cost and could have done better. Yes, with the combination of all 3 of A) volume pricing, B) presorting, and C) taking it to the specific delivery unit, you can get pretty close to the cost to mail a parcel from China. To somehow take these facts and get to "lolol it's a false claim" is absurd.
    - ikeboy 7y ago
      The mail is aggregated at the country level, sorted, etc. To call it low volume is like suggesting someone using Amazon's FBA to ship a package to their customer is a low-volume shipper, rather than reflecting Amazon's huge scale of logistics. >The claim was that someone (and, actually, this includes low volume mailers) could mail something from China for a total cost less than his cost to mail it across the street. Actually, the claim made there was that someone could sell something including shipping from China for less than the shipping cost across the street. This claim is laughably absurd, and the comment I was replying to said that NPR had substantiated that, which is also absurd. If they'd fact checked that podcast the $6.30 figure would have never made it in.
      - 7y ago
joe_the_user 7y ago
Your claim here is basically incorrect. "Parcel select" is a service for large mailers who deliver packages, in bulk, to multiple post facilities in the US, near to the destination of the package and have the USPS do the "last mile delivery". Does China Post have a fleet of trucks, in the US which moves Chinese packages to a closer US postal delivery facility. I believe not. Moreover, if China did have such a service, someone, China or the US is subsidizing it since individual shippers in China, not doing any aggregating themselves get a rate equivalent to large shippers in the US who aggregate and must pay the costs of this themselves. "“Parcel Select” is the registered trademark name for the Postal Service’s economical ground delivery service for packages entered in bulk, including those entered at destination facilities. It is designed for and generally used by large- and medium-sized parcel shippers. Parcel Select mailers pay postage that reflects the degree of work-sharing they do in presorting their parcels and/or drop shipping their pieces at a destination facility located closer to the delivery point. Mailers are responsible for transporting their Parcel Select pieces to a destination bulk mail center (DBMC), destination sectional center facility (DSCF), or a destination delivery unit (DDU) for business and residential delivery." https://about.usps.com/postal-bulletin/2007/html/pb22219/kit2_002.html https://about.usps.com/postal-bulletin/2007/html/pb22219/kit...
- ikeboy 7y ago
  I'm not claiming that China is using Parcel Select. I'm responding to the claim about local shipping in the NPR piece. They explicitly claim that the prices quoted are just for last mile delivery.
  - joe_the_user 7y ago
    You are claiming that China is charging a price equivalent to US delivery but it isn't. It's charging a price equivalent part of US delivery which clearly a false comparison. The cost for an individual shipper in the US versus the cost for an individual shipper in China is clearly the correct point of comparison and it seems NPR was in making that comparison. Edit: removed comment about other thread.
    - 7y ago
fyfy18 7y ago
I remember a few years ago I went to Malaysia. It was cheaper to send a postcard from there to the UK, than within the UK itself.

baybal2 7y ago

China keeps paying its terminal dues to US, so that 50 cent postage does not comes that cheap to the China Post.

The_suffocated 7y ago

Thanks for the link. The price difference is huge. Around 16:20 in the programme -- if one ships a 3/4-pound package across the US, the USPS has to charge the shipper $4.76 for the "last mile", but if the same package is imported from China, the USPS can only charge China Post for $1.39 according to the UPU reimbursement rates.

ikeboy 7y ago
https://pe.usps.com/text/dmm300/Notice123.htm#_c139 https://pe.usps.com/text/dmm300/Notice123.htm#_c139 This shows the rate for 12 oz under Parcel Select—Lightweight. Depending how closely you're injecting the product (how many miles the "last mile" is), rates range from $1.83 to $4.34. Not seeing $4.76 anywhere.
- ehvatum 7y ago
  The absolute lowest theoretical price for having the USPS deliver a presorted parcel that my logistic network injects into the USPS delivery network as close as possible to the recipient is still more than the terminal fee China would pay USPS to take that parcel from port to recipient doorstep. I think that's what the NPR report was getting at, with their colorful tales.