Americans Are Receiving Unordered Parcels from Chinese E-Criminals
forbes.com
forbes.com
https://news.ycombinator.com/item?id=15940318
It was also submitted seven hours ago, here:
https://news.ycombinator.com/item?id=15944653
The original submission 19 days ago is here, with 90 comments:
How did this "deal" happen? Who is getting paid, and what benefit does the USA get from this?
I mean this is just consumer shipping we're talking about, small potatoes compared to commercial B2B shipping. But still it must add up to something significant as well as being demonstrably hurtful to US-based small business.
Thus it made sense that USPS carries Chinese parcels for free, if China post carries US parcels for free in return.
It's a function of the United Nations: https://en.m.wikipedia.org/wiki/Universal_Postal_Union
Basically, China is being subsidized because they qualify as "third world".
Wikipedia on the UPU: https://en.wikipedia.org/wiki/Universal_Postal_Union
Although no expert, I do know enough to possibly answer your question. This has been going on since the 60's and to some extend the Universal Postal Union goes back to 1863[1]. At the time, when you wanted to mail a letter, it was fairly complex. You had to arrange for the details of your shipping for every route your letter took. Meaning you had to calculate for every leg of the shipment ahead of time. So they came up with these 3 points (From Wikipedia):
There should be a uniform flat rate to mail a letter anywhere in the world
Postal authorities should give equal treatment to foreign and domestic mail
Each country should retain all money it has collected for international postage. [2]
Along came USPS and signed a special deal with China in 2010 to increase their presence in China (well, that's the official statement anyway[3]).
That statement however leaves out a very important part. Which is that USPS lost so much money under UNU, that although they had a net loss of $29.4 million in 2012[4]. They would have "lost another $1 million or so in 2012 had Chinese shippers opted for regular mail instead of ePacket."[4].
So basically the USPS was already losing a ton of money, and this is a way of minimizing the damage.
The real issue is that the broader picture isn't really taken into consideration. Which is, that China is literally sending things for rates cheaper than Amazon which is estimated to pay USPS $2 per package[5]. Take the fact that most items are manufactured in China for cheap anyway, and you have just signed away a lot of domestic business opportunities.
[1]http://www.slate.com/articles/news_and_politics/explainer/20...
[2]https://en.wikipedia.org/wiki/Universal_Postal_Union
[3]https://about.usps.com/news/national-releases/2011/pr11_037....
[4]https://www.washingtonpost.com/news/storyline/wp/2014/09/12/...
[5]https://www.bloomberg.com/news/articles/2015-07-30/it-s-amaz...
Anyone feel free to correct or add information, it's an interesting topic.
I knew few Russians who made a non insignificant amount of money by going to China and setting up their own mail order dropshipping companies the same way locals did.
The USPS isn't losing a ton of money. It is profitable.
The "loss" is that congress mandated that the USPS accumulate 75 years worth of employee retirement funds and gave them 10 years to do it. So they "lose" $5B a year because they are not able to pay that amount into a retirement fund.
USA has a duty to help China to lift out of poverty.
The US built modern China in the exact same way the old European powers helped build up the US with vast capital inflows and trade.
All the parties have benefited. One can argue China benefited more, however the very undeveloped party in the transaction will usually benefit a lot more (again as was the case with the early US economic development in trade/investment with the British Empire or France).
Of course the British had smuggled out the design of Italian silk factories and rubber seeds from Brazil, breaking the Portuguese monopoly....it was ever thus.
> ePacket volume and revenue have increased, but the Postal Service still lost at least $39 million during FYs 2011 and 2012. Until accurate costs for ePackets can be identified and used as a basis for pricing, the risk of revenue loss for ePackets remains high.
Wade Shepard first wrote about this [1] for Forbes in 2011, following the USPS's announcement of the program [2]. His commentary sets the program against a backdrop of a global shipping war and plummeting postal service revenues. He writes, "Essentially, U.S. shippers are partially paying higher shipping rates to make up for the hit the USPS takes giving subsidies to the Chinese."
[0]: https://www.uspsoig.gov/document/inbound-china-epacket-costi...
[1]: https://www.forbes.com/sites/wadeshepard/2017/11/05/how-the-...
[2]: https://about.usps.com/news/national-releases/2011/pr11_037....
> He writes, "Essentially, U.S. shippers are partially paying higher shipping rates to make up for the hit the USPS takes giving subsidies to the Chinese."
Moreover, even if the program "makes money" for the postal service it comes at the expense of hurting competitiveness of domestic mail-order. There must be some other side to the story, right? Protectionism is harmful in itself, but this seems like the exact opposite: active harm to domestic business in favor of Chinese business.
> They came up with the ePacket, which is actually meant to be an improvement over the rates set by the UPU. In exchange for providing tracking and faster delivery times, ePacket partner countries agree to pay slightly higher rates.
So the Chinese pay more for ePackets than they would for standard mail by UPU rates.
e.g. see report below (in Chinese), 5 years and 9 months in jail for doing something similar
He solves an important waste management problem by using the free postal service.
Fortunately, it seems unordered merchandise is yours to keep. If I was targeted by this, I'd probably find a local store to take them rather than just throwing it all away.
~50 hair tie packets, ~5 beanies, a scarf, and some makeup.
My wife sometimes wears the light blue beanie they sent and the scarf. I still hear her say "I need a hair tie. Can't find one anywhere" every couple of days. Keep 'em coming guys.
I'm so happy my tax dollars are going to subsidize this.
https://en.wikipedia.org/wiki/Universal_Postal_Union
There have been reforms in the works to help cover the costs in the terminal country, but I'm not sure if they have been effective or not.
http://news.upu.int/no_cache/nd/member-countries-adopt-new-t...
Alibaba also has some sort of logistics deal in place with the USPS to cut costs, but I can't really seem to find much in the way of details.
http://postalnews.com/blog/2015/09/16/chinas-alibaba-and-usp...
However, we see that the USPS does get a lot of advantages that are effectively subsidized by others:
http://fortune.com/2015/03/27/us-postal-service/
There are real subsidies that the USPS gets that are funded by taxpayers, it simply that those are not paid in cash. So I think the person you were responding to has a completely valid point. They are not competing and doing business on the same terms as other businesses and squandering their cash is enabled because of the subsidies of other expenses that they don't have to bear directly.
The Post Office has been a political battleground for 40 years and it shows.
The “they are subsidized & squander their money” angle seems unfair given that. Personally I think they do a fairly good job.
That said I think it’s fair to say they are tax subsidized, it’s just not much of one.
1. They have been bailed out numerous times. Yes, they paid their debt back but it was lent at a preferred rate by congress to an entity that no commercial lender to would do at those rates. (see Postal Service Reform Act (H.R. 5714))
2. The Post Office is except from all local state, city, and federal taxes. That also includes road tolls, vehicle registration, etc (wouldn't Fedex love that)
3. The Post Office has an open line of credit from Treasury under preferred rates and terms that no regular business would get.
4.Finally, they hold a monopoly status on delivery of first-class mail. This monopoly status, and the legal issues surrounding "whats considered legal notification" is tantamount to an indirect tax.
I’ve seen forever stamps marketed for years, but it’s been a long time since the price of a letter went up. So, if the price went up to 51 cents, your forever stamps would still work, but, honest question, what are the realistic chances of that happening?
[1] https://en.wikipedia.org/wiki/History_of_United_States_posta...
Yep, me too.
I get to try out all sorts of different vape gear by buying direct from China. Have to wait 3-4 weeks for stuff to show up but the savings are definitely worth it. Quality on some of the clone stuff isn't always the best but for the price of a Big Mac meal you can try out a fairly decent atomizer to see if it's even worth buying OEM (which reminds me that the next time I go to the vape shop by my work I need to replace one of my clones before they stop selling it).