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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/kit...

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.

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.

Where did I claim that? I'm claiming NPR is making/repeating a problematic comparison by using retail pricing for domestic shipping.

International mail is aggregated by China post, and they pay the USPS for the last mile. To evaluate to what extent USPS is subsidizing them, you need to compare to what someone else who aggregates and pays for last mile delivery would pay. This is very different from what an individual shipper would pay.

International mail is aggregated by China post, and they pay the USPS for the last mile.

The aggregation that USPS gives domestic shippers a discount for involves actually doing all but the last mile of the shipping process - taking a large group of packages to the appropriate shipping area. This is a process that would require a shipper to have a fleet of long distance trucks (something large and medium sized US shippers have).

If you're claiming China Post does this in the US, I think you need serious references. And, as I mention above, it ultimately doesn't matter. If China Post is doing this, they would be doing it for free because the total cost we're talking about individual shippers paying, in shipping things from China, is close to the last mile cost that USPS charges domestic shippers.

No, it's somewhere in between. They're not injecting at the local level, but they are sorting it (depending on the exact program).

This is kind of ridiculous, USPS also sorts the packages they receive from individuals. It seems kind of clear that there's no special magic that packages coming from China are going to have that packages that are already in the US are not going to have. The USPS page I link to above specifically says that the USPS prices lower when companies do their work for them. That work is not going to be free.

It's not magic, it's just that the USPS doesn't have to do the work of sorting them.

Labor costs in China are much cheaper than in the US, it stands to reason their cost of sorting there will be less than what the USPS implicitly charges for sorting here.

> International mail is aggregated by China post, and they pay the USPS for the last mile.

This is the key point in your claim that was not clear in your top-level comment, which is the source of the confusion/dispute. (I have no idea who is right.) Consider editing your top-level comment to clarify this claim (with an edit flag) and, ideally, link to somewhere that backs it up.

For instance, even if you're right it probably means that China is subsidizing the shipping to the distribution point, which would be an important thing to understand.

It's mentioned in the NPR article. Don't think I need to source the part that I agree with them on.

As your comment exchange elsewhere shows, the nature of China post's contribution is exactly the crux of the matter, and is not at all obvious/indisputable to someone reading the transcript of that NPR podcast.

I guess it would be interesting to know how much the USPS is subsiding them, but I think what makes the NPR example striking is that they are comparing end-to-end prices: some business in China is paying less than $5.69 and the American business would pay $6.30 for the same service.

But I suppose part of the difference is not due to the subsidy but because the China post has lower labor costs for the aggregation work?

Amazon charges sellers $3.28 in fulfilment fees for packages between 10 and 16 oz, which includes two day shipping to prime members.

That's end to end, although you do need to pay to ship it to Amazon's warehouse, but that can be done in bulk cheaply.

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.

> 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.

It's the American people that are paying for the shipping subsidies, too. It's about the same amount of middlemen either way.

So by itself that's a wash, no benefit nor loss.

But also people that could have bought a local product send their money out of the country, which means less money circulating in the economy.

And more labor is spent on shipping than necessary, which means less value per dollar spent.

Both of those hurt the American people.

Right but in real practical terms the cost for an individual and businesses to have goods in hand is going up. The second order effect is that the cost of goods from local businesses are also going up since that they were taking advantage of cheap shipping too.

In vague hand wavy tickle down from a government that isn't going to lower taxes nor reduce total expenditure there might be a benefit in increased funding available for other things but the visible net effect is less money in individual Americans' pockets.

Suggesting that the postal service will charge $2 more for X and $2 less for Y so it all balances out is not "trickle down".

Maybe they'll save more to that pension fund, but I can't in good conscience say "The USPS should keep that policy where I can get $3 cheaper shipping from china and the money to pay for it comes out of the USPS pension fund."

If most of the money stays inside the realm of shipping, the average cost for local businesses will go down. (The first order effect just shuffles money around. More to buy from china, less to send to customers, on average the same. A second order effect is that more purchases from china will shift to being bulk, dropping the average cost.)

Where is the USPS charging less now?

I agree with you that the right deal was made. But the cheap shipping from China has pretty much proved a market for subsidized small parcel shipping as an economic multiplier that ought to be made available to everyone in the US and abroad.

They're not charging more to china yet either! Give it a while, then we'll see where the additional revenue goes.

I'm not sure I agree that there's a big difference between $4 small parcel shipping and $.50 small parcel shipping to the economy, especially when it involves waiting a month for the product.

No, getting cheaply made crap even cheaper is bad for the American people because it drives out competing cheap but high-quality US- and Canadian-made products.

And that is the primary reason that China subsidizes shipping costs for Chinese manufacturers: to drive foreign competitors out of business until only China is left.

The current scheme allows me to cut out expensive middlemen for quite a bit of products. Middlement that don't add anything I value to the equation.

Alternative is getting the same or maybe at best rebranded chinese OEM products, that went through a local distributor that adds his own markup, taxes, and other stuff, because he's operating in bulk quantities.

Changing the current scheme will be bad for plenty of consumers around the world.

It will also make it more expensive to get replacenemnt parts, for typical electronics, and will make self-made repairs more expensive. Because normal (unatuhorized) people can only get many of those spare parts from China.

Making it more expensive to ship from China will have many negative effects. It may have some positive ones, but that's to be seen.

Assuming you are an average mail user, you can still buy directly from China, no middleman, and spend the same amount of money you always did. The difference is that the cost will no longer be hidden behind abstract government subsidies.

If a middleman ends up cheaper because of bulk shipping, that's because they're actually providing value! They are reducing the total cost of shipping.

If the total shipping cost you pay, including your share of hidden subsidies, goes up? That means you were an above-average china-buyer, and the average citizen was paying part of your bill and getting nothing. That's not fair, and you're not entitled to offload shipping costs onto everyone else.

You assume taxes will go down as a result of this, which is most certainly not the case. They'll just be redirected to something else, perhaps something I don't care as much about.

And I'm also paying quite a bit of taxes that go to someone else's needs, and I have nothing from. Just a nature of taxation and government subsidies.

This just shifts the balance of what's comming back to me, to where I don't care as much, perhaps.

Taxes may not drop instantly, but on average I'd expect extra money to delay budget increases, which has just about the same effect over time.

Especially when you're looking internal to the post office.

Like the way Amazon subsidizes shipping to drive retail stores out of business?

How are retail stores supposed to compete when Amazon will ship for free! Eventually, there will just be Amazon, and then watch prices skyrocket!

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.

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/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.

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.

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.

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.

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.

Also note that the US delivery China is paying for is from a port to a final destination. If someone is comparing from East Coast to West Coast or vice versa, they're looking at a package traveling further in the US than the Chinese one is.

Yes, but longer than from the delivery unit. :P

Fair enough, but DDU is a good response when someone is claiming their cost to ship across the street is insanely high.

If you set up an apples to apples comparison, I think China would end up slightly cheaper much of the time, but nowhere near the hyperbolic numbers that get thrown around. Maybe they pay $2 for something that costs $2.25 or something. It's difficult to point to specific comparable shipments where they're actually cheaper, though.

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.

> 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.

I can't use Amazon's FBA to ship one package cheaper than I could myself.

End, low-volume customers in China can get packages shipped to the US cheaper than I can myself as an end, moderate-volume shipper in the US.

Fair enough, but that's because China post is aggregating it. Part of the excess cost of your moderate volume shipping is because the USPS needs to sort your mail and doesn't need to sort China's mail.

I think using published rates for presorted mail is fair. It's not the cheapest the USPS charges - they give further, unpublished, discounts to Amazon, and they still make a profit there.

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.

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_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.

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.

But if you listen to the story, these were individually shipped by the postal service, from an ebay seller in china.

Right - but what I was pointing out is making that particular scenario more expensive doesn’t shift the overall incentives that much of the COGS are significantly different.

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.

Also the cheapest 1oz DDU rate is $1.62 and I can buy a generic mug with free shipping for less than that on aliexpress.

Let alone how moving up one step in granularity to the more realistic DSCF pricing, where you go to the closest of 350 facilities instead of the closest of 30000, is already $2.52 for 13oz...

A 13oz coffee mug retails at the dollar tree for $1.

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.