Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
The Postal Illuminati
Old 08-23-2018, 01:59 PM   #1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 44,330
The Postal Illuminati

Ever wonder why you can purchase something from China for a delivered price less than you would pay for shipping alone if it was purchased in the US? I've often wondered why, and now I found the answer.

It's a conspiracy. Yes, it actually is.

Example: The Mighty Mug

Quote:
It's a travel mug that's almost impossible to knock over, invented by a guy in New Jersey named Jayme Smaldone. A few months ago, Jayme realized he could order a knockoff Mighty Mug from China and get it shipped for less than it would cost him to ship his mug to a neighbor.

The reason for this price gap, Jayme claims, is a secretive group of postal policymakers that meets every four years to fix international shipping rates. A kind of postal illuminati.
You can thank (or curse, if you are Jayme Smaldome) the Universal Postal Union (UPU), headquartered in Bern Switzerland. This little known group of representatives from the Postal Services of 192 countries meets every four years to set the rules for international mail. And in doing so they have created a reverse trade barrier, actually changing the flow of the global economy.

You can download the Planet Money episode from NPR or link to the transcript here.
__________________

__________________
Numbers is hard

Charter resident of the lumpen slums of cyberspace

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-23-2018, 02:20 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Mar 2011
Posts: 4,870
Sadly, this is a minor player in the cast of those who really --and secretly-- rule the world.
__________________

__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is offline   Reply With Quote
Old 08-23-2018, 02:47 PM   #3
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 11,401
I'm sure it's far more complicated than most realize.

Similarly, a friend needed to import some things from China a few years ago and discovered that it only cost a few hundred dollars to ship a full 40-foot container from China to the US west coast. No matter what it contained, what it weighed, or how full it was. I would never have guessed that in a million years.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 08-23-2018, 02:57 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 22,097
I have been buying small electronic parts from China and Hong Kong, and the price is often not much more than the cost for an international postage stamp from the US. Obviously, the foreign vendors pay a lot less for mailing from their country than I do for mail from the US.

I assumed that the postal service in the destination country will have to eat the cost of delivery, and this NPR talk confirms that.

By the way, I never heard of the Unspillable Cup, but here it is.

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
NW-Bound is offline   Reply With Quote
Old 08-23-2018, 03:07 PM   #5
Thinks s/he gets paid by the post
 
Join Date: Jun 2016
Posts: 1,768
Not sure I would drink from anything cheap from China. BPA's, lead.
COcheesehead is offline   Reply With Quote
Old 08-23-2018, 03:41 PM   #6
Thinks s/he gets paid by the post
Red Badger's Avatar
 
Join Date: Jan 2017
Location: Piedmont Region
Posts: 1,268
I had at least one foot in transportation/logistics for all of my civilian career. I was at a conference and met a guy from NC who owned some sawmills. It is not easy or cheap to get a truck to come to a mill nestled deep in the remote NC mountains. Anyway, his business was high end wood flooring. He would ship the wood to China, where it was processed into hardwood flooring. Then, the flooring was shipped back to DC's in the US to be sold. I found it almost unfathomable that bucket brigade of logistics was cheaper than processing the wood locally.
__________________
Never let yesterday use up too much of today.
W. Rogers
Red Badger is offline   Reply With Quote
Old 08-23-2018, 03:46 PM   #7
Full time employment: Posting here.
 
Join Date: Dec 2014
Location: St. Charles
Posts: 827
Quote:
Originally Posted by braumeister View Post
I'm sure it's far more complicated than most realize.

Similarly, a friend needed to import some things from China a few years ago and discovered that it only cost a few hundred dollars to ship a full 40-foot container from China to the US west coast. No matter what it contained, what it weighed, or how full it was. I would never have guessed that in a million years.
A few hundred dollars (China to US) sounds like a bit of an understatement. I think it more like $2,000 to $3,000, though probably lower if you are shipping thousands each year. Still a bargain if you can maximize the use of the volume and weight limit.

The cost to ship from US to China, however, can be under $500. This is because a high percentage of the containers are returning empty (explained by our trade deficit) and any money to offset the cost of the return trip is a plus. Port charges, customs clearance and drayage to/from rail spur or port are not included in this cost. However, when I was working, we would often ship containers from the Midwest to China for about $1,000, all costs included except duties.
__________________
If your not living on the edge, you're taking up too much space.
Never slow down, never grow old!
CardsFan is offline   Reply With Quote
Old 08-23-2018, 03:56 PM   #8
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Northern Kentucky
Posts: 11,401
Quote:
Originally Posted by CardsFan View Post
A few hundred dollars (China to US) sounds like a bit of an understatement. I think it more like $2,000 to $3,000
You're probably right, since I only know what my friend (Chinese-American) told me. He had the shipment arranged by relatives in China, which may also be part of the story.

Still, even $3K for a 40 foot container seems much cheaper than I would expect. Depends on what's in it, of course.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 08-23-2018, 05:43 PM   #9
Recycles dryer sheets
davebarnes's Avatar
 
Join Date: Dec 2015
Location: Berkeley, Denver, CO, USA
Posts: 367
Speaking of TEUs.
Read this https://www.amazon.com/Box-Shipping-.../dp/0691170819
The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger
It is a quick read and a fascinating story
__________________
Dave Barnes
Old (70.0) Fart Nerd
AA 78/15/7, WR <1.0%, still working 2ish hrs/day
davebarnes is online now   Reply With Quote
Old 08-24-2018, 09:14 AM   #10
Dryer sheet aficionado
 
Join Date: Jan 2017
Location: Sac
Posts: 29
I was listening to the same broadcast on NPR yesterday. It's amazing how all that works. It was an eye opener.
Anna J is offline   Reply With Quote
Old 08-24-2018, 09:54 AM   #11
Thinks s/he gets paid by the post
Koogie's Avatar
 
Join Date: Nov 2007
Location: GTA
Posts: 1,177
Quote:
Originally Posted by davebarnes View Post
Speaking of TEUs.
Read this https://www.amazon.com/Box-Shipping-.../dp/0691170819
The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger
It is a quick read and a fascinating story
You might enjoy this...

__________________
1914 - 1918. Lest we Forget.
Koogie is offline   Reply With Quote
Old 08-24-2018, 05:45 PM   #12
Recycles dryer sheets
 
Join Date: Jan 2014
Posts: 105
Thanks for the link. I've often wondered the same thing. I can buy an item from China on Ebay for $2.99. Somehow it's manufactured and shipped all the way to the U.S. and someone is still making a (small) profit.
I'm going to download the audio (if possible) and listen to it on my morning walk.
Palmtree is offline   Reply With Quote
Old 08-29-2018, 08:32 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,872
Thanks, I read the transcript, and watched the Merchant Marine video.

I had always wondered about this. I buy some incredibly inexpensive electronics/hobby stuff from China. Often a small envelope, and sometimes a total cost of just a few bucks, including shipping (I hate the phrase 'free shipping' - it's included in the price).

I figured that a small envelope is a tiny, tiny % of a container, so OK, maybe they can ship it for pennies. But that did raise the question of local delivery - I was thinking, don't they essentially need to buy postage from the US dock to my home? This podcast explained that.

Though the explanation itself is sort of in-explicable. Why would a country agree to this? I guess the US thought it was 'good' because they were the winner for a while, and now the tide has turned, and they can't turn the deal around that fast?

Seems like a really stupid system. Why not just charge for local delivery?

-ERD50
ERD50 is offline   Reply With Quote
Old 08-29-2018, 05:25 PM   #14
Full time employment: Posting here.
 
Join Date: Jan 2008
Posts: 958
Quote:
Originally Posted by marko View Post
Sadly, this is a minor player in the cast of those who really --and secretly-- rule the world.



Cats?
jebmke is offline   Reply With Quote
Old 08-31-2018, 11:42 AM   #15
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,234
I have purchased a few electronic parts from China when I was fixing my computer and was truly surprised at the low prices...I wondered about the quality, however, it was just fine.

Now, to ship anything to Europe or South America - ouch! I was trying to sell some of my yarn stash and the shipping was twice the worth of the yarn and that was using the postal service boxes that are a flat fee....insane.
__________________
Deserat aka Bridget
“We sleep soundly in our beds because rough men stand ready in the night to visit violence on those who would do us harm.”
deserat is offline   Reply With Quote
UPDATE - US to renegoitiate postal contracts
Old 10-18-2018, 04:22 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 19,872
UPDATE - US to renegoitiate postal contracts

Saw this today. Please ignore partisan politics, it's a government action, politics are a part of it, no way to leave that out.

https://www.msn.com/en-us/money/mark...vhn?ocid=ientp

Quote:
President Trump moved Wednesday to withdraw from a 144-year-old international postal agreement that enables businesses in China to mail small packages to the United States at a hefty discount, an arrangement government officials said boosts foreign competitors and costs the U.S. Postal Service roughly $170 million per year. ...

“This has been a long-standing, long-festering problem,” said Robert Taub, chairman of the Postal Regulatory Commission, an independent federal agency.

...

Under the treaty, which sets fees that national carriers in 192 countries charge for mail delivery, the U.S. Postal Service bills China-based companies at a sharply discounted rate for parcels that weigh less than 4.4 pounds.

...

That resulted in $170 million in losses for the post office last year.

....

Administration officials said they informed the UPU, which is based in Switzerland, that the United States intends to withdraw from the pact — a one-year process, per United Nations rules.

...

UPU Director General Bishar Hussein said in a statement Wednesday that he “regrets the decision” and welcomed the opportunity to talk further with U.S. officials.

“The UPU remains committed to attainment of the noble aims of international collaboration by working with all its 192 member countries to ensure that the treaty best serves everyone,” he said in the statement.

...

Small packages from China to the United States jumped by 182 percent between 2011 and 2012, according to the latest figures from the U.S. Postal Service.

....

A stronger approach to securing better rates for the United States would include other developed countries, such as Norway, ...
-ERD50
ERD50 is offline   Reply With Quote
Old 10-18-2018, 08:12 PM   #17
Full time employment: Posting here.
 
Join Date: Jan 2017
Posts: 810
I saw that, too. Not sure if it's a the right move or not. For example, when and how would these rates have come up for re-negotiation anyway? Is this just a political move to stake out a negotiating position?

I don't know. But if it gets the Post Office more realistic rates, I think it's a good thing. Even if it means I won't be getting small parts shipped from China for a few dollars, including shipping, any more.
CaptTom is offline   Reply With Quote
Old 10-18-2018, 08:15 PM   #18
Thinks s/he gets paid by the post
Fedup's Avatar
 
Join Date: Mar 2014
Location: Southern Cal
Posts: 4,032
Interesting, I didn’t know we do that.
__________________
Just another day in paradise
Fedup is offline   Reply With Quote
Old 10-18-2018, 08:27 PM   #19
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 1,865
Another positive is this has potential to level the playing field for US based small businesses of similar/same products. It is currently cheaper for a lot of these overseas sellers to ship to the US, than it is for a US seller to ship the same size/weight inside the lower 48.

Of course, lots of bureaucratic hurdles first so reality may not end up as rosy as it looks like right now.
Aerides is offline   Reply With Quote
Old 10-18-2018, 08:29 PM   #20
Thinks s/he gets paid by the post
 
Join Date: Mar 2015
Posts: 1,711
Quote:
Originally Posted by Aerides View Post
Another positive is this has potential to level the playing field for US based small businesses of similar/same products. It is currently cheaper for a lot of these overseas sellers to ship to the US, than it is for a US seller to ship the same size/weight inside the lower 48.

Of course, lots of bureaucratic hurdles first so reality may not end up as rosy as it looks like right now.
When you write "level the playing field" you should also write "we all pay more".
__________________

__________________
Old enough to know better.
joeea is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Inflation watch : 2014 postal rate MichaelB FIRE and Money 86 12-27-2013 04:26 PM
120,000 Postal Workers Could Be Laid Off Amethyst Other topics 0 08-13-2011 07:29 AM
Postal Quirks Rant travelover Other topics 7 04-22-2011 05:32 PM
any other postal workers b94new Other topics 0 04-14-2009 07:51 PM
Check out this Almost Perfect Postal Money Order.. Cut-Throat Other topics 6 04-24-2005 06:53 AM

» Quick Links

 
All times are GMT -6. The time now is 04:48 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.