Changing Cheap Shipping from China to the US – ePacket, The UPU and The White House Memorandum

I’d like to explain the developing story about changing subsidized shipping from China to the US. Currently, US merchants pay more to ship packages between US cities than Chinese merchants do to ship to the US.

The terms that you may have heard related to this are ePacket and the UPU. I will explain them.

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Previous to 1874, if anyone in any country wanted to ship to another country there was no unifying body to help with logistics or payment. The UPU or Universal Postal Union was formed. It now has 192 countries and became part of the UN in 1948. When mostly letters were being mailed, this allowed the sender to pay in their own country a rate that was reasonable in their own economy, and know that the letter would be delivered in another country. In the 1980s the financial problems started to arise with this agreement, mostly in relation to magazines. They were heavier and more expensive to ship than letters. So, in 1991 the UPU was updated to discount the shipping of magazines and the small inequalities that arose from trade disparities were basically just paid for by the terminal or recipient country. The volume was relatively low, so this was a minor expense in the name of international trade and communication.

Now, fast forward to the 2000s and the explosion of e-commerce. Small packages of products qualified for the shipping discounts that were originally intended for magazines. China benefited hugely from this as they exported a large quantity of products and the USPS ended up paying for this under an agreement that was intended for magazines.

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Previous US administrations have been hesitant to pull out of treaties or threaten international bodies. So, to try to fix this problem, in 2011, ePacket was agreed to between the US and China. This still allowed for low shipping rates from China to the US but was higher than the UPU rates so it was better than what we had but far from a solution.

This week, the UPU had their quadrennial meeting in Ethiopia. The current US administration issued a memorandum on Aug 23 which basically threatened the UPU with consequences if they do not change their policy to bring fair and competitive pricing international shipping.

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The current administration, for good or ill, has no problem pulling out of established treaties, international bodies, or in general making other countries mad at us. So, it looks like the outcome of the meeting is either going be broad change by the UPU to their own policy or US simply pulling out and making their own.

We will update this post, our Facebook Page, and our community as this story develops.

We sit down with the experts in the industry

Jeff from Seller Labs sits down with us to discuss the Amazon search engine.

Jaya Patel is an Atlanta based entrepreneur. She started selling on Amazon and eBay and sourced via arbitrage.

Rob from Payoneer is going to show us how to save money on your international shipments.

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We sit down with the experts in the industry

Jeff from Seller Labs sits down with us to discuss the Amazon search engine.

Jaya Patel is an Atlanta based entrepreneur. She started selling on Amazon and eBay and sourced via arbitrage.

Rob from Payoneer is going to show us how to save money on your international shipments.

2018-09-06T11:38:28+00:00 News and Updates|Comments Off on Changing Cheap Shipping from China to the US – ePacket, The UPU and The White House Memorandum