Author Topic: Shipping news: are we about to see a big increase in prices for Chinese parts?  (Read 976 times)

ahiddentableau

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In the news today: the Trump administration was to have China's postal classification altered to reflect its recent growth.  This would potentially raise the now heavily subsidized shipping rates we all rely on for a lot of the parts we use when building.

I'm not really sure what to make of this atm.  From our perspective, the cost of certain parts could go up substantially--footswitches and toggles most especially.  But at the same time, a lot of the stuff isn't being shipped from China, but from other Asian countries like Thailand.  If those countries aren't also reclassified, doesn't that mean there's a ready-made workaround for Asian sellers?

Anyway, here's a link:
https://www.theatlantic.com/technology/archive/2018/10/trump-changes-terminal-dues-and-epacket-rates/573337/

alanp

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Does this mean that shipping costs for parcels leaving the USA will go down? As I recall that that was the excuse given, last time they went up, that the US posties were subsidizing the Chinese postal industry due to these lopsided agreements.
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gtr2

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Yeah, it's kind of a mess huh...

I wonder how long USPS will stay afloat tbh...
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Muadzin

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Does this mean that shipping costs for parcels leaving the USA will go down? As I recall that that was the excuse given, last time they went up, that the US posties were subsidizing the Chinese postal industry due to these lopsided agreements.

That's the kicker that keeps me from ordering anything American. Exhorbitant shipping costs, made worse by paying exhorbitant import and customs duties over your purchase plus shipping costs every time. At least with the Chinese I only have to pay the latter some of the time.

EBRAddict

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Yeah, it's kind of a mess huh...

I wonder how long USPS will stay afloat tbh...

USPS make most of their money delivering our daily rations of junk mail and domestic packages. China mail only pays terminal dues, rates which are based on how developed a country of origin is. The amount of product mail from China coming in on ePacket has been doubling every year for several years, and the USPS loses money delivering them. It also makes US sellers much less competitive since shipping costs for them are five times higher or greater.

Whether or not that (China exploiting a program to help disadvantaged countries) bothers someone more than the increase in their postage from China is another subject.

ahiddentableau

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I've read a bit more about this in the last day or so and I think the bigger issue I'm trying to understand is this: if America reclassifies China, what are the knock-on effects?  The article I linked to says that the American government is trying to destroy the old multilateral model for determining postal cost sharing, therefore forcing every country to renegotiate new agreements along the lines set out by them.  That suggests that this will reshuffle the deck for every country in the world.  So what is going to happen?  Will every country in the world be obliged to tell their nationalized postal services to jack up the rates for all packages of Chinese origin?  Or will the price hike only impact the cost of goods mailed from China to the United States?  If it's the former, then from a pedal building perspective, we're going to be facing higher costs for a lot of staples.  If it's the latter, then I think companies will adapt quickly to a kind of workaround situation where a third party in a third party country simply uses its preferential shipping rates instead of China's--kind of like Tayda uses Thailand's agreements to sell Chinese goods to the West.  I guess a lot depends on how the rest of world reacts.

reddesert

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To take a couple of real world orders of mine, this might mean I can't buy a single part from China for $1.29 + free shipping (which seems unfair to US sellers and the USPS). But I don't think it would affect that one can order $90 of parts from Tayda and have it shipped DHL for $9, which is still inexpensive. Requires planning ahead to consolidate orders and reduce packaging, which isn't a bad thing overall.

ahiddentableau

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To take a couple of real world orders of mine, this might mean I can't buy a single part from China for $1.29 + free shipping (which seems unfair to US sellers and the USPS). But I don't think it would affect that one can order $90 of parts from Tayda and have it shipped DHL for $9, which is still inexpensive. Requires planning ahead to consolidate orders and reduce packaging, which isn't a bad thing overall.

For selfish reasons, I hope you're right.  If the rest of world doesn't go along with the Americans and refuses to rip up the multilateral agreement I'm pretty sure that's exactly how it will be.  But if they do go along, then at least from what I've read, Tayda could well lose its ability to ship its orders via Germany in the cheap way we all basically take for granted.  Even though they don't use the packet system, I think those rates are still a part of the international framework that the packet system came out of.  If that's right, then Tayda is no different than the Chinese ePacket sellers in taking advantage of the lowest subsidized rates they can get (I've often wondered what the bottom line of acting as this kind of intermediary looks like from the perspective of the German postal service).  If the system goes away then cheap shipping like that may not survive anywhere. 


Muadzin

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And this is why there are no winners in a trade war. Even if Trump does manage to bring down the Chinese, he'll only succeed in making things more expensive for everyone, as American webshops and shipping will not get cheaper. Same thing with tariffs on other goods.

drog_trog

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Does this mean that shipping costs for parcels leaving the USA will go down? As I recall that that was the excuse given, last time they went up, that the US posties were subsidizing the Chinese postal industry due to these lopsided agreements.

That's the kicker that keeps me from ordering anything American. Exhorbitant shipping costs, made worse by paying exhorbitant import and customs duties over your purchase plus shipping costs every time. At least with the Chinese I only have to pay the latter some of the time.

Im in the UK and its because of the EU that we have to pay high import on US goods. Shipping costs from China have gone up so much in the last year.

Muadzin

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Im in the UK and its because of the EU that we have to pay high import on US goods. Shipping costs from China have gone up so much in the last year.

But those import charges would have disappeared if TTIP had gone ahead between the US and the EU. Unless the UK gets its own fully comprehensive free trade deal with the US after Brexit those import charges would still remain. Because governments willingly abolishing taxes for no political gain? That would be a first.

drog_trog

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I know ye. I hope we do get a good deal.