The minimum US postage rate to send a 1 oz to 8 oz package across the street is $8.30. This is the price for any size package going in “zone 1”. That is, to a nearby, instate address. It costs more to send a package to nearby states or across the country, zones 2,3,4,5,6,7, 8 You don’t get shipping updates or delivery confirmation unless you pay more. By comparison the US post office charges no more than $1.50 to Chinese companies to deliver packages of up to 4.4 lbs (2 kg) and they get shipping and delivery confirmation thrown in free. The high US rates are, in part, because the post office is losing money to subsidize postage from China.
US producers can not compete on the sale of small items, in part, because we subsidize the shipping costs. Go to Amazon or e-Bay and you can buy from China packaged items shipped by air for a total price of $1 or so. That includes the price of the item, the shipping cost, and some profit for Amazon or eBay. A US supplier could not sell this cheap even if it were a box of air. The low shipping costs result from a poorly negotiated postage deal of 2011 between us (Obama’s negotiator) and the Chinese. Until 2021, we are committed to deliver a package of 50g or less, (2 oz) for 5 Chinese Yuan, or 70¢ at the current exchange rate of 14¢/NCY. Additional ounces are billed at 35¢ up to 4.4 lbs; use the following table of prices and apply the dollar to CNY conversion. We threw in tracking services and an e-mail confirmation for free, in part because China was poor, and we were rich. Also, the deal was pushed by e-Bay and Amazon, two big supporters of Obama’s presidency.
Adding insult to injury, Obama raised the de minimis amount for billing tariffs from the normal $100 to $800 making almost all purchases from China duty free. Obama made some complaints about unfair trade, and about the counterfeits and knockoffs but no major enforcement. In 2012 and 2014, the Obama administration signed similar postage deals with Korea, Hong Kong, and the EU. The Germans applauded as it allows them to ship goods to the US for far less than the cost of us shipping to Germany. The US post office loses money on this and makes up for it by charging us more for domestic mail.
The Washington Post praised Obama on these deals claiming that they benefitted US customer and promoted democracy. Of course, the Washington Post is owned by Amazon’s main stock holder, Jeff Bezos– someone who benefits very much by the deal. He is among the relatively few people and organizations that own the media outlets. The Post loses money on newspaper sales but benefits the owners by the propaganda value of the stories, a situation also found with Al Jazeera and the emir of Qatar.
Trump has informed China that these special rates will end when the treaty runs out in January 1, 2021. A per-package ship fee will be $3.00 for a one ounce package, with 11¢ per additional once. This is less than the domestic rate, but far higher than the current 35¢ for 1 oz. I’d probably have raised their postage even more, but this is an election year, and Biden may well reverse any deal Trump signs.
Robert Buxbaum, July 14, 2020. Though I’m appalled by this postage deal, I just bought a 50 lb kayak from China, $99.99 including shipping. The prices are too low to pass up.