Due to greatly increased interest in finding parcel solutions from Asia to the USA, we have decided to repost this blog article with the commonly downloaded graphic that helps explain the low cost parcel post costs from China to the USA.
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While we develop alternative methods with greater quality and control, the cheapest option for most Asian shippers is via the postal stream direct from China - and other Asian countries.
- New US regulations make it easier to import parcels into the USA
- But... the most effective methods require an additional cost of express clearance. Note: More "parcel clearance" options are becoming available.
- While the USPS is expected to increase pricing*, parcel post from direct from Asia will likely remain as the lowest cost option for the foreseeable future.
The United States Postal Service (USPS) supports amendments being considered to the terminal dues structure at the upcoming 26th Universal Postal Union (UPU) Congress. The USPS claims to have lost over $90 million on "Inbound Letter Post" parcels in FY 2015.
The proposed new structure breaks apart the calculation of terminal dues for letters and flats from the calculation of terminal dues for packets
In working with many companies on their cross border high volume parcel flows, we are often asked for the lowest cost e-commerce delivery solution for companies sending to the USA.
Our answer is simple:
- The lowest cost delivery for parcels under 2 kg is via China Post
- The best China Post option is ePacket Service
Contact Jet for a quote for a parcel from China to Canada or USA
How can sending from China be so cheap?
The United States Postal Service (USPS) charges to China Post are defined under United Postal Union rules.
With its 192 member countries, the UPU is the primary forum for cooperation between postal sector players. The mantra of the UPU includes a mission to ensure universal service everywhere within a domestic postal network.
The rates between postal authorities are commonly referred to as “terminal dues.” In general, developing countries - referred to “transitional countries” pay lower terminal dues.
UPU “terminal dues” apply only to letters. However, the definition of letters include “bulky letters” or packets which is the category used by the majority of Asian e-commerce merchants.
The UPU estimates that 80% of “mail items” generated by e-commerce weight less than 2 kg and are processed in letterpost streams. Countries designated by the UPU as “transitional countries” enjoy disproportionately low terminal fees. *Despite China’s economic success, it is still designated as a transitional country.
Low cost postal pricing continues to be a cause for controversy:
The delivery rate charged to transitional countries is often often below cost of the destination postal authority(see graphic above).
BUT... low cost postal pricing continues to help grow postal volumes:
- The large infrastructure left bare by dwindled mail volumes has found a new purpose in delivering small parcels
- The financial struggles of postal authorities would have been insurmountable with out the benefit of e-commerce parcels.
The USPS ePacket... cost a little bit more but with tracking
Being bound by the UPU rules related to “mail / small packets”, the USPS developed a ePacket which provides tracking and better service but at a higher rate than the preferential terminal fee. Although the ePacket is outside the jurisdiction of UPS rules, the ultimate price negotiated was influenced by thepreferentialUPU preferential terminal fees.
The USPS refuses to disclose their ePacket pricing claiming it is "commercially sensitive" information.
Countries that have ePacket agreements with USPS include China, Hong Kong and Korea Post.
Merchants selecting the ePacket through Hong Kong Post are able to ship small packages weighing up to two kilograms (4.4 pounds) using co-branded shipping labels. Upon arrival in the United States, these packages receive First-Class Mail service with Delivery Confirmation service.
ePacket, e-Bay and Amazon
Amazon's rival, eBay, is benefiting tremendously from ePacket deals. Cross border trade is extremely lucrative for eBay and its (former) payment processing subsidiary PayPal. In fact, eBay has struck trilateral deals with the USPS and postal services in Asian countries including China, Hong Kong, and Singapore.
Nearly half of eBay sellers in China are using the ePacket service to ship to the U.S., with over 80% of items delivered in five to 10 days. The service offers up to a 50% discount compared with comparable services.
Amazon, has been a vocal critic of the low cost ePacket service as it has affected their US based re sellers.
Conclusion
ePacket will continue to definelow cost e-commerce shipping from Asia but significant cost increases have already been announced and more are expected. E-commerce merchants should develop alternative parcel flows that include the integrators and direct injection into high volume target countries.
Jet Worldwide’s recommendations for high volume parcel flows from Asia to the USA:
- Continue to take advantage of the ePacket pricing from the USPS for low weight parcels.
- Develop alternative high volume parcel flows into the USA for direct injection for heavier parcels and to protect against clearance and service delays of high volume postal networks.
Jet Worldwide offers express international delivery solutions to France from Montréal, Canada. For freight forwarding and shipping to China in only a few days, Jet is your courier option! Parcel Delivery to China from Montreal, Toronto, Ottawa, anywhere in Canada! Jet can provide air international delivery in China from Canada and from China to Canada. Jet's team offers great customer service when shipping to and from China.
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