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Who knew?

Chinese e-traders continue to enjoy unfair advantage

Chinese post box
Chinese post box

British online retailers will have to carry on effectively subsidising Chinese competitors for another two years, warns ParcelHero, after the Universal Postal Union (UPU) failed to address ‘outdated’ cross border delivery charges at September’s Extraordinary Congress in Addis Ababa.

The courier comparison site points out that under UPU rules the postal costs of Chinese traders exporting to the UK and US are subsidised by the UK and US postal services. As a result, it currently costs less to send a book from Beijing to Birmingham by post than it does to send the same item from Bromsgrove to Birmingham.

David Jinks, ParcelHero Head of Customer Research, says this is because the rating system used by the UPU to apportion revenues and cost from international mail up to 2kg is outdated.

He said: “While the UK is classed as having a fully developed postal system and is in Group 1 under the UPU’s arcane ratings systems, China is described as a Group 3 ‘Transitional’ country, along with the likes of Botswana, Kazakhstan and Gabon. So China gets away with paying far less than the Target price most countries pay. But China is now the world’s second largest economy; so clearly this classification needs urgent revision.”

Jinks added: “In the US, where it’s estimated the United States Postal Service is losing $1 on every China Post shipment into the country, President Trump is saying ‘enough is enough’. He is threatening to impose unilateral postal rates on countries such as China if the UPU doesn’t agree new dues at this week’s Congress. While ParcelHero strongly opposes any protectionist extra costs at borders, it is certainly true that UK traders and couriers are at a significant postal price disadvantage. Small wonder China has now gobbled 42% of all global e-commerce.”

Jinks points out that it is not just China that is benefiting from ‘Transitional’ status. The Russian Federation, too, is classed as a Group Three country, which means it is far more expensive for a British seller to ship there than it is for a Russian trader to mail to the UK.

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