Small Packets, Big Changes

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Small Packets, Big Changes

All of Japan is in one timezone, Japan Standard Time, which, because of Daylight Savings Time, currently runs 13 hours ahead of the US Eastern Time Zone. So when this post goes live, it will already be April Fool’s Day in Japan. I’m sure you’ll be seeing a lot of anime-related art and gags starting to appear. And if all the fun stuff reminded you today that you’d really like a certain anime CD, keychain, or other small goodie only available in Japan, well, if you live in America, you may face a rude surprise at checkout.

The UPU and Terminal Dues

According to its website, the Universal Postal Union “is the second oldest international organization worldwide”, having been established back in 1874. It is a collaboration between participating United Nations members to avoid having to individual mail agreements with every nation that a country wants to send and receive mail and sets terms for postal duties.

When a country receives a small (under 4.4 pounds/2 kilograms) letter or package from another country, the sender’s postal service must pay what is called a terminal due to the receiving post to cover the cost of delivering it.

The current system divides countries into tiers so that developed countries pay more in terminal dues versus developing nations, although the goal is to eventually have everyone paying the same.

But under the UPU, countries don’t pay the same rate to deliver a foreign letter/package as they would a domestic one.

It’s why you see so many items from China for pennies on the dollar with free shipping. This has frustrated many business owners, and there are articles all over comparing the low cost to ship something from China versus within the US.

In one example, a mug manufacturer ordered a knock-off of his product for $5.69 total, but to ship one of his mugs locally would be $6.30 — and again, that covers just shipping.

The United States Postal Service loses millions to deliver foreign letters and packages. In late 2015, USPS explained: “Terminal dues have generally been kept artificially low — below domestic postage rates — because of a complex negotiation process.” But the US itself was also to blame. Around 2010, the United States was experiencing an export boom and didn’t want to raise terminal dues.

Of course, what happened was that the US started importing more (no thanks in part to cheap offerings on eBay, AliExpress, and the like), and things shifted from a triple digit profit to a double digit loss.

The Trade War

As part of the his trade war on China, Trump announced the US would be pulling out of the UPU.

Instead, the US would set its own rates. But because withdrawal would take a year, his administration kept the possibility of a renegotiated treaty. Considering the UN considered a US withdrawal a “nightmare“, the UPU and its members agreed to new terms. This was hailed by Trump officials as a “total victory“.

Starting in 2021 and until 2025, rates have and will rise:

“The maximum annual increases for all countries cumulatively from 2020 to 2025 will be between 119%-164% (with China being on the upper end). This works out to annual increases of 15% in 2021 and 2022, 16% in 2023 and 2024, and 17% in 2025.”

Also, places that receive more than 75,000 tons could self-declare their own terminal dues of 70% the domestic rate and could increase 1% a year to a max of 80% in 10 years .

The only country to receive more than 75,000 tons? The US. The head US trade official denied that America’s new contribution of $40 million a year to the UPU was essentially a bribe for this provision.

The USPS hiked rates in July 2020. Also since summer 2020, with the appointment of Louis DeJoy as USPS’ postmaster, the USPS has been under fire for late deliveries and increased roadblocks for customers and employees alike. His recent plan would raise rates, increase shipping time for First Class mail, and reduced post office hours.

That’s a whole other bucket of worms, but it was worth a reminder amidst the international changes.

Japan Post’s New Rates

Anyway, under the UPU deal, other countries could start increasing their international mail service rates in 2021.

Back in November, Japan Post announced they would be revising their international postal rates for small mail. But it wasn’t until March 2021 that the new prices were revealed.

The biggest change is now Japan Post classifies the US and its territories as a separate, independent zone (Zone 4):

The new rates are available on the Japan Post website, but ZenMarket provides a sample of the new rates to the US:

Japan Post Small Packet New PricesFrom ZenMarket

For Air and Small Packets, the US becomes the most expensive country to ship to from Japan. For International ePacket, Zone 3 (Africa and South America) overtakes the US at 700 grams, and for ePacket Light, they become the most expensive around 1,400 grams. Letters and postcards are the same for Zone 4 as Zone 2 (Oceania, Canada, Europe, etc.).

Either way, it’s a significant increase. Japan Post explains the reasoning for the US to be separate from, say, Canada:

“Because the delivery charges of the United States will increase much more than those of other countries. Therefore, we will separate the postage rates for items to the U.S. from the current Zone 2 and define Zone 4 as a new postage rate zone. In addition, the U.S.’s external territories such as Guam and Saipan will have the same delivery charges so these territories will be integrated into Zone 4.”

So even though Guam is a lot closer to Japan than, say, New York, both areas are charged the same rate by Japan Post. Also, no handwritten labels are allowed now on a package sent to the US.

A Win or a Loss?

As Vox put it back when discussing Trump pulling out of the UPU: “But the US’s problem here isn’t really with the UPU. It’s with China.”

Is it unfair that China and others can or could send things for pennies on the dollar versus an American sending something to another American? Yeah. Especially for small businesses who already struggle with free shipping offers from Amazon and other big corporations. But successes in regard to China also came at a price — namely, hikes with other countries like Japan.

Companies like FedEx and UPS may benefit since they think they can compete better with government postal rates.

And I can seriously see why. As a comparison, as of March 24th, the cost of sending two of the exact same CDs to me in the US at CDJapan is 1,270 yen. At Amazon Japan, it’s 1,538 yen. So yeah, CDJapan is cheaper, but that’s also because that’s through uninsured, untrackable Airmail. Want some tracking and insurance like Amazon Japan comes with by default, and the cost jumps to 1,680 yen.

So a couple hundred yen here and there for Japan Post really narrows the gap to with some other shipping services — or, at least, other shipping services’ deals with businesses that can flex their muscle to get better rates. Like in my last Amazon Japan order, I ordered 3 small blind box packs, with two shipped out. Price breakdown according to my receipt is 4,968 yen for boxes plus 1,459 yen for shipping for a cost of about $58 US (DHL). Even say $64 using the easy $1 = 100 yen conversion. Well, despite being a guaranteed all types pack, one came with a duplicate, so I’m returning for a replacement. I have to pay for return shipping and get reimbursed through Amazon Japan. You know how much DHL quoted me to return that one box? $88. Insane difference.

But these changes affect packages 4.4 lbs or less (2,000 grams) though postal services. So if there’s something you’ve been wanting from Japan like a rare figure or a special edition manga, unfortunately, it’s too late right now to take advantage of the old rates. But I highly recommend checking multiple outlets to compare shipping costs, and if it’s something rather common, consider waiting until you have more you want to import so you can alleviate some of the shipping charges. Of course when buying something online the initial shipping cost for one item is higher than if you add more, but that difference is even more now. I mean, for many light items, the US is now more expensive than anywhere else in the world! Ouch!!

Obviously these shipping changes are not just limited to Japan, as getting ahold of any foreign goods is going to go up significantly over the next few years. But considering all the rare and awesome goodies available in the homeland of anime, it’s going to be even more costly to acquire them. But hopefully, with Japan Post posting the new rates for services like SAL, that means some of the COVID-19 shipping restrictions will be loosened soon. This has also prevented many anime fans from ordering what they want, and it’s too bad no one could use these cheaper services to get one last order in before the new rates went into effect.

Have you imported anything from Japan recently? What do you think of the UPU and/or the new terminal dues deal? Do you often rely on inexpensive items shipping from China, or have you been struggling as a seller to compete with cheaper Chinese options?
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