Chinese Retailer are being offered hugely subsidised postal services known as “Terminal Dues” by the United Nation’s Universal Postal Union (UPU) allowing them to sell goods including postage from China to the UK for less than the stamp would cost a UK retailer to send the same item from the UK to the same customer.

United Nations UPU class China, the second biggest economy in the world, as a Category 3 Economy along side Gabon. This entitles Chinese online retailers huge international postal discounts. Packages can be sent to the UK for less than a penny. And it’s the UK mail service and the cost of our stamps that picks up the tab.

Amazon and eBay have made it extremely easy for Chinese Retailers to sell directly to UK consumers on their platforms. Chinese Retailers can now offer 7 day delivery times from China. Chinese retailers now account for 25% of all the retailers on these platforms. They are now taking the lion share of sales, undercutting UK retailers by as much as 90%. British retailers don’t stand a chance.

In 2013 Chinese online sales reached $314 billion, or 35 percent of all world e-commerce sales (by comparison, U.S. online sales were $255 billion). Senator Bill Cassidy recently moved to close UN Terminal Dues subsided post system that helps Chinese Sellers undercut USA Sellers on amazon.com costing the US Mail service $135 million in 2016.

The $1 per Kilo Bulk Rate Loophole

The United National UPU subsidises allows Chinese Retailers to mail goods in bulk on a per kilo rate and not a per items rate that UK Retailer are charged. Chinese are currently being charged from $1 per kg for bulk post from China to USA.

A small letter with small earrings in weighs around 5 grams. This mean 200 letters with earrings in will cost just $1 or $0.005 per item for a Chinese Retailer to send from China. It would cost a UK Retailer £0.58 per letter or £116.00 for all 200 items to send them within the UK.

When the Chinese packaging enters the UK mail system it is handled by Royal Mail like any other UK package and it is costing the UK Postal Service tens of £millions each year, which translates into higher stamp costs for U.K consumers.

This not only disadvantages UK retailers in their competition with Chinese Retailers, it costs the U.K government millions of pounds in lost customs revenue.

United Nations UPU subsides Killing British online and high street retailers

UK Retailers simply can’t compete with Chinese Retailers selling like for like products at a faction of the cost they can sell them. It’s putting us out of business and the government is completely obliviously to the damage the United Nations UPU Royal Mail subsides are having with British online and high street retailers.

The government needs to wake up to what is going on and the harm it is causing our country. This out-dated United Nation’s Universal Postal Union (UPU) “Terminal Dues” policy which subsidises mail from China – the worlds second largest economy – needs to be stopped urgently by the UK government.

Questions the UK government needs to consider:

1) Does subsidised Chinese Post distort the market and put UK retailers out of business?

2) Does distant selling into UK using LVCR so no VAT and Duty is paid distort the market and put UK retailers out of business?

3) Why are we funding & helping Chinese Online retailer to put UK retailers out of business?

5) How much are Chinese Retailers being charge by United Nations UPU per kilo to mail letters & goods from China to UK?

Example Products:

Below are examples of products on Amazon UK dispatched from China by Chinese sellers who take advantage of United Nations Universal Postal Union terminal dues subsidised post. All items are also sold VAT & Duty Free as they are exempted by LVCR – Low Value Consignment Relief.

1) Pack of 12 Plain White Unbranded Table Tennis balls only 0.32p including delivery from China. Cost of stamp for UK seller to send from UK is £2.85. Tennis anyone?

2) Makeup Brush only £0.11 including delivery from China. No 1 best seller on Amazon UK. Cost of stamp for UK seller to send from UK is 79p. That’s got to raise a few eyebrows with UK retailers!!

3) Union Jack Flag – only £1.19 including delivery from China. Number 1 best seller on Amazon. Cost of stamp for UK seller to send from UK is £1.26. Rule Britannia!!

4) Poop Scoop – only £0.23 including delivery from China. Cost of stamp for UK seller to send from UK is £2.85. UK Retailers are going to need a lot of these to get them out of the hole the UN has created them.

5) Travel Plug – only £0.97 including delivery from China. Cost of stamp for UK seller to send from UK is £2.85. EU Safety Standards not included.

6) Sterling Silver Amethyst Purple Heart Crystal Pendant Necklace – only 15p including delivery from China. Cost of stamp for UK seller to send from UK is 79p. A nice present for your loved one. Can’t go wrong here.

References:

1) Universal Postal Union (UPU):

http://www.upu.int/en.html

2) In 2012, terminal dues for transit from China to the USA was 0.635 SDR/kg, or about 1 USD/kg.

https://en.wikipedia.org/wiki/Universal_Postal_Union

3) The Times: Chinese retailers are being secretly subsidised by British consumers to send millions of cheap online products around the UK for a fraction of the cost of a postage stamp.

https://www.thetimes.co.uk/article/taxpayers-subsidise-chinese-retailers-tbxq3mlmb

4) Daily Mail: British retailers are furious as Chinese firms ‘use loophole to let them ship goods within the UK for fraction of the cost of a postage stamp’

http://www.dailymail.co.uk/news/article-5641459/UK-retailers-furious-Chinese-firms-use-loophole-let-ship-cheap-goods-UK.html

5) Senator Bill Cassidy moves to close UN Terminal Dues subsided post system that helps Chinese Sellers undercut USA Sellers on http://www.amazon.com & cost the US Mail service $135 million in 2016

https://www.cnbc.com/2018/04/10/senator-bill-cassidy-ending-needless-delivery-subsidies-bill.html

6) Canada Post phasing out controversial shipping discount for Chinese goods

https://www.theglobeandmail.com/report-on-business/canada-post-phasing-out-controversial-shipping-discount-for-chinese-goods/article36883687/

7) Swedish Post introduce handling fees & VAT on goods posted from (China) third countries from 1st March 2018

https://www.postnord.com/en/media/press-releases/postnord/2018/new-fee-to-be-levied-on-consignments-from-third-countries-from-march-1/

8) As U.S. Postage Rates Continue To Rise, The USPS Gives The Chinese A ‘Free Ride’

“https://www.forbes.com/sites/wadeshepard/2017/11/05/how-the-usps-epacket-gives-postal-subsidies-to-chinese-e-commerce-merchants-to-ship-to-the-usa-cheap

9) Crisis in The Mail: Fixing A Broken International Package System – Analysis:

http://www.eurasiareview.com/03032017-crisis-in-the-mail-fixing-a-broken-international-package-system-analysis/

10) Stop Subsidising Foreign Postal Systems, for Economic Fairness and National Security:

http://www.nationalreview.com/article/439532/us-postal-service-subsidizes-china-other-countries-it-shouldnt

11) The United Nations is helping subsidise Chinese shipping. Here’s how:

http://fortune.com/2015/03/11/united-nations-subsidy-chinese-shipping/

12) U.S. Government Accountability – Information on Changes and Alternatives to the Terminal Dues System

https://www.gao.gov/products/GAO-18-112

13) 25% of European Amazon marketplace sellers are based in China

https://ecommercenews.eu/25-european-amazon-marketplace-sellers-based-china/

13) Royal Mail 2nd Class Stamp Prices

https://www.royalmail.com/personal/uk-delivery/2nd-class-mail

14) Royal Mail 1st Class Stamp Prices

https://www.royalmail.com/personal/uk-delivery/1st-class-mail