Postage costs

[Ric]

Blimey, when did postal costs to overseas go up?

Admitedly I don't send much stuff overseas so I got a shock when I posted a parcel to my uncle in Italy the other day.

The parcel was a tough bag containing a calendar, photo's and some local newspapers, the total weight was approx 650gm. The total value was around $15.

For this I had to show Id, fill out a couple of pages of customs declarations and hand over $39 to send by airmail. :eyepop:

I'm going to stop having these Rip Van Winkle moments. :D

[multiweb]

I send some stuff to my cousins in France and clocked up $80.00 in fees. Yeah it's not cheap.

[Astro_Bot]

And yet: I can get a parcel from the USA for $12 postage; someone in the UK can send a smallish parcel here for around GBP2.50; and, from China they can send a small parcel for so low they give free postage on a $2 item.

I figure we must be subsidising the rest of the world on postage costs.


(OK, so the examples you give were for bigger parcels, but don't let the facts get in the way of a good old fashioned rant .... and we're still overcharged on a world scale, anyway).

[JB80]

And in Europe the recipient also stands a good chance of having to pay VAT and customs handling fees when they receive the parcel depending on whats in it.

[PCH]

That's an interesting point.

I assume that all countries have some sort of agreement that when you post a letter to an overseas destination, presumably the country of origin gets all the money from the 'stamp', and the recipient country is obliged to receive and deliver the letter or parcel as 'part of the service'.

Unless they somehow divi up the 'stamp' money, but I doubt that happens.

So if it works as I said up above, then you can easily see that all of us who order things from China at almost zero postage costs, are literally clogging up the Aussie postal system, and they're getting absolutely no money in return for their part in this service.

I don't know for sure that it does work like that, but even if the postage is divi'd up, how much is the Aussie share of the postage from a '$2 landed' item?

Seems to me the Chinese must be clogging up every nations' postal system with this method. Except perhaps the Italians - their system seems to involve chucking every alternate post bag in the nearest river - lol

Just my thoughts. Can anyone throw any light on how this works?

[gary]

Seasons Greetings Ric,

You would be well excused for missing it. They went up twice this year alone.

First in April, which was relatively well publicized. This also included service and
postal charge changes for domestic post.

And then again, arguably less well publicized, on 7th October which affected only
"Registered Post and selected domestic and international products and services".

Because we ship to destinations around the world, I am in the post office daily.
On those sojourns rarely does anything escape my attention.

But even I was caught short with the international price increases on 7th October
and this was from a guy that even authored a piece of software that we use to
compute shipping prices which fetches pricing data via the Australia Post API.

The background of the story behind why our internal post charges are so high
is even more interesting.

Back in 2011, there was a Productivity Commission Inquiry into the performance
of the retail industry.

One of the submissions made was by Australia Post, which was telling.
Interested readers can find it here -
http://www.pc.gov.au/__data/assets/pdf_file/0003/110847/sub120.pdf

As letters and parcels flow around the world from country to country, the
payment arrangements between countries is complex.

These arrangements are governed by treaties between the Universal Post Union
(UPU) member countries.

When one goes back in time to the early days of the Colony, the arrangements were
somewhat simpler. For example, when someone in England wrote a letter to say
a relative in Ballarat, Australia, Royal Mail would put into the Royal coffers the
entire profit of the postage stamp affixed. This was despite the fact that when
the ship arrived in Melbourne that a Cobb & Co coach may well have transported it
to Ballarat and the local Ballarat postman would deliver it in the heat of a summer's
day on his bicycle.

This arrangement at first glance may not have seemed fair. For example, who
was to pay for the watering of the stagecoach horses or the Ballarat postie?

However the theory went in those days that if a relative in England wrote you a
letter, chances are you would write one back in response. In which case, the
profit from the postage stamp affixed would remain in the Colony.

But the world became a more complex place. Some countries were poorer than
others and as letters and trade begun to flourish around the world, this could
result in a net imbalance in the total tonnage of mail going into and out of
some countries.

The members of the UPU got together and devised a set of treaties where countries
would exchange payments between each other in the handling of post based on
their respective import and export tonnages to each other.

Some countries were given more favorable rates, that is subsidized, as they were
deemed to be developing.

As Australia Post wrote in their Production Commission submission -


They then went onto say -


Now in the financial year 2012/2013 Australia Post posted an after tax profit
of $312 million.

This is despite the fact that they stated to the Commission they were losing A$1.06
per inbound package with a weight less than 2kg.

So obviously other parts of the Australia Post postal division are subsidizing at least
some of the parcels coming into the country. One could speculate that whenever
Australian individuals or businesses are shipping overseas they are unfairly
subsidizing many of the parcels that are being imported into the country.

In their submission, Australia Post stated that -


I bolded a key sentence above and I can provide some personal anecdotes of
which I will provide one example.

This year I wanted to buy a single coaxial connector for a piece of test equipment.
I found I could order one online out of the city of Shenzen in China for a total
price of 2.99 including "free airmail postage".

The weight of the item was 0.049kg and due to it being just shy of than 2cm thick would have
been deemed here by Australia Post as to what they technically call a "large letter".

The equivalent Airmail rate for posting the package in the reverse direction, that
is Australia to China. would have been AUD1.85.

The package was delivered to my letter box by the local Australia Post postman
riding his motorbike. It has passed through Australian Customs, Quarantine,
sorted at depots here and moved across Sydney on one or more postal trucks.

Yet the China Post franking machine imprint was for a total of Y0.00.

If this had been a one off anomaly, I would have dismissed it but I have
received other packages for small items out of China again franked Y0.00.

A scanned image of the postal frank and Customs Declaration appears below.

I enjoy my daily visit to my local post office. We interact on a first name
basis and during my stay whilst the parcels are being processed we will
often chat about the weather, the news or personal family anecdotes.

Not so long ago, I showed some of the Chinese padded envelopes to my post
master and pointing to the Y0.00 postage on them, smiled and asked "Could you
do the same for me?".

To call for such a favour, we both concluded we would probably need friends
higher up the ladder. The friendly co-operation of the general manager of
Australia Post perhaps, or the Minister responsible or the entire Australian
Government itself.

It certainly would require more influence than a smile and an exchange of a few
pleasantries for the favour.

So how is it possible that the Chinese can do it?

is it through the miracle of the Chinese industrial boom and the wonders of cheap
labour?

Or does it require what might euphemistically be called "a subsidy" but is
in fact nothing but more than dumping?

What Australia Post referred to when they wrote -
"It is therefore unknown whether subsidies are involved or whether there is a longer
term strategy by these players to provide parcel services at a loss in order to
grow market share."

Those who subscribe to Commie conspiracies might suspect that the Chinese
government is assisting with the dumping of Chinese goods to ensure that the
West never thinks about manufacturing anything ever again. Paradoxically enough,
those who subscribe to Capitalist conspiracies when presented with the same evidence
might suspect exactly the same.

There might be other conspiracy theorists who maintain the imbalance for
postal charges is to simply help pay for the Australia Post CEO's salary
which has been published as being $4.8 million per year. Not bad for an
organization that being over 200 years old that he never founded, never grew
in most of that time, which belongs to all Australians and I suspect nearly most
people have an opinion on how to run it better and many possibly could at
a fraction of that renumeration.

So there is a little more in the above to Ric's simple question about "when did
the international postal rates go up" but it is fascinating what you uncover
when you start pulling at that thread as to why.

Best regards

Gary Kopff
Mt Kuring-Gai NSW 2080

[Ric]

Great post Gary

Quite an insight into Oz post.

[ozjoe]

yeah they will be charged iva + 15 euros for customs to release the parcel.....

[Camelopardalis]

An interesting read for sure :)

CEO salaries aside, Australia post must be confronted with somewhat unique or at least unusual conditions and/or expectations. The country is very large and while a large proportion of the population are concentrated into a small number of splodges, I'm assuming (innocently) that as national carrier they are obliged to service every Australian address regardless of how remote. This in itself is not insignificant, at least in my perception. Then there are the relatively high labour costs here. And the developed world expectations of a prompt delivery service.

When I recently sent my brother nearer the other pole a seasonal greeting, it cost $2.80 for airmail, about 50% more than I know it cost him to send me one. But it arrived on the 3rd day after posting and the same for his arriving here. I hope at least that some of that money I willingly paid is going towards sending a similar greeting to someone in a far flung corner of this country that appreciate the thought as much as I do.

Apologies for the seasonal sentimentality :thanx:

[JB80]

This seems about right in all honesty, very similar to the Spanish system and if the bag does escape the river then you have to deal with delivery companies who just hold on to the bag for a few days, say they tried to deliver it and then send it back.

Seriously we are missing a number of presents this year because of these lazy liars.

[TrevorW]

It still amazes me that I can get a parcel from the UK quicker than I can from Sydney :)

[raymo]

Postal system performances vary hugely from item to item. For example,
it took 6 days for a small parcel to get from my daughter's place to
mine [167 klm by road]. I posted a parcel at 1.30 pm on a Sunday in my
Perth suburb's postal agency, and it was delivered in Norwich U.K. on
the following Tuesday. 46 hrs. door to door; how's that for service; might
be some sort of record.
raymo

[midnight]

So so true. Just received a parcel from the USA dispatched on 17th December (18th here) but my Telstra bill arrived today too but date of issue 4 December 2013:question: with a pay by date of 11 December (yet another late fee to contend with!:mad2:). Anything coming from the East is taking nearly 1.5 to 2 weeks at the moment.

This is a common problem for us here in the West.

D...

[astroron]

I usually get parcel's quicker from England and the USA than from Perth WA.,at least a week from Perth is the norm. :mad2:
Cheers:thumbsup:

[Wavytone]

Last year I posted an airmail letter to Washington DC and received a reply - by airmail - on the following Friday - 5 days. I was quite surprised.

Perth... Yes a week one way, at least for small parcels.

[stephenb]

Thank you Gary for that excellent information.

I have noticed that there must have been some restructuring with USPS within the last 12 months? Postage/shipping charges from nearly all eBay seller has gone through the roof. Some charging 38-45 for the smallest item. I think there might be some laziness on the seller's behalf also and only choosing the easiest option.

[Ric]

I heard on the radio this morning that Oz post are going to apply to put the price of stamps up again next year some time.

I think they are asking for a large increase this time.

[TrevorW]

Lucky I don't use snail mail often :)

[Shark Bait]

I wonder if Aust Post are using the same logic as the water suppliers.

People are using less of our service or product and the profit margins are slipping. Lets up the unit price and increase our bonuses at the same time for being so good at our jobs.

But i'm not bitter. ;)

[gliderdog]

http://www.propertyobserver.com.au/news/no-official-change-of-address-yet-as-postmaster-ahmed-fahour-still-to-find-$7-million-plus-kew-buyer/2013092664870

http://www.crikey.com.au/2013/10/23/is-auspost-boss-4-8-million-salary-pushing-the-envelope/

"It's whispered Ahmed and Dionnie Fahour are the mystery buyers behind the $22 million sale of Invergowrie, the historic bluestone home in Hawthorn.."

[gary]

As the late John Kenneth Galbraith (http://en.wikipedia.org/wiki/John_Kenneth_Galbraith), a Canadian born economist who served for the Roosevelt, Truman, Kennedy and Johnson administrations once quipped -