Is shipping(and sourcing) from China about to get a lot more expensive?
In short, it already has. And it’s only going to increase. In 2019 President Trump mentioned plans to withdraw from the Universal Postal Treaty. Under the treaty, the U.S. subsidizes international shipping for small parcels sent from China to the U.S. If you’re a U.S. taxpayer, did you realize you’ve been helping pay for all those small e-commerce shipments (less than 4.4lbs) from China to the US?
This has made it cheap for Chinese manufacturers to ship directly to U.S. consumers. But American manufacturers don’t receive the same benefits. And many believe this discrepancy gives Chinese sellers an unfair advantage over their American counterparts.
Chinese companies now make up about 60% of packages shipped into the U.S. And many websites offer free shipping from China due to the low rates. Many experts see this as an attempt to pressure China and negotiate better terms rather than an actual attempt to leave the treaty. As of July 1, 2020, things are changing. And in January of 2021, some countries will be able to set new prices. Either way, you can expect those cheap prices from China to skyrocket with over a 100% increase. How are you planning for these future changes?
Veritas Sourcing is helping clients from around the world diversify their operational risk by providing alternate destinations for low-cost sourcing and manufacturing. Get in touch with us to learn more.
