The United States Will Withdraw From The Universal Postal Union A Month Later. What Is The Impact Of Textile And Clothing Trade?

The US withdrawal from the Universal Postal Union will be completed next month. It is understood that at present, the United States expects the Universal Postal Union to develop new terminal rates, and allows the US Post Office (USPS) to set up its own small package and large mail incoming remittance rates.

In response to this request, from 24 to 25 this month, the member states of the Universal Postal Union will hold a special meeting in Geneva, Switzerland, and vote. If the United States wins this vote, the US Post Office will withdraw its application, otherwise it will withdraw from the universal postal service in October 17th.

In fact, as early as October 17, 2018, the Trump administration announced that the United States started the process of withdrawing from the Universal Postal Union, and indicated that if the new agreement was not reached with the latter in the next year, the United States would formally withdraw.

With the rise of e-commerce, especially after the growing prosperity of cross-border electricity providers, a large number of consumer goods such as textiles and garments are shipped from developing countries to the United States and other developed countries in the form of postal packets. This has led to the opposition of domestic businesses in the United States to this kind of subsidy.

With black five and Christmas approaching, many small and medium-sized export enterprises in the domestic textile industry are actively preparing for the peak sales season, while the other side is worried about the future. because This year's textile environment is generally not good. If the United States withdraws from the Universal Postal Union, what impact will it have on the textile and garment industry? How should domestic sellers respond?

Some experts predict that for the Chinese cross-border e-commerce sellers who have built their own overseas warehouses and third party logistics companies, the price increase may not be too great. But for those small and medium-sized sellers who use postal delivery, the impact of logistics cost increase is not small.

At present, many cross-border online shopping apparel products in the sending link will use transnational postal business, this part of the express business is mainly from the use of cross-border e-commerce platform for small and medium business and manufacturers. These enterprises generally sell scattered, no overseas warehouses, usually exit by international postal packets, and postal packets can directly go through express delivery channels without customs declaration.

Statistics show that the withdrawal of the United States from the Universal Postal Union will result in the loss of 40% to 70% postage fees for such small and medium-sized electronic suppliers and manufacturers using the international postal packet. The proportion of logistics cost to the total cost of each transaction may increase to 40% or even higher, which will cause a greater blow to it.

The increase in costs will be passed on to consumers, which will inevitably inhibit consumption, and the weakening of terminal demand will also transmit upstream, which will make the textile industry less prosperous.

A head of a small manufacturing company based on shoes and caps from Ningbo said that about half of the cross-border exports of goods were sent by post international packet. If the United States really "retired", the export business of enterprises will be directly impacted. He said that there are mainly two ways to send goods to the United States, one is through postal mail, and the other is to send containers to the overseas warehouse of the Amazon, so that customers can receive goods as soon as possible. He thinks that the way of sending containers is also a trend of development in the future.

It is understood that most of the goods sold by cross-border electric providers are products with fierce competition in the market such as clothing, shoes, bags, cosmetics and so on. In order to attract customers, the postage of goods is usually borne by the seller. A seller who has been engaged in multi-national clothing sales in Guangdong all year round says that although the international postal system has long transportation time, the transport cost is low. For small amount of goods, the increase in postage will increase the logistics cost of sellers, and the profits of sellers will be significantly reduced. He believes that if the United States withdraws from the Universal Postal Union, it depends on the pricing power of domestic small and medium-sized sellers, which will further test the overall competitiveness and operational skills of the sellers. However, this part of the increase in logistics costs will also be passed on to consumers. "Our profit itself is not high. If the logistics cost is increased, it will also be reflected in the price of goods, which is shared by the local consumers of the United States." The seller said.

"Quanzhou's dominant products, footwear and apparel exports to the US and EU markets annually account for more than half of the total exports. Post is an important way of logistics. The impact of the US withdrawal from the Universal Postal Union on local cross-border electricity providers is enormous. On the whole, the impact on the low unit price is especially large, and the freight ratio will increase significantly in the whole cost structure. Fujian Quanzhou cross border electricity supplier association responsible person said.

"Now that we have shipped through overseas warehouses, the proportion of shipments is almost small." A head of international business at Gaomi textile company in Shandong said that in 2012, the company set up overseas warehouses directly in the United States, and the goods were sent to overseas stores via sea freight and sent to the consumers through the US express. Even if the US really "retire", the company's business will not have a particularly big impact. He said that in the future, enterprises will transform to produce high-tech products. Although the energy invested in the early stage is more, the profit will increase and accumulate more competitive advantages as time goes on.

epilogue

However, the US's "retreat group" is not good news for the cross-border e-commerce providers (especially the low passenger unit price) delivered by the universal postal union system, especially if all countries follow suit the United States to withdraw from the Universal Postal Union and set their own rates, it will also increase the cost of enterprises and consumers who purchase goods from China.