An imbalance in China’s advantage

tarifs-livraison-courrier-international-canada(SHERBROOKE) Shipping Rates International Mail in Canada are determined by the Universal Postal Union (UPU), which regulates exchanges between national postal administrations. With its 192 member countries, so the UPU, a United Nations agency headquartered in Switzerland, which determines postal rates between China and Canada.

Rates are set according to the gross national income per capita of each member country and the normal unit cost of a letter in the same country. Basically, the more the country is rich and has a developed postal network, the more the prices are high. On this scale, Canada is one side and China 3. What disadvantage Canadians.

Electro-5 is not the only company to suffer from this imbalance of competition in China’s advantage, which alone is responsible for about 50 percent of global e-commerce, according to UPU.

Swiss traders are among those who are also concerned. These recently denounced in the newspaper company Romande that Swiss Post button to lower pay average costs for delivering small packages from China and that the Chinese and benefit of “distortions of competition”.

“Until the 1960s, the flow of international couriers were balanced. Sent a letter engendered a response. Since imbalances have emerged. So we developed a system for measuring the flow of mail. If a country more sends to another it receives thereof, it should pay him. The system, initially quite simple, is much more complex. It should apply to many different situations; it is therefore possible that imbalances occur. No one imagined for example, a few years ago, about 50% of global e-commerce would come from China, “recently met the Swiss media vice-president of the UPU, Pascal Thierry Clivaz.

When Canada Post delivers parcels from China, it is paid by China Post according to the tariff system of the UPU. Compensation that, as in the case of Swiss Post, would not cover distribution costs.

“Only the UPU Congress, held every four years, may decide to adapt the tariff system,” says vice president of the UPU.

Postal makers around the world will gather to shape the future of global postal sector at the 26th Universal Postal Congress held in Istanbul, Turkey, from 20 September to 7 October 2016.

Will have to see if Canadian merchants will be in a better position after the congress.

The Office of the Minister of Public Services and Supply and Minister responsible for Canada Post, Judy Foote, confirms that Canada Post representatives will attend the 26th Universal Postal Congress in Istanbul.

“Canada joined the Universal Postal Union in 1878 and involved for a long time in the development of EU policies,” said writing the Office of the Minister Foote.

“Canada is working with all members of the UPU in order to modernize the multilateral agreements that govern the exchange of postal items, including arrangements in respect of reciprocal payments by postal operators for these exchanges in the international sector of postal operations. In the context of previous congresses, countries like Canada have introduced or supported proposals to modernize the agreements that reflect the economics of postal services and the need to maintain a viable system of mail internationally ” does adding stating that as a Crown corporation, Canada Post operates independently of government and that the latter does not make comments on operational issues.

“The Government of Canada remains committed to ensuring that Canadians receive quality postal services at a reasonable price. Consistent with this commitment, we launched an independent review of Canada Post. An independent working group has been established and will gather information and prepare a working document that presents viable options with respect to Canada Post services. This work will then be given to a parliamentary committee so that we can begin a public dialogue on this important issue, “concludes the Office of the Minister Foote.

“A new problem, unknown and overshadowed”
“The invasion of Canada by the” made in China “via e-commerce is a new problem, unknown and hidden. The phenomenon affects Canada, but also the other major Western countries, “notes Professor Zhan Su, who holds the Stephen Jarislowsky Chair in International Business Management at Laval University.

Professor Su divided into three main international postal exchange, or the exchange of letters, occasional parcels sent between citizens and commercial parcels.

“For the first two categories, I believe that the criteria used by the Universal Postal Union to define the level of postage for each member country is the least worst solution then I think they should continue to be used. It is normal to adjust the postal cost to living standards and purchasing power of citizens of the planet to a greater number of people have access to the postal service. For the third category related to electronic commerce, I believe we must manage it specifically, also taking into account its size and its consequences, “says Dr. Su.

By cons, Canada being one of the 192 member countries of the Universal Postal Union (UPU) then its influence can be diluted. “When part of a global organization, sometimes you win and sometimes his point is lost,” says the professor of Chinese origin, adding that it is possibly advisable to revise the Chinese postal rates given the recent economic growth of the country which puts the now second in the world in terms of gross domestic product.

“The problem arises when parcels are delivered individually to a Canadian consumer. For when they are large deliveries, eg if a clothing chain buys in China, the commodity is controlled by the Customs Agency on arrival by boat. Same for the anti-dumping office that will be able to do its job, “said Professor Su.

So the record button several components: postage, customs control and respect for intellectual property (when it comes to counterfeit).

“There is food for thought. Now we can not expect that a simple change of government will solve everything. International trade is very important for Canada. We must actively act on these new issues to allow a win-win, not win-lose or lose-lose “, concludes Prof. Su.

Ari Van Assche, Associate Professor in the Department of International Business HEC Montreal, points out that the gap between Canadian and Chinese postal costs could be reduced by increased efficiency at Canada Post. “The OECD (of Economic Cooperation and Development Organization) has set up an index, Services Trade Restrictiveness Index, which measures the efficiency of postal services of different countries and what emerges is that Canada Post many restrictions that make the system less efficient, “he explains, adding that consumers do not base their purchasing decision solely on cost. “The after-sales service, delivery time, the possibility of errors can influence their choices. Canadian companies should capitalize on it, “says Mr. Van Assche conceding that the weight of the item” cost “of a different scale industry to another.

Canada Post and its package
– Canada Post announced a profit before tax of $ 63M in 2015.

– Since 2011, revenues packages rose $ 429m, of which $ 137 million between 2014 and 2015. The service and convenience to shoppers lead to a record number of packages in 2015.

– Revenues for Canada Post parcels increased by 9.1% in 2015 compared to 2014, reaching $ 1.65 billion, Canada Post becoming the largest package delivery company in the country.

– Revenues generated by domestic parcels or the category of the most important product, increased by $ 113 million, or 10.7%, and volumes increased by 16 million items, or 13, 5% compared to 2014.

– The total of these revenues generated by the packages currently represents over 25% of revenue for Canada Post.

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