Personal Experience – USPS is 2x MORE EXPENSIVE and 44 Days SLOWER than UPS Saver in Shipping to Japan

FINALLY!!!
On 4 December, an amazon market place seller shipped a magazine to me (using USPS airmail). The anticipated delivery time was between 25 and 32 days.

Last week, I wrote to them asked them to track the item as the only tracking information I got on the amazon.com site was that the item had been “received at the facility in Texas” on 4 December.

As it was day 45 since shipment, the seller decided it was best to give me a full refund because the magazine was no longer available for re-shipping.

Today, on day 49, I received the shipment.

I have to say that the customer service representative was right when she wrote, “you will receive the magazine one day.”

I asked her if she wanted to know if and when I ever get the item, and she responded in something that read like “don’t bother, keep the money, go away.” I suspect this happens often because on amazon market place and eBay, merchants are evaluated by the consumers on responsiveness to inquiries, and whether the items were received in the promised time.

Of course, the customer service rep was quick to point out that the delay is not their fault. And as an industry insider, I was happy to accept that. Still…

The magazine was US$8.00. I was charged $12.80 for shipping.

While I believe the yardstick or rule of thumb is that most consumers would accept around 10% of the value of the goods as shipping charge, I opted to pay more for shipping than I did for the publication because it was something I could not get in Japan. When the refund was issued, I got the entire sum back.

The ironic thing is that when I ordered two books, worth $55, from a different merchant on amazon market place, I received it in 5 days and via UPS Saver, and the shipping charge was only $6.88.

I told the CS rep that, and suggested that they look into getting UPS Saver instead of using USPS, and she said,

“UPS is too expensive for yarn and books.” (But I just told her that it is actually CHEAPER!)

There are a couple of things to learn from this:

1) UPS has a ways to go to get merchants to understand that they have a competitive shipping option as their image as an express courier is that they are too expensive for people who ship bulky but light stuff where volumetric pricing makes it prohibitive;

2) USPS needs to get their act together – their slower-than-molasses-in-winter delivery lead times are costing their customers business. In this case, it is obvious that the merchant was penalized for using USPS. Had they used UPS Saver, they would have had a happy customer (me) and kept their money. Now, they lost the customer and the entire taking for the transaction.

And it was “first class mail” – whatever that means in the US these days.

I know it was peak season, but when I sent something to the US via first class mail through Japan Post (an item I returned to amazon.com), I know it took under a week to be delivered as I got my refund in that space of time.

So why does it take 49 days when the item originates from the US? Where do they keep all the “first class mail” for over 45 days?

I am assuming that the delay is within USPS because once an item is handed over to the airline, it takes under 20 hours to get to a mail center in Japan. And Japan Post sorts and delivers within 2 business days. Customs may hold an item for inspection, but books usually come through quickly. So, if one assumes that the airline and Japan Post take a maximum of 5 days, the item was somewhere within USPS for 44 of the 49 days it took to get here…

UPS Saver shipping charge was $6.88 for a $55 purchase of books. It arrived in Japan in 5 days.

Reflecting on Cross-Border E-Commerce in EC vs. China-Japan

Border Bother: How the EU should grow its e-commerce trade | Post & Parcel.

This is an interesting article by GFS Director Stephan Ferguson posted on 11 June 2012 on Post & Parcel,  and his pointing out that the IT discussion is missing from the EC study on what EC is doing right and wrong about cross border e-commerce. This has prompted me to reflect his points on Sino-Japanese cross-border e-commerce elements.

Also interesting in Ferguson’s article were figures quoted like 10% of B2C parcels cross borders (within Europe)  and that each contain goods valued around EUR40 ~ EUR100.

I am keenly waiting for the 2011 survey results from Japan’s Ministry of Economy Trade and Industry on Cross Border E-Commerce, an annual survey they have been conducting since 1998.

The 2010 survey report is readily available online, but last year’s survey results are yet to be published.

While the EC seems to have an Online and Postal Services Unit as well as a Commissioner who is responsible for the Digital Agenda, Japan’s METI has very clear policy objectives to promote cross-border e-commerce ex-Japan.

The 2010 report cites that they see four policy objectives to this end:

1. Responding to the bad reputation our merchants are being labelled with thanks to the Great East Japan Earthquake and the nuclear power plant accident;

2. Enhancing awareness of Japanese e-commerce site abroad;

3. Establishing an appropriate trading environment for cross-border e-commerce based on sound understanding of their purchasing behaviors; and

4. Resolving structural impediments to cross-border e-commerce.

Their immediate future actions for the above are:

With a budget to establish infrastructure of 430 million yen (5.4 million dollars) and  subsidies to better utilize IT etc. for intellecutalizing economies in the Asian region,

a) Creation of an information dissemination site to assist cross-border e-merchants to accurately provide information to consumers abroad;

b) Research on effective marketing methods for cross-border e-commerce; and

c) Establishing cross-border e-commerce related policies and directives through such actions as bilateral discussions with Asian countries.

The 2010 survey indicates that the number of cross-border e-commerce users in China has increased by 15% over the previous year, and total trade value between Japan and China was 96.8 billion yen or 1.2 billion US dollars. METI estimates this to increase to a maximum of approximately 15.8 billion US dollars by 2020.

China has already surpassed the US in value and volume of cross-border e-commerce ex-Japan, and approximately 50% of the 807 Chinese respondents who have never used cross-border e-commerce  said they would like to use cross-border e-commerce if they get the chance. This figure is much higher than the 7.7% for Japan (n=1,622) and 7.3% for the US (n=1,334). And when added with the 8.7% who said they would definitely like to use cross-border e-commerce, that is 58.7% of non-shoppers who have the desire to use cross-border e-commerce.

METI survey indicates the US sells more to China than Japan does, but China has surpassed US as Japan’s largest cross-border e-commerce customer. The trade deficit between Japan and US is evident in cross-border e-commerce as well.

Now that the Japanese Yen and Chinese RMB are being traded directly, transactions between the two nations will probably become smoother and less costly, which may help bring down the relative price of Japanese goods to Chinese consumers.

Perceived barriers for purchase by Japanese consumers shopping cross-border (n=1,622) are:

1. Language (46.3%)

2. Lack of trust in quality of the goods (40.9%)

3. Lack of trust in the merchants (37.1%)

4. Anxiety over transaction security (32.1%)

5. Anxiety over customer inquiries and after-sale complaints handling by the merchant (27.5%)

The same for American consumers (n=1,334) are:

1. Shipping costs are too high (34.8%)

2. Language (31.7%)

3. Lack of trust in the merchants (31.5%)

4. Lack of trust in the quality of the goods (30.5%)

5. Lack of trust in the authenticity of the goods (fakes) (27.9%)

For the Chinese consumers (n=807), they are:

1. Language (61.7%)

2. Shipping costs are too high (45.1%)

3. Duties and Taxes are too high (39.5%)

4. Anxiety over customer inquiries and after-sale complaints handling by the merchant (37.7%)

5. Price of goods are too high (32.6%)

While Ferguson seems to believe that IT is key to solving many of the challenges identified in the EC study to promote cross-border e-commerce, it looks like the same can be said for Sino-Japanese cross-border e-commerce while the complex Chinese duty system and relative purchasing power of Chinese consumers + the strong yen have to also be considered.