Planet money did a pod cast on it. Some guy selling some product could buy a Chinese knockoff of his product (including shipping) for cheaper than it costs him to ship his product from his local post office to his house in the same town. (excluding the cost of the product) Think about that. The product plus shipping across the world is cheaper than shipping across town.
https://www.npr.org/sections/money/2018/08/01/634737852/epis...
Here is the problem. I make a widget. It costs me $10 US to manufacture. I go to the post office, and ship it to an address directly across the street. They charge $7.
I go on AliExpress. I buy a similar widget, and ship it to the same address. The total cost, the item plus shipping, is $6.
Let's break that down. Their cost of manufacturing is lower. Let's say it's free. Ok fine. Trans Pacific shipping is cheap. Let's say it's free. Ok fine. They still have to ship it via the post office from the port in Long Beach to the post office in New Jersey; again, let's say that's free. The post office then has to deliver out across the street.
The post office charges me $7 to walk it it across the street. Why should the Chinese shipper only pay $6 for the same service?
The low-rate consolidators are kinda shameful by only bringing goods to the closest port to the origin, not the destination.
E.g. in Canada, they only bring it to the Vancouver port, while wealthier countries will pre-sort and air it to the closest intl mail port (Toronto, Montreal or Vancouver).
(in the near future if US mail prices go up I may be forced to charge US customers more, I may also have to raise prices to US customers if I find that Trump's sanctions start to apply to small packages and I'm stuck paying from my end)
International freight costs could explain why international shipping is more expensive than domestic shipping, but even if international freight prices are 0, they can't explain why domestic shipping is more expensive than international shipping.
This means cargo carriers have to send back empty containers to China.
As a result, it's cheaper to book a container, from, say, Antwerp to Shanghai than the reverse. The difference can be quite substantial, potentially hundreds of USD per container.
For the other parts of the trip I don't have any hard info but I would think rail and truck is cheaper in China per km when converted to USD.
Where can I verify this? Thats looking at only the direct transport? Or also indirect transport?
Consider a hypothetical container from the US/EU going to Africa (bringing products, second hand goods, "recyclables", ...), then the container could pick up raw minerals and resources going to China, now theres an empty container in China and it has to go back to US/EU?
So the shipping company will have a bunch of empty containers at the port of landing (destination), and needs to send them back to the port of departure to be filled again.
If trade between the two ports is balanced, then the containers will always be full regardless of the port of departure.
But since trade is not balanced, they wind up having to send empty containers on the "return" voyage. Which is pure loss for the shipping company, so they are willing to heavily discount routes that have empty containers transiting.
Which are these routes does change of course, but they are often those originating in the EU / US and arriving in Asia.
Container manufacturing is very automated, so it can be very cheap to do so.
China exports plenty to Africa, no need for such circuitous shipping patterns.
In essence those packets are cheap because some smart person is buying up the empty space in containers that are already going and filling them - I assume that Air-Mail FROM the US could be equally cheap if someone was entrepreneurial enough to do the same there