Earlier quoted context omitted.
That still doesn't explain why it's so cheap. 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. h…
I think it's because they are buying space that otherwise would be empty, and maintain an elastic buffer of packages to fill those spaces as they become available - the outgoing mail containers on planes are likely booked and paid for months in advance so the people paying for them will happily take 20% of their normal rate to fill the rest of them at the last minute
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?