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back to article 'Australia's so big freight costs are high' claims don't add up

One of the fallback positions of IT vendors defending their high Australian prices has been to remind Australia that shipping and transport are expensive here. So, ever your servant – and confronted with the kind of slow-news-day syndrome that can happen only when America is still busy trying to identify which stories were April …

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Trollface

> you have The Register's permission to laugh at them.

and laugh I do, as I order from Germany or HK with shipping which costs less than getting it sent from across the other side of Melbourne.

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Of course shipping electrons is way expensive too.....

....as reflected in the significantly higher prices down under for electronically delivered software products.

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WTF?

Re: Of course shipping electrons is way expensive too.....

Apparantly they can manage price parity between US and UK. The other excuse often tabled is that wages are higher in Australia so they charge "what the market will bare"

Microsoft Technet subscription.....

Technet pro download only for Australia:

New sub - $618 AUD

Renewal - $437 AUD

UK

New sub - £234.21 GBP = $338.85 AUD

Renewal - £167.10 GBP = $241.76 AUD

US

New sub - $349 USD = $333.45 AUD

Renewal - $249 USD = $237.91 AUD

At least with physical product i can purchase from overseas!

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Re: Of course shipping electrons is way expensive too.....

I was going to get myself a technet subscription to give me ease access to all those ISOs that I frequently need because client machines aren't supplied with them... the US price was acceptable, but then the AU price just made my go look for some alternative sources for legally licenced goods :(

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Anonymous Coward

Missing Cost!

You're missing the cost involved in stopping at the equator, unpacking all of the containers, and re-packing them upside-down (or the right way up, to you guys). That's a big job! :o)

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bep

Meanwhile

What are all these 'cubic meters' measuring?

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Coat

Re: Meanwhile

Braques? Or Picassos maybe?

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Re: Meanwhile

Simpson 260's. 270's if you're a big spender.

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Reminds me of a Chinese takeaway in Brentford that tried to charge me £1 to cover merchant card fees on a £10 transaction. Because their own 1000% margin on boiled rice wouldn't cover it.

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Meh

bullshit claim is bullshit

yep, couldn't agree more on this one.

but it's not only the big guys who claim this too, it's bricks and motar stores as well.

wouldn't surprise me if a lot of these big companies had shares or owned logistic chains etc /cynical.

which is why i will alway take a gamble with ebay first on almost all software. and it is a gamble but there are things you do to migtigate it. i've gotten product at much fairer prices from folk who have purchased the wrong poduct or sellers that have a much more competitve price point than legitimate vendors and resellers.

and let's not forget how expensive downloads are too...

i, wonder why piracy exists at all ...

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It's simple...

...if a company tries to justify the difference in cost by hand-waving and vague explanations instead of the spreadsheets their accountants are using, there's a strong smell of cow manure in the air.

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Go

NZ shows the way ...

Being an Ozzie I don't normally go looking at NZ posts web site, but today I did so for a friend. And bugger me, one of the products listed is a USA Shipping address:

http://www.nzpost.co.nz/products-services/online-shopping/youshop

Those Kiwi's are sneaky bastards. And yes, in this case bastard is an Ozzie term of endearment.

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Re: NZ shows the way ...

that's friggin amazing had no idea that existed.

i think i will be leaning on a few friends in nz, what they save me in postage they will get back in duty free.

cheers for the post.

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Re: NZ shows the way ...

That's just a freight forwarding service, mate. Try MyUS or Shipito. You'll find the airfreight is cheaper direct.

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Pint

You might want to check your map there, mate

"21 cents to get to Perth and probably Darwin, Adelaide or Cairns for that matter."

Sydney to Perth is three times the distance of Sydney to Adelaide (3,290 km and 1,160 km as the crow flies respectively). Not to mention crossing the Murray Basin is an entirely different proposition to crossing the Nullarbor. Sydney to Adelaide is in fact only half as far again as Sydney to Melbourne (710 km as the crow flies), so your freight cost to Adelaide is going to be in the 13-15 cent range.

Cost to Darwin would likely be more than to Perth though, because even though the straight-line distance is about the same (3,140 km), if you're going by road you're doing two sides of a rectangle (either Sydney-Adelaide-Darwin [4,180 km] or Sydney-Brisbane-Darwin [4,100 km], take your pick.) So the actual distance is about 1000 km more than to Perth either way, making your cost about 26-30 cents there.

Now that I've finished being pedantic about Australia's geography, your article's main point about freight cost not being a good reason for the ripoff pricing is spot on. I'm laughing at the greedy bastards with the rest of you!

Beer because you really need one after driving all that way...

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Joke

Re: You might want to check your map there, mate

I didnt know Crows could carry cargo!!! Why the bloody hell do we bother with trucks and roads!!!

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Re: You might want to check your map there, mate

It depends, are you talking an African or a European crow?

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Re: You might want to check your map there, mate

"It depends, are you talking an African or a European crow?"

Nah, an Australian crow mate. Bastards are so bloody big here they could probably haul a jumbo's worth without too much trouble!

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Anonymous Coward

Where is the trusty ACCC?

I've wondered why the ACCC hasn't looked into the international rates of AusPost?

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Devil

Re: Where is the trusty ACCC?

The ACCC is preparing for a spend up on glasses, as the priest warned them what it would lead too.

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FAIL

Re: Where is the trusty ACCC?

Australia Post.... Bah Humbug.....

Their own Facebook page is filled with a litany of grievances about inept service, DEEP price gouging and absurd postal costs.

We send all documents by email, and all freight by couriers.....

Australia post is run by a moron management.

There are many small sellers / business's who'd postage costs have sky rocketed to the point that it's way cheaper to buy stuff direct over seas from China / USA / Europe etc., than it is to send it within the same city / suburb / interstate.

Sending stuff overseas, is absurdly expensive compared to the cost of importing it by post.

I think the last complaint I saw, they said it cost $24 to import via air mail, and $280 to send back....

The management of Australia Post ought to be locked in stocks in the town square and pelted with rotten vegetables.

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Unhappy

Re: Where is the trusty ACCC?

ACCC = gummy shark

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Re: Where is the trusty ACCC?

Indeed. My previous business was doing fine with $4.20 prices of small packages from AU->US. Then, within 12 months things just went crazy and suddenly it's $13.70 just for rudimentary "we'll lose it" airmail. The other massive insult was when you use Express Courier International, was $47 about 24 months ago, now $56 (~20% rise), but worst is when you compare it to the cost of getting EMS freight in (same service) which costs less than half for the same package. It's almost like Auspost wants you to start using FedEx/UPS/DHL because they can't handle it.

( P.S. the 3~5 days quoted for ECI/EMS is a load of bollocks, more like 7~12 days ).

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Already obvious

It's nice to see some actual numbers on this but it was already blindingly obvious that the higher prices of technology products sold in Australia had nothing to do with shipping costs. The fact that you can buy something that has been made in Asia, shipped to the warehouses of online retailers in Europe or the USA and then individually airmailed to you in Australia for much less than the cost of the same item that has been shipped directly to Australia makes that pretty clear.

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Anonymous Coward

Recently experienced this

I looked for a sonos amplifier and did nothing but change the region I'm in (top right):

www.sonos.com/shop/products/connectamp?lang=en-us&region=us

www.sonos.com/shop/products/connectamp?lang=en-us&region=au

The price jumped from $499 to $799 for admitting I'm currently in Oz (note that this is prior to any postage costs). It seems some companies are not even hiding the fact they rip of Australians any more.

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From personal experience...

Sorry but I don't agree with the article - from first hand experience sending individual parcels via Australia Post you CANNOT post a parcel for $1 in Australia for delivery to the door. Then there is the little matter of insurance.

It is more likely to cost upwards of $20 for say a 10cm cube, and it could be over $100 depending on its weight.

Posting a DVD to someones home is likely to cost $20 - doubling the cost of the DVD.

Posting a valuable camera lens or a small article of clothing will be $50 or more - assuming you include registered post and insurance.

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Are you Gerry Harvey by any chance

because if postage costs were anything like your example eBay would have shut up shop in Australia long ago. Standard postage costs for a DVD (I just checked) - about $5. Lenses (I know from experience) - around $10-$12. I can't imagine where the $50 comes from - are you paying someone to ride shotgun? Your 10cm cube shipped from Brisbane to Perth, assuming the maximum weight of 20kg (what are you shipping - solid gold?) - $64.95 for standard shipping. Yes, you can pay a silly $200 plus for express shipping but that's utterly irrelevant to point of the article. For something more realistic - under $10.

Nice try Gerry, but remember - the internet makes it ridiculously easy for people to find out when they're being ripped off.

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FAIL

Re: From personal experience...

I call Bullshit.

A DVD, depending on how you pack it might slip in under $3 or you might be up for $6.50.

Camera lens from Brisbane to Adelaide was about $20 including insurance. I actually did this recently.

One and a half kilo fragile and very valuable item from Adelaide to the boonies west of Brisbane under $30 including insurance and tracking. I also did this recently. Worst case on this was Aussie Post's "Express

Platinum" service which would indeed have cost $50 but would have gone overnight (except it wouldn't in this case 'cause it was going to the boonies...)

Those prices a third of what you claim but still much higher than the article assumes. But if you are shipping volume you don't use Aussie Post, you have a deal with a courier company.

On the other hand we had fun and gams yesterday: we were quoted $34 freight for moving something two suburbs - a distance of about 4km being really optimistic. When challenged as to why it wasn't the usual $10 we were told it was over 70kg total weight. Our response: send it in two lots and save $14. The driver was very unimpressed, especially as their crappy dispatching system made him actually do it in two loads...

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Re: Are you Gerry Harvey by any chance

Gerry freighted me a lens yesterday for $5.95 (Nikon 50mm 1.8G). And for what it's worth, the lens itself was only $9 more expensive than Kogan the bogan wanted.

Also FWIW, the lens had a retail price sticker from the local Harvey Norman on it which was about $90 more than I paid. It seems Gerry online is undercutting Gerry shopfront. Final FWIW, I keep seeing Kogan ads for the damn lens on my iPad on half the websites I visit - why isn't there a "go away, I just bought one" checkbox?

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Re: From personal experience...

A few years ago I posted a "care box" of assorted Australianities from Sydney to my sister who was in Japan at the time. This was about the size of one of the boxes you buy reams of paper in. Shipping was $93 as I recall.

Our company has had occasion in the past to ship ~30 PCs from Sydney to Melbourne with monitors.As I recall it was around $200. I think we actually used a moving company rather than a courier as such.

However, the article does fail to mention that Adobe don't use bulk shipping to ship their product. Every copy of CS5 you buy is carried on a velvet cushion by a sternly correct English butler on a first class flight from America.

Have you checked the salary of English butlers lately?

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Pirate

you seem to ..

.. have forgotten landing costs (container from ship, move around dock, customs, import tax, etc.), or you don't seem to mention them specifically, maybe they are embedded? - I am not saying this explains the price gauge, but the landing costs in Oz are shockingly high .. it cost me more in landing costs than the total cost of the journey from China to Brisbane port.

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Re: you seem to ..

Yes, looks like another showdown with the MUA coming up.

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A very recent example

I received a notice that an update of one of my music production suites was available from the German software company. They offered a price of US$399 with *free* economy air shipping within 8 days (ships from their distribution centre in Hong Kong).

The Australian distributor then also contacted me as told me their price was A$489, on special!, with shipping an extra cost at about $40. Deliver 2-4weeks after payment processed.

So it was pay an extra A$100 for exactly the sam product, slower and with no benefit to me as the customer.

What could possibly be wrong with that business model?

How can individual air freighting be cheaper than trucking it across the country?

I ordered from Germany and it arrived 2 days later...

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Anonymous Coward

Maybe its not the shipping?

Its possible that it's the WAY its brought into the country, and what it goes through before it gets to the end sale point. Now this is all proof free but I have heard the same thing from 2 or 3 sources in the retail trade, maybe an urban myth maybe not but it would explain a lot.

Heres how the catel works. You want to sell a widget, well widgets are only available from licensed widget importers - assuming you want to do this 'properly' - now the importers will only sell to their buddies with warehouses so if you want to get them into your shop/warehouse you have to buy from one of the buddies or maybe the buddy of the buddy or the buddy of the buddy of the,,,,,, well you get the idea I am sure. The % markup goes through the roof everytime you hit the 'buddy' word. As the meerkat says 'is simples no?'.

Then again that might be complete rubbish and they are price gouging at the other end. Salesmen talk such rubbish 99% of the time.

Paris? Because she would be sad that her Jimmy Choo's were more expensive here.

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Anonymous Coward

hmmmmmmmm

I work for one of these 'price gouging' US tech companies over here in Aus. I am also a keen fisherman and diver, which means that I tend to purchase a lot of US manufactured fishing and diving equipment. This equipment tends to be considerably more expensive in Australia. I thus feel I have a perspective from both sides of the argument.

What I will say is this. People earn SHED loads more money in Aus than they do (performing a similar role) in, for example the UK or the US.

So, a graphic designer over here will moan about being charged 50% more for his copy of Adobe whatever than he would pay in the US. However, this graphic designer will still expect to be paid two or three time the going US rate for the work he undertakes in Australia.

Pricing for these products is not based on US costs plus shipping. It is based on what the local market will sustain. If you look at the cost of the Adobe product as a percentage of the annual income of the user, then the Aussie graphic designer is getting an absolute bargain......

Also, Australia is 10 years behind the rest of the world in learning how to shop on the internet. Your average bogan from Bendigo has only just worked out that he/she has been gouged stupid by Aussie retailers for most of their life. Hence price competition in Aus has been limited.

You want to change this? Just carry on buying stuff online from the US. This will have a greater impact on the US companies than any amount of moaning in the press. You can already see all the US fishing and diving brands changing their strategy in Aus, cutting out their expensive 'distributors', selling direct and matching US prices.......

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Re: hmmmmmmmm

This page would seem to agree with you.

http://www.bobinoz.com/blog/10153/australian-and-uk-salaries-compared-part-two-2012/

Combined total of the 10 roles listed nets $805,872 AUD vs £301,504 for the UK.

At today's exchange rate, the AUD amount would be £558,814.21. So basically someone in Australia is earning 1.85 times more than someone in the UK.

As such, I wouldn't be too surprised if I walked into a store (paying 1.85x more rental) and purchased from the cashier (earning 1.85x salary) a CD that also happened to cost 1.85x more.

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Meh

Re: hmmmmmmmm

You almost had it. What you really need to look at is purchase power parity (I think it's called that). Up until a couple of years ago the exchange rate for $au was about 40p. So back then the relative salaries would have been much the same (multiply the uk wages by 2.5) to get the Oz equivalent. Yet, in the sometime frame the cost in native currency hasn't really changed ie a £10 DVD 3 years ago is still £10 now and a $30 DVD in Oz is still $30 now (roughly speaking). A better way to compare is cost of living (I think The Economist still produce a cost of living comparison based on the price of a Big Mac).

tl;dr. It's more than just exchange rates. You have to look at what the money will buy.

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Pint

Re: hmmmmmmmm

PPP is useful - but comparisons between countries are always going to be complicated, not only by relative prices but also by the different baskets of goods and services purchased - in each country, we will tend to adjust our lifestyle to take advantage of those things are cheap.

In Australia, I certainly find that fresh food is plentiful and cheap (compared to processed); meaning that feeding the family is not a great imposition on the household budget and leaves cash available for other purposes. Unfortunately, this does really bring us full circle - because some Australians will have stupid amounts of cash available to spend, companies can charge high prices "what the market will bear" for some goods, in the knowledge that punters will pay ... whatever the ACCC says.

Beer ... just because ...

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Re: hmmmmmmmm

Yeah, maybe that graphic designer HAS to charge more because people like Adobe are bloating out their input costs, and if the good 'ol USA stopped ripping us off, the designer could charge less and the whole economy becomes more efficient.

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myth confirmed

I imported goods as a vendor for 10 years from both places via air, while the landing charges were often more than the freight, we never had to put more than 3% market, all of which we exposed to our channel. we also post exactly how the exchange rate/AU price was calculated... we definately get ripped off.

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Megaphone

Its not just shipping costs

Costs for warehouse workers, couriers, store staff, pen pushers in the office all are much higher in Australia. Adding to the costs of the imported products is that we seems to enjoy having an importer who sells to a wholesaler who sells to a distributor who sells to a retailer who sells to us. And that is a lot of extra admin staff and stock movements.

Apple is a bit different and only has a distributor, or a number of them, in Australia. Again the staff here cost more than in the US or just about anywhere in the developed world (anyone looked at the minimum salary these days as well as loading and penalty rates and ...). When we order from overseas we don't have to pay anyone for the privilege and we get to use much lower cost personel to process it for us.

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Trollface

Socialist Capatalists

Companies are locked into Australias high wages. The wealth of Australia is spread around the system with high minimum wages and the fact that 'low-skilled' jobs here can pass as a trade. Tradies and truckies do OK. Telstra run the show on the networking side and are a bloated 51% private 49% state company. Cars and trucks cost more and so does the repairs. Petrol is the one cheaper area.

Australia is locked into an expensive system, like the UK was 10 years ago during the rip-off Britain realisation. People voted with their wallets. I am personally waitinf for the Amazon.com.au invasion. In Britain Amazon has destroyed the shops.

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Urh
Facepalm

Do keep up

While you have a point about wages, you may want to keep up with the times. Telstra is now a good ol' fashioned 100% private monopoly, and has been for nearly a decade. It's why the telco sector in this country is a complete joke.

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I'm extremely confused by this whole argument

The argument about why companies are charging more in Oz.

Companies do not tot up their costs and then decide what the price is going to be. They try, instead, to work out what is the absolute maximum they can shake out of the customer. Then they charge that.

The reason that companies charge more in Oz? Because they think they can.

And that's it, there is no other reason at all.

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Mushroom

You know why they charge so much for postage/IT/TVs/Cars?

Because they CAN and they KNOW that people will pay for it - even when you account for the ~10% with the nouse to purchase overseas (obviously cant happen with cars) and import it themselves.

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