It is with incredible sadness that I have been forced to throw in the towel on our fatwood category. After 28 years of providing beautiful hand-culled fatwood to so many of you, the volume/cubic shipping costs plus a steep wholesale increase from our supplier have destroyed the microscopic margin we were trying to preserve.
Many of you know me well enough after all these years to know that I will NOT be going quietly, however, and I am adding below some comments on the biggest invisible rip-off of the American consumer in as long as I can remember, and this is my 40th year in business.
But first, I just wanted to thank you for your support, your business, your humor, your stories, and your ability to make me feel great about our quality and fast shipments. I have talked with SO MANY of you over the years, I know many names, and have traded many business stories and perspectives with you. I just want to say thank you, thank you, thank you. You have made my life richer by your presence.
NOW. I will begin by saying that all remarks here are In My Opinion, gleaned over the past 16 years sitting in front of a computer shipping to you guys every day. These remarks are inductive, and anecdotal. The proof is only through observable behavior, and if there ever was a smoking gun I am sure it hit the shredder a long time ago. The covert process, however, does not change the result, and it is why prices across the board throughout America have gone up on everything significantly (in my opinion).
In 2006 Congress decided to put an enormous burden on the Post Office, arguably the most beloved and profitable branch of the Federal Government. The Post Office was profitable, never using tax dollars, and delivering to every corner of the USA while getting packages out to the world cheaper than FedEx and UPS. So Congress decided to take $5 BILLION dollars a year from the Post Office for the Federal Budget, AND forced them to keep in reserve 75 years of retirement funds, coming to about $7 BILLION a year, something no company in the USA, public or private, is forced to do. The total hit for the Post Office was $12 Billion a year, ripped out of their operating budget. The only way I believe that Congress would even CONSIDER this move was due to the shipping lobbyists whispering in their ears, and since small package shipping in the USA is a defacto monopoly, one can suss out the fingerprints. Since it had been impossible to PRIVITIZE the beloved US Post Office, it had to be subordinated. The best way to cause a company to raise its prices and take packages they might not otherwise take is to rip the heart out of their operating budget. As I said, this was accomplished in 2006.
So the Post Office began raising their prices, inexorably, to meet their depleted overhead. In the midst of this steady price increase, Wall Street fiddled the economy and collapsed it. Whatever timeline plans the shipping companies had, they were caught in the downward vortex of the economy on 2008 and simply had to ride it out with the rest of us.
Four years (about 2012) into the “recovery” retail online companies began seriously flirting with FREE shipping, something which does not, and never has, existed, as all companies PRICE-IN their shipping. Shipping should have been listed as “included”, not free. The biggest difference in shipping for small companies and Mom and Pops occurred because they paid premium shipping costs (although discounted) while the big companies worked at 60% discounts, or more. At that time the shipping was calculated by taking the weight for ANY box under 84” (length + circumference + height) and shipping it with a fairly straightforward formula., i.e. a box that is 24 x 12 x 10 would be = 24+12+12+12+12+10 = 82”. That box would be priced by weight and distance (zone). A company could fairly easily calculate their shipping, and if they were tied into the shipping services they got a real time quote for their customers on the website.
By 2014, 6 years after the collapse, and 8 years after the Congressional rip-off of the Post Office, the country was steadying itself, and the Post Office had in the intervening years raised its prices significantly to accommodate the operating budget shortfall, as well as the lost revenue from the collapse. In January of 2014, in lock-step, FedEx and UPS changed their ENTIRE formula for charging for packages. The weight+distance formula for boxes under a certain size was thrown out the window, to be replaced by the formula they used for all AIR shipments, a cubic measurement that was length x width x height. So that 24 x 12 x 10 box above was now 2880 cubic inches. In this formula, large boxes that contained lightweight items were severely penalized, as the weight was now measured against the cube. Folks like me who shipped glass items and ceramic items that required careful packing and padding in larger boxes for safety watched their shipping costs go up 20%. Small clothing items went up 30%. It now cost about $1 a pound to ship fatwood to the East Coast from Oregon, and that with a 34% discount. While the old shipping boxes one could buy from a box company could be purchased knowing that, under 84”, they were safe and the pricing was accurate, the new cube added so much to the shipping cost that it became a matter of ¼” differences in the size of boxes. A 12x12x12 box, inside dimension measurement, NOW would measure 13x13x13 due to the new laser-measuring machines in the terminals. Those extra inches NOW added $$ to the shipping cost, in addition to the new “air” calculations.
Caught in the net of this egregious cash grab were the online retailers who were shipping FREE. It not only caused small business America to quickly try and restructure their shipping (or remove categories and items entirely if they were doing at cost visible shipping like us), it really caught the FREE SHIPPERS flat-footed. If a company had very heavy items as well as very lightweight items, rather than applying shipping appropriately to individual items for each customer, with the cube they had to spread out the entire shipping cost across all their products. SO, in the first 6 months of 2014 consumers saw prices go up across the board, ESPECIALLY for clothing and small items, 20%-45%. It was now true that from a free shipper, if you were buying table linen from a company that sold furniture or heavy items, the cost of that linen included the cost of shipping someone else’s table or hutch or fatwood. Consumers of lightweight items began subsidizing the purchases of consumers who had purchased heavy items. I heard people commenting all through 2014 “why have the prices all gone up so much?”. The only folks who really didn’t suffer were those who brought things in by container and had them trucked to their warehouses for distribution. Small brick and mortar businesses, as well as ALL small online retail, sucked in breath every time they opened a shipping bill. Some businesses closed. I talked with a lot of folks who were considering opening a store for their base income and shipping to online customers who were willing to pay the prices. We have been talking about opening our warehouse to customers on weekends to sell the big ceramic planters and glass.
Married into this shipping debacle, the Post Office has now had to raise its pricing to the point where it is somewhat “competitive” with FedEx and UPS, since they were unable to privatize it. Again, this is just my observation, but the apparent plan put in place before 2006 by the shipping companies seems to have come to fruition. If you can’t privatize, then subordinate your competition and get their prices up to MEET yours. THEN, have that competitor deliver a whole BUNCH of your packages to all the “unprofitable” delivery areas, many rural, in America. In conjunction with that, fly your competition’s U.S. Mail in your FedEx planes. What you end up with is NO competition, and one big gauzy shipping apparatus, whereby the two branded companies use the Post Office as auxiliary terminals to get rid of unprofitable routes and smaller packages, while maintaining shipping based on cubic measurements that leech every penny out of a shipping box. In the meantime, every DIME of that shipping is being passed to the consumer through much higher prices for EVERYTHING, and it is ALL based on increased shipping costs. The old rubric that the “gas prices” are causing the product prices to rise is no longer a credible lie. In my opinion, this is just the invisible Long-Con turned PRO. It would have started earlier if Wall Street hadn’t gotten to the trough first.
The only light at the end of this tunnel is to force Congress to reverse the 2006 Budget Grab, returning money to the Post Office who could in turn lower their pricing for the millions of Americans who rely as businesses on shipping through the Post Office, and the millions more who send Holiday and Birthday gifts through the mail, and lots more.
Anyone up for starting a national petition to put before Congress? It is probably time to take the invisibility away from this grab and put a little sunlight on it.
But of course, this is just my opinion.
Again, many thanks to all of you who have been part of our family. We will miss seeing those oh-so-familiar names over the transom.