It seems you're misundestanding the problem entirely.
Secondly, factories in China shipping a lot of products aren't going to be sending their entire inventory in the small $2-$3 packages mentioned in the video, they'll be making larger freight shipments not involving the USPS at all.
This was precisely what Chinese factories were doing: dividing up shipments to the US into smaller packages that qualified for the USPS treaty rates, because it cost them pennies per item.
The other way of assuming, is that the China cost is the exact cost, and the US cost is just extra profit to the USPS because the market will bear it.
It cost the USPS more to collect and move these packages within the US then the Chinese sender paid in total shipping costs (China and US combined). These aren't "lost profits," they're actually increased expenses that eat into actual revenues resulting in actual financial losses on Chinese parcel shipments.
Those would be good points if you can back them up with a source. But even the video I was responding to showed the prices as $1.63 for a 1oz package, not "pennies" as you say. A 2oz package costs $1.96, and a 4lb package costs $21.15 which is higher than the US cost of $7.15. So it would be far cheaper for them to bundle the 1oz packages into a 4lb package and pay the higher rate. So I think you'd be better off questioning the source of your information.
Secondly, factories in China shipping a lot of products aren't going to be sending their entire inventory in the small $2-$3 packages mentioned in the video, they'll be making larger freight shipments not involving the USPS at all.
This was precisely what Chinese factories were doing: dividing up shipments to the US into smaller packages that qualified for the USPS treaty rates, because it cost them pennies per item.
The other way of assuming, is that the China cost is the exact cost, and the US cost is just extra profit to the USPS because the market will bear it.
It cost the USPS more to collect and move these packages within the US then the Chinese sender paid in total shipping costs (China and US combined). These aren't "lost profits," they're actually increased expenses that eat into actual revenues resulting in actual financial losses on Chinese parcel shipments.