The State Council will further open up China’s courier market by allowing foreign players to enter and compete head on with domestic firms, news website China Economic Net reported on Thursday.
The move is expected to spur domestic companies to raise their service standards and operational capabilities, the report said, citing the cabinet’s meeting chaired by Premier Li Keqiang on Wednesday.
It will see local players such as SF Express, EMS, Shentong Express, Yuantong Express, Zhongtong Express, Huitong Express and Yunda Express facing stiffer competition from foreign counterparts.
At present, foreign firms are only allowed to deliver overseas parcels to sites in China, but barred from delivering packages between locations in the country.
Earlier this year, UPS and FedEx secured operation licenses for courier services in Beijing.
Foreign firms are taking advantage of their mature business model, information technology and management to drive growth in the market.
Although China is now the world’s second largest courier service market after the United States, the revenue of its courier operators is only one-eighth or one-tenth that of their foreign rivals, while also lagging behind in service levels.
According to UPS president of global public affairs Laura Lane, the introduction of foreign players will help raise the standards of the domestic courier industry.
Foreign firms have been improving their business operations in China. UPS’ contract logistics and warehousing center, which opened in May this year, is capable of providing courier services within four hours within Beijing and next-day deliveries for other cities.
In June, the company launched its China-Europe train cargo transport service, which is 50 percent faster than sea freight in delivery speed and 70 percent lower in cost than air freight, the report said.
By 2020, eight large courier firms will dominate the market, while the remaining ones will be small and mid-sized firms, according to industry experts.
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