CRE launches new express delivery service

By Yang Jing Source:Global Times Published: 2014-4-2 0:38:03

A subsidiary of China Railway Corporation (CRC) launched a high-speed train express service Tuesday.

The move reflects CRC's determination on market-oriented reform although the new express service is just a beginning, experts said.

The service, which is operated by CRC's China Railway Express Co Ltd (CRE), is available in 20 cities that are connected by high-speed trains, China National Radio (CNR) reported Tuesday.

With the high-speed train network expansion, CRE will further extend service to other cities, CNR reported.

By using the high-speed train, CRE also provides same-day delivery, which means the parcels can be received on the day they are dispatched, a staff member of CRE, who declined to be named, told the Global Times Tuesday.

Sending a parcel no more than 1 kilogram in weight from Beijing to Shanghai through the same-day delivery will cost 130 yuan ($21), and each additional 1 kilogram will be charged 25 yuan, the staff member said, noting the same-day delivery must be booked before 10 in the morning.

Some customers said the same-day delivery is too expensive and it is difficult for ordinary customers to use it, media reports said.

Same-day delivery is not new in China. SF Express, a major domestic private courier, launched the service in 2009 and charges 150 yuan for a parcel weighing up to 1 kilogram, the report said.

If the delivery is not urgent, customers can choose the next-day delivery, which is much cheaper, the CRE staff member said, noting a parcel no more than 1 kilogram costs only 17 yuan and will be delivered before 6 pm the following day.

CRE's next-day delivery is also cheaper than SF Express, which charges 22 yuan for a cross-province parcel.

CRE believes express delivery through high-speed trains is fast and punctual, and is not impacted by the weather, according to the CNR's report.

CRE's move shows that the State-owned company is actively participating in market competition, Xu Yong, chief consultant of Shanghai-based China Express and Logistics Consulting, told the Global Times Tuesday,

Xu said that the CRC's positive attitude of seeking a change is more important than the new service itself.

However, the high-speed delivery service will not have a huge impact on the market or become a threat to other couriers in the short term because of limited delivery capacity due to the lack of high-speed freight trains currently, according to Xu.

CRC is a spinoff from the now defunct Ministry of Railways.

Liu Jianxin, a director at the China Society of Logistics, agreed with Xu.

He told the Global Times Tuesday that CRE's high-speed train express still faces many challenges.

The target of high-speed train express service is mainly small parcels such as documents, which have a requirement of clean and safe delivery, Liu said.

 The service has specific requirements for coach or train, he added.

Also, the cross-province express requires cooperation between different local railway stations, but the reform of the former railway ministry delegated power to local railway bureaus, which may lead to difficulties in cooperation and profit distribution, Liu noted.

The former railway ministry was once nicknamed "big brother" due to its monopoly position in China's transportation market but faced competition from road and air transportation gradually.

China Railway Corp approved for 150b yuan bond issuance

China Railway Corp (CRC) has received approval for a quota to issue 150 billion yuan ($24 billion) worth of corporate bonds in 2014, the same amount as last year, two sources with direct knowledge of the matter said on Tuesday.

"The quotas for railway bond issuance will remain unchanged for the third year, with the first batch likely to open tender on April 10," said one source, who asked for anonymity because the quota is not yet public.

Another source said CRC will issue an initial tranche of 20 billion yuan around April 10, with a tenor of 10 years.

The railway bond quota was set at 100 billion yuan in 2011 and was raised to 150 billion yuan in 2012.

CRC was created after the Ministry of Railways was dissolved in March 2013, following a series of corruption scandals.

The regulatory functions of the ministry were merged into the Ministry of Transport, CRC was entrusted with building and operating the rail system.

Analysts have also expressed concern about CRC's heavy debt burden. The company had 893.6 billion yuan in bonds outstanding as of March 18.

Reuters - Global Times



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