Experts call for global Chinese courier

By Chu Daye Source:Global Times Published: 2019/8/25 19:23:39

Analysts cite FedEx incidents, but process will be lengthy

An employee of Chinese delivery giant SF Express displays a model of a company plane during an e-commerce expo in Wuhan, Central China's Hubei Province on May 10. Photo: IC

Chinese express delivery experts are urging the country's companies to set up an independent global network for express deliveries as soon as possible after US-based FedEx fell into disgrace in China.

Shao Zhonglin, former assistant secretary-general of the China Express Association, was quoted as saying in a Securities Daily report that so far Chinese courier delivery companies have been weak.

Chinese courier companies have focused their energy on the domestic market, fighting a price war in which there are no winners and they are lacking global vision, Shao said in the report published on Friday.

No Chinese courier company has an independent global logistics network and the majority of cross-border parcels rely on global courier giants such as UPS and DHL. These issues indicate a mismatch of China's fast-growing express delivery industry, Shao said. 

The comments came after US courier delivery company FedEx suffered a huge brand damage. The company has been accused of helping the US crackdown on Huawei after it misrouted packages belonging to the Chinese tech giant. The company is also under investigation in China after a package that FedEx delivered was found to contain a handgun, according to media reports last week. 

Industry insiders said only Chinese delivery giant SF Express has shown an ambition to forge a global network, although it has a long way to go. 

China's annual volume of express delivery has ranked first in the world for five consecutive years, according to a report released by China's State Post Bureau in April.

The report forecast that express services would deliver more than 60 billion items in China in 2019, up 22 percent compared with 2018.

Liu Jianxin, an expert at the China Communications and Transportation Association, told the Global Times that the Chinese market leads other market in terms of volume but about 90 percent of the parcels circulate within the national border. Therefore, the industry has little international influence. 

"The continued development of Chinese e-commerce and some of the innovative ways of cooperation devised by Chinese companies could serve as a booster if the industry aims to significantly develop a truly global business," Liu told the Global Times on Sunday.

Xu Yong, chief consultant of industry website, said the process of a Chinese express delivery company obtaining global capacity will be a long one. 

Although SF has been doing this for a decade, it will need another decade or longer before the world could see China's answer to FedEx running parcels globally, experts said.

"Other Chinese industries could set up footholds in the developing world first before making footprints on developed markets. But express delivery markets are focused on developed economies, meaning a rising Chinese courier industry will have to face the brand images of global giants right from the start and cannot win market share with a price advantage," Xu said. 

Xu said the Chinese companies must rely on some innovative ways to win global market share as conventional strategies have slim chance of success.

Chinese e-commerce giant Alibaba has invested in several Chinese courier firms in recent years. 

"If Alibaba's business could continue to prosper in China, and it invests in its global ambitions of letting sellers sell globally and buyers buy globally, then there is a big opportunity for Chinese couriers banking on the resources provided by Alibaba," Liu said.


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