The State Post Bureau of China closed down 73 unlicensed express delivery firms during the first half of its year-long crackdown on irregularities in an industry dominated by small private companies.
The bureau said that by June 30 it had identified nearly 1,200 irregularities, censured more than 4,600 companies and suspended 73, most of them franchised outlets.
The sector grew more than 20 percent annually from 2006 to 2010 with the rise of online shopping and e-commerce. Many delivery firms used a franchising system to speed up expansion, cutting costs by employing cheap labor and putting the quality of service at risk. In a bid to reduce irregularities, the bureau insisted franchised outlets must be licensed by May 1.
According to the bureau, the sector's revenues reached 33.52 billion yuan (US$5.19 billion) in the first half of this year, 26.5 percent higher than a year earlier. Volume rose 52.8 percent to 1.58 billion items over the same period.
It is understood that as a direct result of disorder and fierce competition in China's express delivery industry, DHL dropped its domestic courier service to focus on the lucrative overseas market, which generated 8.87 billion yuan in the first half, 4.6 percent higher than a year earlier and accounting for just over a quarter of the industry's total revenue from only 3.9 percent of the total traffic.
