Tina Chen
ABOUT 80 percent of Shenzhen courier companies were made illegal and about 300,000 employees are facing unemployment one year after a new postal law came into effect Oct. 1, 2009.
Courier companies had been given a year s grace to obtain a license issued by the postal authority. Those that had failed to do so by Oct. 1 would be closed.
Only about 270 Shenzhen courier companies had obtained a license from the Guangdong Postal Bureau and another 10 from the State Postal Bureau during the grace period, the Shenzhen Economic Daily reported.
There were about 2,217 courier companies registered with the city s market administration authority, official data showed.
Authorities will investigate and close unlicensed companies, the State Postal Bureau said.
The new postal law hit private courier companies like an earthquake, Cui Zhongfu, deputy chief of the China Logistics Procurement Association, told a seminar.
The new law would enable EMS the delivery service provided by State-owned China Post to gain larger market share, according to an industry insider. China Post was formerly affiliated with the State Postal Bureau.
Under the new law, the required registered capital of courier companies was increased to at least 500,000 yuan (US$75,360) for deliveries inside the city, 1 million yuan for deliveries outside the city, and 2 million yuan for international deliveries.
We face a higher threshold, said an unidentified businessman.
There is good news, though. The business scope of private courier companies has been expanded to include items weighing 50 grams or more, down from the 350-gram minimum required under the old law.
Private courier companies, struggling under policies protecting State-owned EMS, experienced rapid growth by offering flexible services and low prices.
The total volume of the courier market in Shenzhen has been estimated to be worth between 2.5 and 3 billion yuan. Private companies account for about 80 percent of the market.
Year-on-year growth in the private sector is 50 to 100 percent and the average growth rate remains at about 20 percent.
Data from the State Postal Bureau showed the market volume nationwide was 1.64 billion items delivered from January to September, an increase of 22.4 percent over the same period last year.
The quality of service in the private sector was, however, widely criticized.
Four leading private courier companies, Shentong Express, Yuantong Express, ZTO Express and Yunda Express, had accounted for more than 40 percent of all complaints last year, according to the 2009 report of the Courier Industry Complaints Statistics and Analysis by the China Electronic Chamber of Commerce.
Most private companies started with just a few bicycles and motorbikes. Trust in them declined as deliveries became delayed and important items were lost, said an unnamed official from the city s logistics and supply chain administration association.
Despite all the problems, the delivery service industry was a popular investment because of increasing market demand and sustained growth, industry insiders said. The new law would force small inefficient businesses out of the industry, they said.
