China Post weighing far-reaching reforms
An official of the State Postal Bureau of China, disclosed on June 20 that a far-reaching postal reform solution had been submitted to the State Council, the nation's cabinet, for approval. The SPB – a government agency and a utility which administers the postal industry and manages postal services nationwide – plans to divide the postal industry into four segments: state-controlled postal services, logistics and express services, private document services, and financial services such as insurance and savings. In addition, it is scheduled to guide independent companies to run the last three segments. Guan Rongshun, general manager of China Postal Airlines Ltd., an airfreight and mail company, said in an interview that a consolidation between the logistics and express businesses was in process – China Post Logistics Co., Ltd. (CNPL) and Express Mail Service (EMS) would be merged within the second half of 2005. CNPL and EMS are both under the aegis of the SPB. CNPL is a state-owned logistics company and EMS is a well-known express service operated domestically by China Courier Service Corporation, a state-owned professional express company also under control of the SPB. After the consolidation, both sides can make better use of network resources under the SPB group. Furthermore, as a licensed airfreight company for China Post as well as EMS, China Postal Airlines will specialize in the EMS business at night and other businesses by daylight. China Postal Airlines, the official added, has applied to the SPB for the expansion of its route network to neighboring areas such as Hong Kong, Macau, and Japan. It is seen as the sign of a great reform in China Post. Firstly, the company, the general manager Guan said, will open routes to Tokyo and Nagoya in Japan from Mainland China, then to South Korea and Singapore, and to Europe and America. It decides to extend reach to the world market. To increase competitiveness in the world and vie with Big Four express giants ?C UPS, FedEx, DHL, and TNT is a major factor in the decision. So far, the giants have held 60% of China's international express market. So, China Courier Service Corporation must underpin its power for EMS in airfreighter, transport capacity, and service network, Guan pointed out. In a bid to battle with aggressive foreign express giants and Chinese home private counterparts, China Courier Service Corporation has sped up expansion. It started an across-area service called Next Morning in 2004 on the basis of night flights provided by China Postal Airlines, which additionally became the first all-night- long airfreight company in the industry in the country. As early as on July 15, 1980, China Post officially started the EMS business. In an effort to boost it, China Post specially opened China Courier Service Corporation in 1985. Founded on January 18, 2003, China Post Logistics with registered capital of CNY 200 million has grown into a comprehensive modern logistics company in storage, packing, delivery, processing, cargo handling, transportation, and information services. It has set up 31 province-level subsidiaries throughout the country. Established in November 1995, China Postal Airlines formally began operation on February 27, 1997. From February 1997 to June 2000, it ran the mail business to Shanghai in Eastern China and Guangzhou in Southern China on the basis of Tianjin Binhai International Airport in Tianjin, Northern China. In 2002, the SPB and China Southern Airlines Co., Ltd. (NYSE: ZNH, SEHK: 1055, and SHSE: 600029), the largest airline in China, reorganized China Postal Airlines, whose registered capital rose to CNY 394.9 million. The SPB takes a 51% stake and Southern Airlines 49%. In November 2003, China Postal Airlines opened a mail and cargo route from Shanghai to Osaka in Japan. (USD 1 = CNY 8.28)
