Couriers urge China Post to relax rules

The Conference of Asia Pacific Express Carriers, or CAPEC, an interest group representing the world’s top express courier firms in Asia, has asked China’s State Post Bureau (China Post) to further lower restrictions and interference in the mainland’s express mail service sector as the regulator is finalizing the amended rules.

CAPEC, which represents DHL, FedEx Corp, United Parcel Service and TNT Express, has sent a statement urging China Post to set up a regulatory board separated from its business service department, reduce administrative interference in the industry and increase transparency. “As China is gradually opening its logistics and express market to foreign investors, no major foreign companies want to miss the opportunity to tap the emerging market,” an industry source said. China Post is under a restructuring and amending the industry regulations as the market has been partially opened in 2003 for foreign firms under the World Trade Organization agreement. Market watchers said the restructuring will be finalized by year-end, when the market is fully opened under the WTO terms.

Global giants have already announced expansion plan in China. FedEx said last week that it plans to spend US$439 million (HK$3. 42 billion) to build an Asia Pacific hub in Guangzhou Beiyun International Airport to replace the existing one in the Philippines. Rival UPS, which picked Shanghai as its based, plans to invest US$500 million in China over the next two years.

China Post, a former monopoly, has already lost a 62 percent share of the international forwarding service market to its global peers. It fares better in the domestic courier service sector, and managed to keeps a 90 percent share, with the remaining 10 percent shared among around 1,000 small private courier firms. As a part of the reform, China Post earlier said it plans to spin off three major businesses, including logistic, express and China Freight Post Airline, which has sent applications to run Hong Kong, Macau and international routes.

Yan Chunlin, China chief representative of CAPEC, said the organization would like to have regular meetings with China Post after the restructuring.

“We know the reform document of China Post has sent to the State Council, and hope China Post will enhance transparency in the future,” Yan said. CAPEC has also asked China Post to relax restrictions on delivering mail. China Post issued a rule in February 2002 banning non-state express mail companies from delivering mail under 500 grams.

CAPEC hopes to see no additional restrictions in China’s amended Postal Law and suggested the restriction reduce to mail under 350 grams.