Private delivery of inbound international mail in China
Story Filed: Thursday, May 10, 2001 5:31 AM EST
CHINA, May 10, 2001 (AsiaPort via COMTEX) — A bitter feud between freight forwarders and China's official postal sector appears unavoidable with each side unable to agree on whether exclusive rights exist over the delivery of international mail.
Freight forwarders are refusing to obey restrictions by postal departments and some local authorities that prevent them from competing for a share of the international mail delivery service.
"Attempts are illegal to prohibit freight forwarders sending international business mail in many regions," claimed Li Limou, vice-president of China International Freight Forwarders Association, at a seminar late last month.
According to a news release from the association, since the middle of last year, branches of China National Foreign Trade Transportation Corp (Sinotrans) in Shaanxi, Sichuan, Hebei, Shandong and Jiangxi provinces were inspected by regional postal department officials and some documents were seized.
Some of these branches belong to a joint-venture between the US-based DHL and Sinotrans.
Regional postal departments claim that Sinotrans and its offshoots have violated the 1986 China Post Law which gives State post offices exclusive rights to mail delivery.
The law stipulates that mail or items which have the characteristics of mail should be exclusively dealt with by postal enterprises, with the exception of any relevant regulations passed by the State Council.
In an ordinance on international freight forwarding released in 1995, the State Council allowed international freight forwarders to be engaged in the transport of goods and business documents with the exception of private mail. Freight forwarders argue the 1995 ordinance is the regulation mentioned in the post law.
"Therefore, the postal departments have trespassed our legal operations, and I have ordered my branches nationwide to use any measure, including force, to protect their legal rights," said Wang Shusheng, president of Datian W Group, the FedEx's only domestic agent in China.
However, an official with the legal affairs department under the State Postal Bureau, surnamed Shi, said that the 1995 ordinance should be applied to delivery agents rather than direct deliverers.
"Thus, strictly speaking, international forwarders' current action of directly delivering goods and documents is not in accordance with the ordinance," said Shi, claiming that the China Post's express mail service (EMS) should be the only entity allowed to deliver international express mail.
Launched in 1986, EMS recorded an income of 3.58 billion yuan (US$431 million) in 1999. It is the largest player in the country's international express delivery market, enjoying a 40-per cent share in 2000.
However, insiders said with the rising competition from foreign forwarders such as UPS and FedEx, EMS's market share was reducing by 4 per cent a year.
The current conflict shows no sign of resolution.
Li said his association has reported the conflict to the Ministry of Foreign Trade and Economic Co-operation, watchdog of the international freight forwarding business.
He said the ministry was negotiating with related departments to solve the dispute.
The State Postal Bureau refused to comment on it.
Li argued that the post law should be revised and interests of all sides be protected.
But before the revision was made, the co-existence between freight forwarders and the EMS in document delivery should be maintained, he added.
Chen Huai, an economist with the Development Research Centre, a policy think-tank under the State Council, said the revision of postal law would not be enough to solve the dispute without changing the monopoly status of the post office.
The postal department has struggled in recent years as a result of the split from the profitable telecoms sector in 1998, and increasing competition from international and domestic forwarders.
The postal department records losses in the billions of yuan every year.
Chen said losses were inevitable as a result of the post office's public service function, but could be greatly reduced by increasing efficiency and reducing staffing levels.
The post offices had failed to provide adequate services to meet consumer demands, therefore, it should not block others to provide them, Chen added.
From China Post News, Page 2, Tuesday, May 08, 2001
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KEYWORD: CHINA
INDUSTRY KEYWORD: Marketing
Investment
SUBJECT CODE: General News and News in Other Industries
Copyright © 2001, Asiaport Daily News, all rights reserved
