Couriers cave in to China Post deadline
International express operators yesterday bent to the wishes of China Post and filed for “entrustment” to deliver business documents and small parcels on the mainland.
The move is seen as a dramatic climbdown for the couriers, who had stated their staunch opposition to a process which effectively made their rival, China Post, the industry regulator.
“Notwithstanding that we continue to oppose the nature of the regulator and the process in general, we have decided to file for entrustment,” an executive said. “Faced with being a compliant operator or not compliant in the mainland’s express industry, we chose to be compliant. But we will continue to vigorously challenge anything we consider to be unfair trade practices.”
China Post had set today as the filing deadline and non-compliant companies were to be banned from operating on the mainland.
The express operators, represented by the Conference of Asia-Pacific Express Carriers, decided to file after being told China Post would have limited powers.
“We received assurances from Moftec Ministry of Foreign Trade and Economic Co-operation the bureau will act only in an administrative capacity which would have no teeth or bite to it,” the executive said. “They told us they were working on making the industry regulator independent, but set no timetable . . . We have never been against regulations; the express industry has them everywhere. What we were, and continue to be, opposed to is the regulator.”
An industry expert said it was likely the eventual regulator would evolve in the same way it had in the mainland’s telecommunications industry, given that both are governed by the Ministry of Information Industry (MII).
China hived off the mobile-telecoms business unit of the Ministry of Post and Telecommunications, MII’s predecessor, for listing in Hong Kong in 1997, but MII still regulates the industry.
China Post last month stated its intent to isolate its six most profitable regions for a future listing. However, with the mainland’s telecoms industry yet to open to foreign competition, it remains to be seen how a similar move would be accepted in the express industry, which includes foreign operators.
Express Mail Service, China Post’s dedicated express unit and the foreign operator’s direct competitor, last year saw international sales reach 1.07 billion yuan (about HK$1 billion). It carried about 4.2 million pieces and is believe to control about 33 per cent of the market.
