Courier services look to China to expand coverage

Companies in the U.S. are facing mature markets at home and are increasingly looking to the Chinese market to grow and remain competitive globally. With its two-way trade, China has become important for international commerce and trade. According to FedEX, U.S. exports to China have grown by 75 percent over the past three years making the United States second only to Japan as China’s top trading partner. And European exports to China are also growing steadily.

DHL was the first international air express company to enter China in 1980, followed by Federal Express (FedEX) in 1984, and United Parcel Service (UPS) in 2000.

DHL’s partner Sinotrans is a licensed customs broker, covering 300 cities through 11 major gateways with about 37 percent of China’s market. In 2003, they invested US$200 million in China for a five-year program.

According to DHL, the venture will open 14 new branches across the country, buy 1,200 new delivery vehicles and create 2,100 delivery jobs.

Since 2000, DHL invested US$1.1 billion in Hong Kong, Malaysia and China, to become a top delivery business in the Asia-Pacific region.

FedEx has experienced strong average daily volumes from Asia, led by China with volume growth of over 50 percent every year. It currently covers more than 220 cities across China with plans to add 100 additional cities over the next few years.

According to FedEx it has 11 flights per week through Beijing, Shanghai and Shenzhen and plans to add new flights after a new bi-lateral aviation agreement was signed last week in Beijing, allowing American companies to establish core operations inside China for the first time.

UPS planned to open 20 new representative offices in China by the end of 2003. According to UPS, China’s export volume grew more than 40 percent during 2003’s third quarter compared to 2002 and average export volume climbed 15 percent during the quarter.

In 2004, the U.S. Department of Transportation awarded UPS the authority to operate six additional flights between Hong Kong and its intra-Asia air hub in the Philippines via Singapore, expanding capacity between three important trade markets.