Japan’s Sumitomo Corp and Sagawa Express Co, jointly with China’s Shanghai Dazhong Transportation (Group) Co., will form a joint-venture company for express delivery service, the first of its kind in China.
Read MoreInternational express delivery companies are close to resolving a festering dispute with China’s postal monopoly that is threatening their business in the country, an industry association said Tuesday. Both foreign and domestic express delivery companies have been negotiating with China Post over new regulations that require them to stop handling letters and packages weighing under 500 grams, and register with the government body to continue their other businesses. Those rules are widely seen as an attempt to shield China Post’s own express delivery business, EMS, from competition by the likes of FedEx Corp. (FDX), United Parcel Service Inc. (UPS), DHL Corp. (X.DHL) and TPG N.V. (TP), which now operate in China through local partners. ‘We will reach an agreement fairly shortly,’ said Li Limo, president of the China International Freight Forwarders Association, a local industry group that is representing the express delivery companies in the talks. ‘Both sides will make some compromises,’ Li said.
Read MoreChina’s postal monopoly has extended its deadline for express delivery companies to comply with new restrictions on their businesses, in the first sign it may be softening its stance in a regulatory dispute with its competitors. China Post had issued regulations requiring all express delivery companies to stop handling letters and packages under 500 grams, and register with it to continue their other businesses. A notice in Monday’s People’s Daily extended the original May 6 deadline to June 15.
Read MoreCabinet approval Friday of part of a package of bills on postal service deregulation has heightened concerns among post offices in underpopulated areas about the possibility that they might suffer in fierce competition with the private sector.
The package of four bills is designed to allow private firms to offer mail services and establish a new public corporation to take over the existing postal services: mail, postal savings and life insurance.
Sumitomo Corp. and Sagawa Express Co. said Friday they will form a joint venture with a major Chinese trucking firm in July to launch cargo delivery services in Shanghai and surrounding areas.
The joint venture will be China’s first door-to-door parcel delivery company, Sumitomo and Sagawa said.
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