Caixin
Jun 21, 2013 06:46 PM

CRC Reforms Pricing Regime for Shipping Goods

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(Beijing) – Eighteen companies under the China Railway Corp. (CRC) have put in place a unified pricing regime for shipping high value-added goods.

The reform went into effect on June 15. One of its key aspects was the implementation of unified pricing for the transport of goods such as household appliances and clothing. This means all 18 of the companies are to charge the same amount based on category, weight and distance.

Previously, customers had to pay other fees, such as station service fees and train use fees. These charges have been eliminated.

This move is an attempt to cut transport cost for customers and decrease rent-seeking behavior in the rail system.

Industries such as coal and steel have suffered with overcapacity, causing demand to transport these bulk commodities to slow. So the CRC is seeking other ways to boost demand.

The policy has been met with some criticism. The country's economy has slowed, which has made demand for rail transport fall short of supply at times, a source from the Taiyuan railway bureau in Shanxi Province said.

Considering this, unified pricing policy can be implemented smoothly. However when the economy picks up, the source said, it is unlikely that the policy will be carried out strictly because demand for rail services will rise again and the irregular fees will reappear.

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