Caixin
Mar 10, 2020 07:15 AM
ECONOMY

China’s Package Couriers Face Mounting Operating Costs, Industry Group Says

A delivery worker carrying packages. Photo: VCG
A delivery worker carrying packages. Photo: VCG
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China’s package delivery sector is facing sharp increases in operating costs as transportation and temporary labor expenses jump amid the coronavirus epidemic, an industry official said.

The industry is running up against a labor shortage as some migrant workers are still unable to return to work and those who have returned from virus-hit areas need to be quarantined for a period before they start to work, Han Ruilin, secretary-general of the China Express Association, said Monday at a State Council press conference.

The shortage of protective gear has added mental pressure on workers, Han said. Mounting bills for rent, loan payments and labor costs, are putting courier companies under relatively high cash-flow pressure, he said.

As many villages and rural towns are still in lockdown, some couriers are not able to use their last-mile delivery facilities, such as smart package boxes, which affects delivery efficiency and customer experience, he said.

Fewer than 50% of smart package boxes, which allow users to receive packages remotely, are in use during the epidemic, said Liu Jun, deputy chief of the State Post Bureau.

The biggest challenge now is that couriers are not allowed to enter some residential complexes, said Li Jie, a courier at ZTO Express. He now delivers about 100 packages a day, compared with an average of 300 before the epidemic, he said.

Liu acknowledged the challenge but said the problem is gradually being resolved as more than half of the nation’s provinces have launched policies to allow couriers to enter residential complexes after their temperatures are checked.

The nation’s courier sector is expected to resume its full delivery capacity outside central China’s Hubei province, the epicenter of the epidemic, by mid-March, Hou Yanbo, deputy director of the bureau’s market monitoring division, said at the press conference.

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Some countries and global couriers have reduced flights to China, which has affected deliveries of international packages to the country. Hou said such restrictions have eased recently, and the State Post Bureau is working with foreign postal administrations, the Universal Postal Union and the Asian-Pacific Postal Union to showcase China’s effective epidemic fighting to eliminate other countries’ concerns.

FedEx on Feb. 20 listed 17 Chinese cities with suspended pickup and delivery services. As the number of new cases continues to decline in China, the courier has scaled back service suspensions in the country.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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