3 international players join domestic express delivery sector

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Three international logistics service providers have been allowed to enter China’s booming domestic express delivery market, State Post Bureau announced in a notice.

UPS, FedEx and DHL were the only firms allowed to offer domestic shipping services in some cities prior to the announcement on Wednesday.

Kerry Logistics, Yamato Holdings and Overseas Courier Service got the go-ahead to officially obtain a domestic express delivery license after the notice period ends on Dec 23. Kerry Logistics applied to operate express services across 18 cities while Yamato Holdings sought to run its business in six. Overseas Courier Service plans to operate in 20 cities.

In September, China’s State Council, the cabinet, decided to further open the express delivery market to foreign investment, though the competitive sector is already filled with domestic suppliers.

Yu Weijiao, chairman of YTO Express, said profit margins have dropped to its lowest point in China, about 0.5 yuan (8 cents) per business, with costs still on the increase.

Yu expects big changes in the express deliver market during the next three years, according to 21st Century Business Herald.