Courier Industry Dilemma

Since last year, several renowned 1 domestic courier companies have been publicly expressing their dissatisfaction regarding rising cost due to hikes in fuel prices and labor 2 costs, including Shunfeng Express, ZTO Express Service Co. and Yuantong Express. They have claimed to rise their price to balance their sheets. However, few of these companies have charged more, in order to keep their customers while dacing fierce competition in the courier industry. What is the way out for these courier companies?

Zhang Wan 3 has more.

 

There is a saying about the dilemma 4 in the courier industry: being the first to increase prices is equal to suicide, but keeping prices low is just waiting for death. These aren't particularly attractive options, so they they claim that there have been dramatic price increases.

However, customers say they expect better service for higher prices.

"If the service worth the price, I don't mind paying for that."

Ms. He is a small business owner with Taobao.com, one of China's e-commerce platforms. In a choice between good prices and good service, she prefers good service.

"I expect better service, as when there is any problem with the delivered packages, it would be easy to check."

However, one expert says the service provided by those courier companies is still far from customers' expectations. This is Xu Yong from the China Communications and Transportation Association.

"Currently, there are surplus low-end service providers in the domestic market, but the middle and high end services are insufficient 5 to meet demand. Customers always say they want better service with lower prices, but there are few courier companies that can meet those expectations."

The rapid development of the courier industry in China has been spurred by the explosion of e-commerce in recent years. As these courier companies have yet to adequately prepare for a period of rapid development, the only way they compete with each other is through price wars. Therefore, supporting services and information systems are ignored by these companies, who are striving to walk with quicker steps to catch up with the booming e-commerce industry.

Alamusi from the China Electronic Commerce Association says higher prices won't necessarily bring higher quality of services. High standard services will be the only way out to strengthen the competitiveness of courier companies. And the future trend of the courier industry's development is to provide standardized 6 improved services that are well adapted to transport networks.

Some experts also suggest that the government set up an industry association, like the Express Delivery and Logistics Association which was established in the US in 1976, which has brought good regulation to a sector 7 that has developed global leading express delivery groups like UPS and Federal Express. They believe this industry association should play a dual 8 role as a regulator and a communication platform.

For CRI, I am Zhang Wan.