Suspended operations, price hike, and delays: the express delivery industry slows down during the Spring Festival

by youtong8876 on 2012-02-12 21:55:21

Chongqing MM home service. Affected by this, e-commerce companies also made a big fuss, registering their courier adjustment arrangements in prominent positions on their online stores. When the reporter logged into the most popular Tmall Mall, it was found that more than 80% of the online stores were either closed or only provided delivery services through two courier companies, SF Express (Weibo) and EMS during the Spring Festival. The new rule of "not closing for business" during the Spring Festival is almost meaningless in name only.

"Many of the employees responsible for sending and receiving packages are from other places, and they all want to go home when it's time for the New Year, making it hard to retain them," said the boss of a franchise express delivery network point to the reporter. He said that their network point's profit margin was originally not high, and temporarily hiring people at high salaries during the Spring Festival would increase the cost of sending packages, not only increasing costs but also carrying certain risks. "In fact, the capacity of the sorting center of the branch to handle mail is quite limited, and they also worry about our closure during the Spring Festival."

However, there are many blind spots in the implementation of relevant policies. "Before the Spring Festival, merchants promote sales, and daily business volume increases several times to reach a peak, but it will quickly decrease afterward. If we invest in expanding transportation capacity and arrange a large number of staff just for this stage, its operating cost will not only be significantly spread out, but it is also difficult to catch up with the increase in online shopping volume," said a person in charge of a courier company who wished to remain anonymous to the reporter. Moreover, except for SF Express and EMS which adopt direct operation, most domestic cross-regional enterprises use a franchise model. This means that the headquarters of courier companies does not have a direct capital relationship with most regional outlets, and cannot use mandatory measures to require all outlets under its umbrella to operate uniformly during the Spring Festival.

As the Spring Festival approaches, affected by factors such as tight transport capacity and insufficient manpower, conflicts between service capabilities and market demand in some areas become more prominent. Among these, regions with less pressure on collection services are located in the southeast, northeast, south, and west; while regions with greater pressure on delivery services are in the northwest, southwest, north, west, and central-eastern parts of China.

In this situation, SF Express and postal services became the two main companies supporting courier services during the Spring Festival. Although SF Express announced on its official website that it would continue operations during the Spring Festival, reporters learned that its door-to-door collection service would charge an additional 10 yuan service fee, and delivery times may be extended by 3-7 days. In some areas, EMS could not guarantee delivery before the New Year.

Express consultant Xu Ji expressed that although the State Post Bureau has introduced multiple measures to rectify the express market, there are still some deficiencies in detailed regulations in the current regulatory focus. How to define "closure" remains questionable. For example, some express companies claim to have employees on duty, but they only deliver packages without collecting them, or even just handle user complaints. Regulatory departments need to establish specific standards for such behaviors.

On December 31st, 2011, the Express Association of the People's Republic of China issued the "Guidelines for Express Services During Legal Holidays in the Spring Festival", requiring the express industry to "rest but not close". Courier outlets must maintain parcel delivery services for no less than six hours during the Spring Festival. This is the first time the express industry has issued service guidelines specifically for holidays. At the same time, the official website of the State Post Bureau released the "Notice on Strengthening Supervision of Courier Services During Peak Seasons", requiring courier companies not to suspend operations arbitrarily during the Spring Festival, otherwise "those who suspend operations without authorization will lose their licenses."

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"The company has basically stopped collecting parcels now, especially within the province, mainly handling accumulated mail from the previous period." A courier revealed to the South China Morning Post that the packages piled up in the Guangzhou sorting center of his company were like mountains, and the warehouse had no room left. It is expected that most of the mail will have to be arranged for delivery after the Spring Festival holiday. Their outlet may be closed for a few days during the Spring Festival, and the delivery service will also be suspended at that time.

The Southern Metropolis Daily contacted the customer service of Tongwei Express and learned that Tongwei Express has also stopped collecting parcels in many areas, including second and third-tier cities. Most parcels can only be sent back to foreign countries and some inland cities, and "the delivery time cannot be guaranteed." Meanwhile, in order to control the volume of mail, Tongwei Express has temporarily increased the cost of all parcels, with the charging standard being three times the usual rate. The Southern Metropolis Daily learned that a package sent from Shenzhen to Guangxi usually costs 15 yuan, but during the Spring Festival, it was raised to 45 yuan.

To cope with the wave of courier companies closing during the Spring Festival, large online merchants are trying to find their own solutions. On the evening of January 16th, JD.com (Weibo) was the first to announce on its official Weibo account the opening of subway self-pickup points in Beijing. Users can choose either courier delivery or pick up their items at the nearest subway station. Currently, this service is limited to 20 stations on lines 5 and 10 of the Beijing subway.

According to the latest market supervision data from the State Post Bureau, from January 2nd to January 11th, the highest daily business volume of express deliveries was 15.6 million pieces, an increase of 45% year-on-year. Among them, the top ten cities ranked by daily parcel dispatch volume are: Shanghai, Guangzhou, Hangzhou, Beijing, Shenzhen, Suzhou, Jinhua (Yiwu), Dongguan, Jiaxing, and Ningbo; the top eleven cities ranked by daily parcel receipt volume are: Shanghai, Beijing, Hangzhou, Guangzhou, Shenzhen, Suzhou, Nanjing, Dongguan, Wenzhou, and Wuxi.

Franchise system exploits loopholes in "closing" rules

Southern Metropolis Daily reporter Tian Henli

Today, the Southern Metropolis Daily visited the business outlets of several express delivery companies located in Guangzhou and found that although some express companies were still open, they had stopped collecting parcels. An online schedule for the Spring Festival holiday showed that most express companies would take a break from January 21st to January 29th and stop their delivery services, resuming normal operations only after January 30th.

"S.F. Express + EMS" alone supports the market

Affected by this, many online stores also "called off the gongs and drums." According to the official online store on Taobao, from January 16th to January 20th, this online store only used SF Express or EMS for delivery. During the early Spring Festival period, it would only send via EMS, without handling pre-sale services. Not until January 30th would this online store resume normal shipments. However, the Gracia leather goods online flagship store stated that customers purchasing branded products during the Spring Festival would also need to pay the premium prices for EMS and SF Express.

Despite the new rules issued by the State Post Bureau requiring express companies not to close during the Spring Festival, as the Spring Festival approaches, many express companies still quietly shut down.