UPS, FedEx get domestic express licenses
AFTER years of waiting, United Parcel Service Inc and FedEx Corp have received licenses in China to extend domestic express package services to Beijing and other cities without needing joint-venture partners.
The US companies had been waiting for permission to independently courier packages from businesses to consumers via their entire Chinese networks, since a 2009 postal law largely restricted foreign firms to delivering packages from abroad.
The licenses increase access to a market second in size only to the United States. Thanks to online shopping, the Chinese market is growing 60 percent annually and next year could be worth 280 billion yuan (US$45.5 billion), said consultancy Deloitte.
“We now have 33 licenses,” UPS President of Global Public Affairs Laura Lane said. “The government just approved them in May,” Lane said, referring to UPS’s latest 14 licenses for cities including Beijing, Wuhan and Hefei.
“We’re really looking at developing those capabilities in those 33 cities, expanding our investment,” Lane said.
“But we haven’t developed a concrete plan yet in terms of where we want to go beyond those 33 cities,” she said.
FedEx received 21 licenses in May, returning its total to the 58 it held before the 2009 law, a spokesman said. Each license permits the holder to operate B2C domestic express package services within a single city and between cities for which a license is also held.
Neither company has disclosed the size of their businesses in China.
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