SHANGHAI Aug 14 After years of waiting, United
Parcel Service Inc (UPS) and FedEx Corp have
received licences in China to extend domestic express package
services to Beijing and other cities without needing
The U.S. companies had been waiting for permission to
independently courier packages from businesses to consumers
(B2C) via their entire Chinese networks, since a 2009 postal law
largely restricted foreign firms to delivering packages from
The licences 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 ($46 billion), said consultancy Deloitte.
"We now have 33 licenses," UPS President of Global Public
Affairs Laura Lane told Reuters. "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."
FedEx received 21 licences in May, returning its total to
the 58 it held before the 2009 law, a spokesman told Reuters.
Each licence permits the holder to operate B2C domestic express
package services within a single city and between cities for
which a licence is also held.
"We have been working closely with the relevant authorities
to obtain the express delivery services permits for our
business," the spokesman said. "So far we have received all the
permits for our domestic business."
Neither company has disclosed the size of their businesses
in China, where since 2009 they have mainly handled documents
and packages to and from overseas. But both companies have cited
China as one of their fastest-growing markets.
UPS and FedEx had to reapply for licences to offer domestic
B2C services after the law changed. In 2012, the pair were
granted their first five and eight respectively. FedEx was able
to continue offering services by entering joint ventures with
But even at full strength, UPS and FedEx still face daunting
competition in state-backed China Post and large, privately run
rivals such as Shentong Express and S.F. Express.
Seeming willingness among private services to cut margins to
win customers also constitutes a challenge. Deutsche Post AG's
DHL courier service pulled out of its money-losing
China domestic delivery business in 2011 citing a lack of cost
UPS's Lane said allowing greater competition would help
improve standards across China's logistics industry.
"With greater competition there's always the beneficial
effect of raising the professionalism and quality of services
that consumers come to expect," Lane said.
(1 US dollar = 6.1520 Chinese yuan)
(Reporting by Brenda Goh; Editing by Christopher Cushing)