One of the things that fascinated me most about this city was its express delivery network, a service that I had used quite often to send letters/ packages across town, but paid little attention to as the people behind it seem quite decentralized and rarely cared to say anymore more than “sign here”. Then, a couple years while wondering why so many people seemed to be hanging out near the turnstiles of the metro station, I realized something.
That, in addition to handling millions of riders a day, the Shanghai metro system was in fact the backbone for moving Shanghai’s express packages around, and that the people hanging out by the turnstiles were in fact collecting and distributing packages and letters that were moving through the system. Over time, as my eyes adjusted and my time on the metro increased, I began to see that there were more actors in play. You had runners who would move the packages from the originating office to the metro, to dedicated metro runner who did not more than run packages from the turnstiles to the the train carriages, and then the person who rode the metro all day long making the hand off.



It was a hive of activity that was low costs, and had the potential to move packages across the country!
Over the course of a week, as part of a program to shake things up and open their eyes to Shanghai, I sent out 2 of my local staff to check it out and report back to me just how this system worked. To work out not only the logistics behind the network (my original interest), but to see how the various actors made money (my initial assumption was that they were all independents) and how much was moving through the system.
Structure:
Contrary to my initial thoughts, the first day showed that the system was quite organized, and that there were between 3-5 companies that were largely in control of the majority of packages (there are some independents), and much like any other firm, these groups have develop a networks of branches to service their high traffic areas.
Line 2 is the money line. Hongqiao, Nanjing Road, Bund, Lujiazui, and Century Ave. commercial districts produce volume from from Century Avenue to Loushanguang/ Zhongshan park areas, and a decent chuck moves along line to the Xintiandi and Xujiahui areas as well. So, what you have are hubs that are spread out along those stations… Dongchang Road, People’s Square, Nanjing West, Zhongshan Park, and so on.


The Actors
To support this network requires a lot of people, and it is labor intensive
In the office: Boss (Laoban) and dispatchers man the desks, scan packages into the system, and schedule
Above ground: Runner (Ban Yun Gong), delivery men (Kuaidi Yuan), and sales people (yewu yuan)
Underground: Internal dispatchers (Ji Zhang Yuan)and metro riders (Di Tie Kuai Di Yuan)

The Flow:
As you may imagine, moving a few thousand packages a day over a network of 15 or so people requires a semi-manageable process, and contrary to my initial assumptions it is one that is actually tracked over the entire process through hand notes and a scan once it reaches the branch.
Once received, the package essentially enters the system and hits its first sort (near or long distance). If nearby, the package is taken to the branch for processing, and then carried by another runner to that area. Each runner will have a territory much like a standard delivery service provider. If the packaged is one that needs to be moved from the immediate area (cross town or across China), it enters a different system (as seen in the flow chart below).
The Costs:
Anyone who has used a kuai di service provider knows that everything is negotiable and that this is a cut throat market. While studying the traditional express market several years ago, we were locally very interested in seeing how these groups worked as well.. and it is all word of mouth and by mobile phone. So, the best salespeople give secretaries the best discount.
Outside of that though, it is a geography based system (no surprise) and the distance will determine the speed of delivery (no surprise there). for intercity deliveries, sending before lunch will essentially guarantee a same day delivery, but anything after lunch will “depend” on a few different factors (you can pay extra for priority service with some providers). For service outside of Shanghai, it appeared that any 2nd/ 3rd tier city could be serviced next day, but anything beyond that was anyone’s guess (I once sent a package to the furthest reaches of Jiangxi province that took 3 days).
So there you have it. Shanghai’s kuaidi network.
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