China’s Draft Postal Law Denounced

Friday, October 6, 2006 2:56
As just reported by Forbes and MSNBC, the 8th rendition of the upcoming Postal law has been “denounced” by international and local firms alike.

Part of an ongoing to reform and privatize China Post, the main concern is centered around the ability of firms to deliver express letters and packages, or if China Post will retain their right to monopolize this market.

Those that have seen the draft law (apparently, it was not provided to all), say that the bar has been set at 150g (1/3 pound).  A compromise from the current 350g level, local and international firms alike are obviously disappointed, and many fear that this will have a long term impact on their operations.

This law, if passed as is, will have impact different organizations in terms of severity with local inter-city express delivery companies at the highest risk category given their small size of operations and concentration only on small packages. International express carriers will not see as severe of an impact as this was a market that they have “officially” been locked out of anyway.  The primary impact though will come in terms of product and infrastructure development as firms like DHL, UPS, and FedEx build air inner-China routes.

Thinking out of the box though, it is unlikely that even if the law is passed it will be enforced.  The fact is that while China Post does have the best infrastructure in China, it is not capable of handling the volume that would hit their system should the law pass.

Local express packages are delivered through small mom and pop motorcycle companies for two reasons, they are quick and cheap.  within 20 minutes of a call, my local express carrier will show up and will provide an on the spot quote based on weight and when I want the package delivered.  He has a network of people that can move samples to Xiamen, Wuhan, and even Hong Kong, and I can even tell him next day, 2 day, or whenever. I have a hard time believing that China Post is ready, capable, or willing to provide such a service, and as such, enforcement will (like several years ago), only be reserved when a show of force is needed.

More to come I am sure

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One Response to “China’s Draft Postal Law Denounced”

  1. All Roads Lead To China » DHL Keeps Shanghai on its Toes says:

    May 14th, 2007 at 8:21 pm

    […] Interesting he didn’t mention the long await release of China’s New Postal Law…. and its potential impact on the letter business… or Labor law… which could significantly change their HR cost equation depending on what comes out of the shoot. […]