FedEx Gets Fined For Violating China Post Monopoly

Thursday, October 23, 2008 7:31
Posted in category China Logistics

In 2001, while I was interning at UPS, China was a region that my business unit was monitoring closely. The market was still closed to anything but joint ventures, and the law were strict in many categories of “logistics”

Over the course of several months, tensions were high because China Post was flexing its muscles a bit.  FedEx, TNT, DHL, UPS, and Airborne were restricted from accepting or delivering letter pouches in China.  That was the role of China Post then, and it is still their legal monopolitic right to this day.

But that didn’t really stop anyone then… and it hasn’t really stopped anyone now.

However, during that summer, to prove their point, the inspectors from China post would confiscate a few bags every once in a while. It was never for very long, but the point was pretty clear, and it unnerved some customers at the time because typically the documents are either important or sensitive.

Currently under investigation for dumping (they have lowered prices 5 times this year), FedEx apparently has fallen into an old trap as they have been fined 3000 RMB for delivering packages that China Post has a legal monopoly over.

With the fine only 3000 RMB, I am farily sure that FedEx paid the fine without contest, but my guess is that behind the scenes others are worried that we may see a repeat of the summer of 2001…

Margins are also high for “document” delivery which could include letters – and this means the major foreign express couriers including FedEx, DHL and UPS as well as domestic private companies are all very likely to be involved in the business.

Perhaps China’s postal regulations are about to be finalized?

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One Response to “FedEx Gets Fined For Violating China Post Monopoly”

  1. China Journal : Best of the China Blogs: October 24 says:

    October 24th, 2008 at 12:05 am

    […] enforcement? FedEx ran afoul of China Post’s often-ignored monopoly on package deliveries, and had to pay a fine of 3000 yuan (about $440). [All Roads Lead to […]