Express operators win postal dispute break

PUBLISHED : Tuesday, 03 September, 2002, 12:00am
UPDATED : Tuesday, 03 September, 2002, 12:00am

The State Council has suspended certification requirements for express operators working on the mainland, but carriers are viewing the move as temporary and subject to change.

The council shelved a mandatory 'entrustment' demand that would have forced China Post competitors - domestic and foreign - to charge more than the state carrier for transporting parcels more than 500 grams.

The mainland's highest body did not set a new deadline for the certification.

An industry executive said: 'The council released a memo stopping enforcement of entrustment requirements with immediate effect until next year's company registration in April.

'We don't think the suspension is open-ended; we expect new announcements. But things as they sit now effectively make the State Post Bureau the regulator of international freight forwarders and express operators.'

In a memo to the State Post Bureau on July 4, the council set a definition for private letters - delivery items the bureau considers to be in its exclusive domain.

It said private letters excluded 'documents, notices, non-private receipts, securities, manuscripts and printed matters', but one executive said the definition was so wide the impact of the announcement was mooted.

However, the memo did not reverse the 500-gram restriction imposed by the bureau as earlier media reports suggested.

In June, the council had to enter the fray after the Ministry of Foreign Trade and Economic Co-operation (Moftec), which governs the freight-forwarding business, and post bureau overseers, the Ministry of Information Industry (MII), were unable to settle a jurisdictional dispute.

Forwarders on the mainland claimed the MII lacked the authority to hive off the under 500-gram market, a lucrative sector, for the bureau's Express Mail Service.

The China International Freight Forwarders Association, which represents about 540 firms, claimed the restriction would render its members uncompetitive in a market responsible for about 60 per cent of their revenue base.

International express operators such as Federal Express, United Parcel Service, DHL Express Worldwide and TNT International Express are being represented in the dispute by the Confederation of Asia-Pacific Express Carriers (Capec).

However, it appears to lack the clout to negotiate or even to keep itself appraised of developments.

'We've not been able to establish formal communications with Moftec or the State Post Bureau,' the executive said.

'Nor are we privy to the lobbying that is going on behind the scenes by the European Union or the Office of the United States Trade Representative.'

As such, Capec waits for the infrequent and often opaque missives released by the council through the state media.