Coronavirus: China’s courier sector braces for losses as outbreak snarls supply chains

Some 65 per cent of China’s courier businesses forecast losses this year as the coronavirus weighs down the economy

Road closures, flight cancellations and workforce limitations have made the resumption of operations difficult for most firms

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A delivery worker wearing a protective face mask at a red light in Beijing. Photo: AFP

Published: 6:15pm, 27 Feb 2020Updated: 10:58pm, 27 Feb 2020

SF Express, one of China’s biggest couriers, hit a home run in January keeping operations open over the Lunar New Year holiday when most businesses closed for one of the country's most important festivals while the spread of the novel coronavirus gathered pace.

While mainland China’s express delivery sector suffered a 12 per cent dive in revenue last month, the company posted a 14.4 per cent increase to 11.6 billion yuan (US$1.6 billion) on the back of a 40.4 per cent jump to 566 million bills in transaction volume, according to data from the State Postal Bureau and the company.

The demand for express delivery for everything from daily necessities to medical supplies has been on the rise in China as the coronavirus keeps people holed up at home.

As the virus has spread from the central Chinese city of Wuhan, authorities across the country have imposed sweeping restrictions on transport, curbed shop hours and locked down entire cities home to tens of millions of people.

Some companies have introduced “contactless delivery” and even started using robots to drop off orders to consumers, cutting out human-to-human contact.

Yet SF Express’ double-digit revenue growth in January is hardly representative of the industry going forward – at least in the short term.

An industry survey conducted early this month showed that 53 per cent of respondents said it was difficult to resume normal operations in the short-run, and it was especially hard for small and medium-sized enterprises (SMEs).