Zhou Jianping, head of a Beijing-based foreign trade company, has tried many different express delivery companies. He complains of the time he wastes on routine daily trips to two different express delivery services: say, one to a FedEx outlet for global delivery and another to a post office for domestic delivery.

Companies abroad are much luckier, says Zhou, because they have FedEx, UPS, TNT and DHL, and the large, far-reaching global networks these services provide. Chinese companies usually have only one choice: EMS, an affiliate of China Post.

"It will be much more convenient if those international companies launch domestic services in China," Zhou told Beijing Review. "In that case, one trip is enough."

Fortunately for Zhou, though the big international names haven't jumped into the domestic express services market in China, that is set to change.

Speedy delivery

FedEx Express, a subsidiary of FedEx Corp., announced on March 20 the launch of its first guaranteed domestic next-business-day express delivery service in China, becoming the first foreign business to debut time-definite delivery service in the country.

The new domestic service, expected to be fully operational in June, will serve China's burgeoning market with next-business-day, time-definite delivery service to 19 cities including Beijing, Shanghai, Guangzhou, Dongguan, Foshan, Fuzhou, Hangzhou and Nanjing. Real-time package status tracking will let customers know where their shipments are every step of the way.

"With next-business-day, time-definite delivery service, we'll fetch your packages at the end of the working day and deliver them to their destinations before noon the following day," explained Chen Jialiang, president of FedEx's Chinese operations. "Beside this, we will also provided day-definite service to more than 200 other Chinese cities, with packages guaranteed to arrive in 24 hours."

FedEx also announced that Hangzhou will serve as its transport and shipment hub, and domestic carrier Okay Airways will be the carrier for air cargo shipments. "We had planned to build a more powerful transshipment center in Hangzhou, but we can't wait two or three years for the center to be ready," said Chen Xinxiao, Vice President of FedEx's China domestic business. "The market is exploding."

Deng Bohua, President of FedEx's global business, said China is the focus of FedEx's express delivery business in Asia. "Beside the trans-shipment hub in Hangzhou, we started the construction of our Asia-Pacific Transport Distribution Center in Guangzhou last January, which will definitely integrate China into FedEx's global network," Deng said.

Currently, the focus of FedEx business in China is international express delivery, sharing 70 percent of the market with DHL, UPS and TNT. In late March, FedEx Express already had 30 weekly U.S.-China shipments, the most of any cargo carrier.

Further, faster

With China becoming the world's second largest air cargo transportation market in 2005, the domestic express delivery business is also being viewed as a market of enormous potential. A rivalry between the big four-FedEx, DHL, TNT and UPS-was spawned after policies were relaxed allowing foreign companies to form wholly owned subsidiaries on December 18, 2005.

TNT, the first to jump into the domestic fray, has withdrawn because of high costs. DHL and UPS also launched domestic services in China, but rising costs due to limited amounts of cargo have kept their business in the red.

Currently dominating the market is China Post's EMS, as well as a number of private companies represented by ZJS Express. According to Liu Heping, a veteran businessman with 13 years' experience in the express delivery service, China Post now holds the lion's share of about 60 percent, while private sector carriers hold 25 percent and foreign enterprises round out the last 15 percent. Liu now serves as the Vice President of Shanghai-based Dongfang Wanbang Express.