The State Post Bureau of China is preparing to launch in August the country’s first rating standard for express delivery companies, an expert from the Logistics Association of China told the Global Times on Monday.
The bureau completed its review and passed the draft version of the rating standard and management method for express delivery companies last Thursday.
The standard will rate express delivery companies into four grades, from two star to five star, based on their size, coverage, market share, IT application level and service quality, Li Xin, an analyst at the Logistics Association of China, told the Global Times.
The ratings of the express delivery companies will be reviewed and revised regularly.
“The standard is very important. On the one hand, it can regulate express delivery companies and improve their services. On the other hand, it can urge the companies to rise above the current cycle of low-price competition with similar services,” said Qi Hui, an analyst at market research firm China Express Consulting.
Currently, the express delivery industry is beset by low price competition. Costs of labor and transportation are rising, while consumers expect lower and lower price, squeezing out the profit margins, Qi said.
Also, the service levels among different companies have no major differences and are low in general. Losses, delays and damages are common in the industry. Incidents of internal theft can also be read in the media, Qi noted.
“With the introduction of the rating standard, express delivery companies can adopt a varied pricing system based on different service levels. Customers will also have more freedom when they want better services,” Qi said.
According to statistics from the State Post Bureau, express delivery companies with the annual operating revenue of over 2 million yuan ($310,338) delivered 1.58 billion parcels in the first half of 2011, an increase of 52.8 percent compared to the same period last year.
The total revenue for the industry reached 33.52 billion yuan in the first half, up 26.5 percent year-on-year.