Air China Cargo continued last year to suffer from weak demand and overcapacity in the market. The unit, in which Cathay Pacific Airways has a 49% stake, saw losses of CNY349 million. Cargo yield, or the revenue for every ton per kilometer, dropped to CNY1.57 from CNY1.69. The carrier ferried 1.46 million tons of cargo, down 0.3% on the year.

A new parcel delivery service based around a mobile phone application that pairs customers with freelance couriers is growing in popularity in Shanghai. It is also being closely monitored by the Shanghai Postal Management Bureau to ensure there is no disruption to the order of the industry. The app, known in English as “Everyone’s Express,” has been developed by RRKD Express and makes it possible for anyone over 18 with a GPS-enabled mobile phone to work as a courier. Customers pay between CNY15 and CNY35 to have a parcel delivered in the city, with the courier taking 80% and RRKD 20%. The company promises delivery within the hour, and if there is a delay customers are free to deduct a percentage of the due payment. It accepts parcels valued up to CNY500. Traditional courier services charge between CNY5 and CNY12 for a cross-city next-day delivery. Xie Qin, Founder of RRKD, said the company has applied to the Postal Bureau for a courier license. It has already been given approval to operate in Sichuan province. RRKD now has 100 franchises, about 5 million users and more than 1 million couriers, Xie said, as reported by the Shanghai Daily.

After years of delivering parcels, business documents and university applications between China and the rest of world, major international carriers have changed their tactics to offer more upgraded services such as the conveying of healthcare products, precise parts for aircraft manufacturers and high-end foods in China’s fast-growing express delivery market. Many of these opportunities come from China’s soaring economy and application of information technology. Frederick Smith, Chairman and CEO of FedEx Corp, said FedEx has found new market growth points in China’s high-end manufacturing industry, such as providing timely delivery of airplane parts and industrial equipment from developed markets to China, as well as expanding its facilities for health-related products at its Shanghai international hub. As the operator of the world’s largest cargo airline, FedEx has continued to work with Shanghai Airport (Group) Co to establish an upgraded international express and cargo hub in Shanghai. After its completion in 2015, the new hub is expected to more than triple the capacity of the current FedEx facility in Shanghai, allowing it to process up to 36,000 documents and parcels per hour. With an investment of more than USD100 million, the new hub in Shanghai is a major step to expand the FedEx network and service offerings throughout the Asia-Pacific region. In China, FedEx has more than 9,000 employees and operates more than 110 service stations. Rival United Parcel Service (UPS) is also looking to maintain the upper hand in China’s rising delivery market for healthcare products and is planning to add another 14 inner-city express services in the country this year. UPS is expanding in the healthcare logistics field, the China Daily reports. UPS has expanded urban express services to 19 first- and second-tier cities in 2013 and expects to reach 33 cities by the end of this year. The company operates 208 weekly flights connecting China to the U.S., Europe and destinations across Asia.

Domestic express delivery services are getting a business boost from the explosive growth of e-commerce and using that revenue stream to expand their cargo fleets, but they are also watching out for international logistics firms moving further into the Chinese market. Shenzhen-based SF Express (Group) Co, Shanghai-based YTO Express Co and state-owned China Postal Airlines are buying and leasing more aircraft, renting warehouse space at airports and expanding their delivery options to meet growing competition from global delivery services. Li Sheng, President of SF Airlines, the air service branch of leading package service SF Express, said the company is buying and chartering more cargo freighters to offer better services to its clients. It acquired four cargo aircraft from Boeing last year, taking its fleet to 33 planes – 14 owned and 19 chartered. It plans to buy another 11 aircraft by the end of 2015. It already has 240,000 employees, more than 11,000 delivery vehicles and 7,600 service points around the world. Hou Hanping, Professor of Logistics Management at Beijing Jiaotong University, noted that many factors are affecting the industry: an expanding economy, the use of information technology and the rising urbanization rate in China. Those factors mean more segmented and sophisticated markets for delivery services. Rising e-commerce lifted China’s express shipping market by 37% to CNY144 billion last year, according to the China e-Business Research Center based in Hangzhou, Zhejiang province, the China Daily reports.

During the bimonthly session of the National People’s Congress Standing Committee in April, lawmakers reviewed a draft law on the protection of waterways. According to the draft, the punishment for destroying waterways will be enhanced, and those responsible for illegal construction could face fines of up to CNY1 million. Xie Manying, Deputy Director of the Waterways Transportation Bureau with the Ministry of Transport, said that China’s inland waterways have shrunk from 170,000 km 50 years ago to 130,000 km due to lack of protection. Local governments often blame funding shortages for failing to maintain waterways.