The market value of China’s express delivery industry will reach CNY400 billion by 2020, Ma Junsheng, Director of the State Post Bureau, said. The revenue will represent an eight-fold increase on 2010, Ma said, and it is the fastest growing segment of the postal services. In the next decade, the overall revenue of postal services is set to account for 0.6% of the country’s gross domestic product (GDP), four times that of 2010. The Bureau vows to improve efficiency and quality, said Ma, adding that China Post is likely to rank among the top 100 in the Fortune 500 list.

SF Express, one of China’s largest couriers, has confirmed it is testing drone technology to deliver parcels. The test drone can fly to a height of 100 meters and has a navigational system that ensures it lands within 2 meters from a pre-set destination, the company said in a news release. Each drone is equipped with eight propellers and a hold where packages can be inserted, it said. The maximum load was not specified. “A drone can deliver parcels to areas with poor transport links,” said Chen Huan, Spokeswoman for SF Express, which is based in Shenzhen. The drone is not meant to replace manned services, as workers are needed in many areas of the drone delivery process, including designing routes, monitoring flights and picking up parcels at landing sites, the company said. Chen said the drone program is still in the early stages, with no timetable to launch the service. She added that it is too early to talk about prices, as many details still needed to be decided. “In fact, there are no regulations for drones as authorized transportation tools, and delivery service providers may need to wait for authorities to approve such business,” said Li Jun, Transport Industry Analyst for Nanjing Securities. Cost also needs to be considered as developing a drone with a precise positioning system and safety controls may require greater investment than using traditional vehicles.

People in Guangdong province are to be asked for ID cards when sending or accepting express deliveries to clamp down on illegal and dangerous packages in the mail. The move will be piloted in Huizhou and Zhuhai by the end of the year, according to the Guangdong Provincial Public Security Administration. The real-name requirement will be expanded to the entire province next year. Authorities have acted in the wake of an increase in the number of cases involving drugs and inflammable and explosive materials being found in the mail. Guangdong is the third area in China to introduce the ID requirement for express deliveries, after Zhejiang and Yunnan provinces. Guangdong handles more than 1.5 billion items of express mail a year. Shenzhen airport police seized 1,500 grams of methamphetamine, commonly known as ice, in an express parcel on its way to Shandong province on August 22, as well as 3.3 kilograms of ice in an express delivery to Shanghai from Huizhou. Last year, police from Guangzhou Baiyun International Airport intercepted more than 230 express parcels and letters containing drugs. “The names of the senders and receivers were all fake, which caused difficulties for police to detain the suspected drug traffickers,” said Wang Junke, Director of drug enforcement for Guangdong. On February 2, a courier and a woman receiving a parcel in Guangzhou were seriously injured when a package exploded. Police said the parcel, which contained explosive materials, was sent by the woman’s ex-boyfriend, the China Daily reports.

Increasing trade between China and Russia has prompted DHL to launch a an new intermodal service from Chengdu to Moscow via Poland. The new service comes as the outdated Trans-Siberian Railway fails to meet demand. Foreign trade between the two countries rose 11.2% to USD88.2 billion last year and is expected to rise to USD100 billion in 2015, before doubling to USD200 billion in 2020. However, logistical bottlenecks are becoming a drag on trade growth. The century-old Trans-Siberian Railway and the overloaded shipment facilities at the border city of Manzhouli in Inner Mongolia, account for 60% of the land transport between the two nations. DHL Global Forwarding started a weekly train-and-truck service from Chengdu to Moscow via Malaszewicze, Poland, on April 26. The dedicated freight train from Chengdu to Malaszewicze, dubbed the Chengdu Express, takes 14 days, followed by a truck service to Moscow in two to three days. This compares with at least 20 days via the Trans-Siberian Railway from China to Moscow, subject to delays. The punctuality of the western corridor from Chengdu was plus six hours or minus four hours while the trans-Siberian service could face delays of days, said Bruno Selmoni, head of road freight and multimodal, Asia Pacific, for DHL Global Forwarding. The company has operations on both railways. “We are looking into the Chengdu express train with a boarder perspective. Its potential is not just to Moscow but to the whole of Europe”, he said. DHL consolidated all the shipments from China in its cargo hub in Malaszewicze, from where it linked up with most European cities in two to three days by truck or train, Selmoni said. The train services are usually loaded with electronic goods from China and engineering machines on the way back. DHL has run an intermodal service from Shanghai to Moscow via the Trans-Siberian Railway since 2011, which it is still maintaining.

China is expected to surpass the United States this year to become the world’s largest market for express deliveries, but analysts warned of rapid development that ignores quality. Ma Junsheng, director-general of the State Post Bureau of China, said at an internal conference on July 18 that China’s postal industry maintained fast, steady development in the first half. He attributed the trend to national economic policies and booming e-commerce. Express delivery volumes grew more than 50% year-on-year in each of the past 28 months, the Bureau said. The number of packages delivered by major courier companies rose 61% in the first half to 3.84 billion items. Couriers’ revenue grew 34.5% to CNY63 billion. Xu Yong, Chief Consultant for the express and logistics website cecss.com, said China will probably catch up with the United States in terms of mail and package deliveries this year, estimating that 8.5 billion to 10 billion parcels will be delivered in China in 2013, compared with about 9 billion in the U.S. “However, we see China’s development in the express industry as too fast and unhealthy. The country’s express companies sacrifice profit and service quality to pursue volume,” Xu said. Chinese courier firms are making CNY16.4 on average from every parcel, down sharply from CNY28.6 five years ago. “Companies’ profit margins are down to about 5% from 30% a decade ago. Some of them are losing money,” Xu said. Meanwhile, delivery workers struggle with heavier workloads but low incomes, as customers complain about bad service, he said. Bad service and lost parcels were major problems in the industry, according to a survey conducted in March by the Legal Daily. “In addition, express companies also sometimes conducted misleading promotions, engaged in unfair competition and operated without licenses,” said Liu Junhai, Professor at Renmin University of China. Transport Minister Yang Chuantang said that Chinese postal and express companies have to aim high and work fast to catch up with international leaders. “Revenue from the domestic express industry is expected to triple by 2020,” he said. “But we should first improve the quality of the service.”