Fedex Vs Ups In China

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The rising share of foreign businesses in China's delivery market could toll the demise of less prepared domestic carriers¡@A staff member of a post office on Sichuan Lu in Shanghai checks an EMS delivery vehicle.

EYEING the huge potential market of China, express delivery companies, foreign or domestic, have been racing against each other for a bigger bite of the cake.

A United Parcel Service (UPS) plane touched down in Shanghai on April 3 on its first direct flight to China, 12 years after the Atlanta-based company began its operation in the country.

The express carrier and package delivery company thus became the fourth US carrier, following Northwest Airlines, United Airlines and Federal Express (FedEx), to operate a direct flight to the Chinese mainland.

UPS believes the direct air route to China is one of the most critical links to its global network, claiming that its goal is to deliver to every city in China by the end of 2001.

UPS will operate six Boeing 747 flights a week between the two countries. The new service is expected to generate about $100 million in revenue for the company in its first year of operation.

The company had to serve the mainland market through Hong Kong in co-operation with Sino-trans, its China-based partner, prior to being granted direct air rights by the US Department of Transportation (DOT) in January.

Grabbing about 5 per cent of China's express delivery market, UPS posted a 45-per-cent growth in 2000 over the previous year in its China business.

Yet UPS' seemingly formidable move hasn't created much stir in local express delivery businesses, including express mail service (EMS) operators under the loss-sustaining State Postal Bureau (China Post).

"Foreign companies are mainly engaged in international cargo delivery services which are much more lucrative than...