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October 26, 2021

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Delivery rates for e-commerce firms raised to protect couriers

Leading courier firms have raised delivery charges for some e-commerce sellers to “regulate the market price” ahead of next month’s Singles Day shopping spree.

Key courier operators, including Shanghai-based ZTO, YTO, and Yunda, as well as the Indonesia-based J&T Express, have announced price increases for some online sellers “who have long been enjoying low-cost delivery services.”

Charges for individual customers won’t be affected by the current round of price adjustment, the courier firms said in their statements.

Due to fierce competition, delivery rates for some e-commerce vendors have long been far below the actual costs to the courier firms, despite increasing labor and operational costs, ZTO Express said.

“The phenomenon has not only disturbed the market but also severely affected the stable operation of franchise outlets of courier firms,” it said.

“The price adjustment was introduced ahead of peak season to ensure sustainable quality services to customers.” Singles Day is November 11.

YTO Express said the price increase only targets online vendors paying lower rates than courier companies’ operating costs. The prices for individual customers remain the same as listed on the official website.

A YTO official said a price increase of less than one yuan would impact prices of online products, but only slightly affect online vendors’ profits.

Price competition among delivery firms has forced many outlets to operate with marginal profits, or even below cost. YTO has stepped in to stop the price war and return to the market standard, the official said.

Yiwu, in neighboring Zhejiang Province, known as the world’s biggest hub for small commodities, was once the main battlefield in the price war among courier firms. It is the region most affected by the price changes.

“The delivery price for small commodity vendors in Yiwu was extremely low because the courier firms aimed for a bigger market share there,” the YTO official added.

The increase is also part of efforts to ensure the “lawful welfare” of the nation’s large group of delivery workers spawned by the world’s largest e-commerce market. Seven ministries and government bodies released a guideline in July to protect the welfare of delivery staff.

In late August, several courier firms announced pay increases for grassroots delivery employees by 0.1 yuan (1.5 US cents) for each package. As a result, delivery workers’ monthly salaries are expected to increase by 500 to 1,000 yuan, depending on the number of packages they deliver. Costs to consumers were not affected.

Some courier firms such as YTO also insist the additional charges must benefit each delivery employee and cannot be pocketed by franchisees.

Over 300 million packages are delivered across the nation every day.


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