GLS partners with Chinese ZJS Express

By Zhou Siyu (China Daily) Updated: 2012-08-17 10:41

General Logistics Systems BV, an Amsterdam-based international logistics company under the British Royal Mail Group, announced on Wednesday a partnership with China's domestic express company ZJS Express to provide a business-to-business parcel delivery service from China to Europe.

The cooperation combines the two companies' networks and knowledge in either region, putting them in direct competition with the world's four largest logistics companies, including DHL Express, Deutsche Post-DHL's express division, the current leader in China's international express market.

"We are very confident and ambitious about the business in China," said Mark Thomson, managing director international of Royal Mail Group.

"We expect to become No 3 (in terms of market share) within the next three years."

The service, named Euro Business Parcel, is intended for cases in which extremely fast deliveries are needed and will take items between China and Europe in three to five days. That is one to two days longer than is offered by the current express services in China, but is 10 percent to 20 percent cheaper, according to the company.

China is currently the largest exporter to the European Union. In 2011, goods from China accounted for 17.3 percent of the EU's total imports, according to official data.

Over the past five years, China's exports to the EU increased by about 50 percent, leading to a rapid growth in China-Europe parcel volume over this period, industry data showed.

However, trade has accelerated at a slower pace in recent months. Data from China's General Administration of Customs showed that the country's exports to the EU declined by 0.8 percent in the first half of this year to $163.1 billion, while the country's overall exports increased 9.2 percent to $954.4 billion.

China's exports to the EU, which accounted for 20 percent of the country's total exports in 2010, fell to 17.1 percent in the first half of this year. Many economists and trade experts said the situation was unlikely to improve in the remaining half of this year.

But Thomson expressed no concerns over the decelerating rate of trade. Even given the slowdown, China's trade and economy is still increasing at a faster rate than other markets' and is "a great place for our business", he said.

In the meantime, the situation might also provide the companies with an opportunity, said Saadi Al-Soudani, managing director of GLS.

"Our product, which offers lower prices, is partly an answer to the economic slowdown as exporters are trying to control their costs," he added.

Industry analysts are optimistic about the market prospects for the two companies' cooperation.

"The timing of this cooperation will allow the two companies to take advantage of China's fast-expanding express market," said Cai Jin, chairman of China Federation of Logistics and Purchasing.

During the first half of this year, China's express industry handled a total of 2.39 billion items of express mail and parcels, up 51 percent year-on-year, according to data from China's State Post Bureau.

The industry's revenue increased by 39.7 percent year-on-year in the first half of the year to 46.8 billion yuan ($7.3 billion). Revenue from the international express business, meanwhile, jumped 11.8 percent year-on-year to 9.92 billion yuan during this period, official data showed.

zhousiyu@chinadaily.com.cn