Couriers play vital role in success

"Double 11' rush prompts firms to add warehouses, vehicles, staff to handle orders

Careful planning by logistics companies across China played a key role in making this year's Singles' Day shopping festival another huge success.

According to officials at Alibaba Group Holding Ltd's major online marketplace Tmall, it worked closely with 13 courier firms in setting up more than 150 distribution centers, covering more than 2 million square meters of space, to manage the consumer-spending onslaught.

Shanghai Yunda Express Co, one of China's largest logistics companies, said it started its Singles' Day preparations in early October in anticipation of a 20 percent rise in business.

The company added 1,000 delivery vehicles to its existing fleet of 20,000, and hired 10,000 more staff to its current 80,000 workforce. And it rented an additional 50,000 sq m of warehouse space to cope with the surge in packages.

With cross-border online sales expected to rise significantly this year, Yunda said it has also been working closely with delivery platforms in the United States, South Korea and Japan to provide better delivery services for overseas customers.

Elsewhere, too, companies beefed up their operations in preparation for Nov 11.

Wang Wei, president of the Shenzhen-based SF Express, another major operator, said the company had not set any exact handling targets for the day, stressing instead that the quality of its customer service was more important than anything.

SF is the cooperation partner in China of US warehouse retailer Costco and Wang said its network is increasingly international with services already in place to handle business orders to the United States, Japan, Singapore, Thailand, Australia, South Korea, Malaysia and Vietnam.

It also launched delivery services for individual customers in August, to Hong Kong and the US, meaning the company is now able to compete directly with the world's leading courier service providers, such as FedEx.

With a growing logistical network in China and huge global experience, FedEx said that it was well-prepared to handle the online shopping peak.

Eddy Chan, senior vice-president at FedEx Express China, said the US-based giant routinely faces challenging seasonal volumes, but has the capacity and flexibility to ensure continuity of international and domestic services.

In China, that means 9,000 staff making continued investment in its network, which now spans many second- and third-tier cities.

"Any rapid growth in business challenges an express company's overall strength in areas such as information processing, shipment management, service innovation, transport networks, customs clearance, and human resources," said Chan.

However, according to global management consulting firm A.T.Kearney, despite the massive expansion of thousands of logistics companies in China, quality of service still remains a serious issue across the country.

Mui-Fong Goh, team leader of its travel, transportation and infrastructure practice based in Beijing, said the relative scarcity of high-quality logistics providers often causes problems for e-commerce firms. They include late deliveries, damaged and lost parcels, slow cash-on-delivery processing, poor return procedures, and no special services such as installation or the ability to try on purchases.

"As the overall geographic coverage of the Chinese e-commerce market expands, the ability to offer reliable and consistent services and delivery will be the major source of competitive advantage," said Mui.