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TMCNet:  CRC to launch e-commerce express [GCTL Insights Magazine (China)]

[June 23, 2014]

CRC to launch e-commerce express [GCTL Insights Magazine (China)]

(GCTL Insights Magazine (China) Via Acquire Media NewsEdge) BEIJING, Jun 24 (GCTL) - China Railway Corporation (CRC) will launch six express trains for an e-commerce logistics service on July 1, which will connect four first-tier cities, China National Radio reported Sunday.


Experts said the new express trains reflect CRC's determination to undergo market-oriented reform and will benefit logistics companies as well as online shopping consumers.

It is the first time CRC, which is mainly involved in bulk stock transportation, has entered the flourishing e-commerce logistics market, the report said.

The new service is a result of cooperation between the CRC and logistics companies, connecting Shenzhen, Guangzhou, Beijing and Shanghai, with the aim of delivering goods produced in the Pearl River Delta and Yangtze River Delta to Beijing in 24 hours, the Beijing-based China Times newspaper reported Saturday.

The transportation speed and price of the e-commerce express train will be between those of high-speed trains and common cargo transportation, according to the report, Global Times reported.

"The new e-commerce express train is a promising service since it will bring a win-win result to both the CRC and logistics companies," Liu Jianxin, an expert from the China Communications and Transportation Association, told the Global Times Sunday.

CRC used to rely on passenger transportation and even commodity transportation and mainly focused on bulk stock transportation, Liu said.

But with the economic downturn, the transportation of bulk stock commodities, such as coal, has shrunk, forcing CRC to find new markets, according to Liu.

Moreover, after CRC was formed as a corporation from a governmental body, it had to figure out how to make a profit and engage in market competition, he said, noting that the logistics market driven by China's prosperous e-commerce industry is a profitable choice.

CRC was created as a new company after the Ministry of Railways was dissolved in March 2013, with the regulatory functions of the ministry being merged into the Ministry of Transport.

China's e-commerce companies have been putting a lot of effort into attracting consumers, including launching discounts and promotions on holidays, sometimes even creating shopping festivals, such as November 11 or Singles' Day.

The online sales revenue of Alibaba Group's two e-commerce platforms even reached 35 billion yuan ($5.6 billion) on Singles' Day in 2013.

However, it is usually hard for the logistics companies to handle the heavy logistics burden after the online shopping frenzy.

The official data showed that Chinese logistics companies delivered 2.6 billion parcels in 2013, with a remarkable year-on-year growth of 51.9 percent, China Times reported.

But the CRC has not joined the flourishing market yet and the logistics companies mainly depend on road and plane transportation.

"It is quite hard for private companies like us to have access to train transportation," an unnamed staff member of Shanghai STO Express Co was quoted as saying by China Times.

Compared with transportation by plane, transportation by train is more punctual and less influenced by the weather, therefore, logistics companies will welcome the new choice, a staff member in a logistics company who preferred to remain anonymous, told the Global Times Sunday.

But the new service is only a trial and the CRC will have some preparation to do, Liu said.

Compared with bulk stock commodities, e-commerce parcels have higher value and after being delivered to stations, they need to be transferred to local deliverers, and all this requires professional logistics teams to handle, according to Liu.

(c) 2014 FocusAsia Media Ltd. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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