According to an interview, Shentong Express has increased service fees. For example, packages from Shanghai, Huangzhou shipped to Yunnan, Guizhou, Jilin, Liaoning may cost more from 12 Yuan to 15 Yuan.

For those products shipped to Xinjiang and Tibet may cost 6 more yuan at 21 Yuan, while in the past, it only cost 15 Yuan.

6 Yuan hike is the highest increase in the industry in recent years.

But Shentong Express did not increase fees for the goods delivered in the same city.

The senior superintendent has stated that Shentong adopted franchising mode, so franchisees can adjust price on their own, which is directed by the market and driven by rising cost.

Express industry has sustained two major parts of cost, labor cost and transportation cost, labor cost accounting 35-40% and transportation cost accounting 25-40%.

Before 2005, express companies can earn a windfall profit around 35%, but now the profit has fallen to nearly 5%
Experts’ analysis is that if there is no price hike, the service quality may be cut down, such as products can not delivered on time. Or the industry can put more restrictions on initial price and collect more fees on extra weight.

E-business is sensitive about express companies’ price adjustment, lower price can boost e-business but price hike may squeeze profit for e-business operators.

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