SF-UPS Joint Venture: A New Era in International Express Shipping
In a significant development, SF Holding (SZ.002352), the parent company of SF Express, and UPS (United Parcel Service, Inc.) have officially established their joint venture. The partnership has received all the necessary regulatory approvals, filings, and registrations. As a result, this marks the formal commencement of their collaboration. This venture is set to introduce a brand-new express shipping product known as “SF-UPS Direct+.” Further, many industry leaders see this new collaboration as a milestone for international express shipping.
Earlier this year, on May 26th, SF Express announced an investment of $5 million in the joint venture, while UPS made an equivalent investment, resulting in a total investment of $10 million. Both companies hold a 50% stake in the joint venture. The new partnership aims to develop international logistics products and provide comprehensive solutions to manufacturers, traders, and cross-border e-commerce businesses. This is an exciting period for the global industry. International express shipping continues to grow in importance.
The “SF-UPS Direct+” product will initially be rolled out in South China. In fact, there are plans to expand its coverage across the entire nation within the year. Positioned as an economical international express shipping solution, this product targets cost-conscious customers seeking efficient customs clearance. Moreover, this partnership’s first service route aims to ship goods from China to the United States. It offers a transit time of 7 working days.
Here’s how the process works: SF Express picks up shipments within China, leveraging UPS’s robust air network to transport cargo swiftly. Upon arrival in the United States, UPS handles customs clearance and the final-mile delivery. In addition, customers can conveniently track their shipments using SF Express’ waybill number. This system streamlines international express shipping from start to finish.
UPS, one of the world’s largest and most renowned express delivery companies, boasts a fleet of over 650 aircraft and transports more than 19 million packages daily. In 2008, UPS established its global transfer center at Shanghai Pudong International Airport. Then in 2010, it launched the Asia-Pacific Transfer Center in Shenzhen, China. Notably, their impressive infrastructure plays a key role in the efficiency of international express shipping services.
According to a research report by Shenwan Hongyuan, the rapid growth of cross-border e-commerce has driven significant expansion in the express delivery market. In 2016, the volume of express delivery for regions such as Hong Kong, Macau, and Taiwan and international shipments reached 626 million pieces. This resulted in a year-on-year growth of 44.16%. However, the international logistics industry is currently dominated by global enterprises. In comparison, domestic express delivery companies occupy a relatively small market share. This is especially true compared to those focused on international express shipping.
The report also indicates that as domestic express delivery companies continue to enter the capital market, competition within the industry becomes increasingly fierce. The international express market has become a battleground for domestic express delivery companies. Companies such as YTO Express and BEST Inc. have also made significant strides in expanding their international logistics business. As a result, they are striving to make gains in the competitive international express shipping market.
China’s most prominent express delivery companies have ventured into the capital market. Apart from SF Express and the “Three Links and One Network” (YTO, Yunda, ZTO, and Best), Best Inc. recently went public on the New York Stock Exchange. According to data from the State Post Bureau of China, from January to August this year, the accumulated volume of international and Hong Kong, Macau, and Taiwan delivery services for express delivery companies reached 490 million pieces. There was a year-on-year growth of 31.1%. This growth was largely driven by demand for international express shipping.
SF Express is actively expanding its international business. In the first half of the year, the company’s non-tax global business revenue (including global warehousing income) reached $868 million, a 39.51% increase compared to the same period in the previous year. Although it accounts for only 2.7% of the company’s revenue, it is one of SF Express’s fastest-growing business segments. This is especially true due to international express shipping.
SF Express International provides various import and export services with different time standards, including international standard express, international special offer, international small parcels, bonded warehousing, overseas warehousing, and transshipment. SF Express’s international services cover 53 countries and regions. These include the United States, the European Union, Russia, Canada, Japan, South Korea, and more. This structure supports global international express shipping networks.
