China's courier sector saw expansion in2020. The China express delivery development index stood at 1,259.1 last year,up 26.1 percent year-on-year, the State Post Bureau said in a report releasedon May 8.

The sub-indices for development scale,development popularity and development trend respectively rose 28.3 percent,7.1 percent and 21.2 percent from a year earlier, according to the bureau.

The courier sector handled approximately83.36 billion parcels in 2020, up 31.2 percent from the figure in 2019. China'scourier sector handled more than 21.93 billion parcels in the first quarterthis year, up 75 percent year-on-year, or an average of about 240 millionparcels on daily basis. The express delivery industry is expected to handleover 100 billion parcels in 2021, and its operating revenue will exceed 1trillion yuan ($154.6 billion), bureau data shows.

Compiled on the basis of data from majorlogistics firms' operating delivery services, the development index reflectsthe overall business activities and trends in the country's courier sector.

Although losses incurred by some Chineseexpress delivery firms during the first three months of the year, it is just atemporary phenomenon and the sector is poised for steady growth over the longterm, experts said on April 13.

Shenzhen, Guangdong province-listed SFHoldings, the market leader, said in its interim results released on April 8that it may incur a net loss of 1.1 billion yuan ($168 million) for the firstthree months of the year, compared with a net profit of 907 million yuan duringthe same period last year.

Wang Wei, founder and chairman of thecompany, said that corporate delivery services, which are mainly the deliveryof business invoices, grew at a much slower pace than expected during the firstquarter. Corporate delivery services have accounted for nearly 40 percent ofSF's turnover. But with the widespread use of digital invoices, SF's profitfrom this business has dropped accordingly, said Wang.

STO Express, the Shenzhen-listed rival ofSF, said at the end of January that its net profit for last year fell by 98percent on a yearly basis to about 42 million yuan, due to stiff marketcompetition and higher spending on multiple fronts. The company is expected tofare well in the next quarter, experts said.

Shanghai-based ZTO Express, which is theleader in terms of e-commerce deliveries, is also anticipating better timesahead, according to company officials. Yunda Holding, a Shenzhen-listed expresscourier, is expecting market share and performance to improve after acquiring a6.5 percent stake in Shanghai-listed Deppon Logistics.

Ming Xing, an analyst with EssenceSecurities, said in a recent report that there is still enough room for growthin China's express delivery sector, adding that market share would be furtherconsolidated among the industry leaders.

"Courier companies will feel stressedbusiness-wise in the short run, but investors should watch closely the changingcompetition patterns in the industry," he said.

Price competition in the delivery industryhas exceeded market expectations. Though prices are under control at present,the chances of a larger-scale price war cannot be excluded, which will eat intothe profits of companies.

Data from the State Post Bureau showed thatthe development index of China's express delivery industry jumped 38.7 percentyear-on-year to 330.4 points. Delivery companies handled 761 million parcelsearlier this month, up 44.4 percent from a year earlier.

While the rapid development of expressdelivery services is making life in China easier and more convenient, the hugeamounts of materials used for packaging are putting extensive pressure on theenvironment. In response to the nation's commitment to achieving carbonneutrality, leading couriers are adopting new measures to contribute, expertssaid.

Recyclable express boxes used by courierYTO Express are becoming increasingly popular in Hainan province.

“The various sized boxes differ from ordinary ones as they contain noglue, metal staples or adhesive tape. What's more, they are sealed with specialclips. "The recyclable packing cases can be folded into flat cardboard forrecycling or storage purposes. Although they cost more than conventionalcounterparts, they can be reused several times." said Li Changxiang, whois in charge of YTO Express's network service in Hainan.

By the end of last year, YTO Express hadreplaced more than 90 percent of its plastic woven bags with recyclable bags,and over 90 percent of its adhesive tapes used for sealing boxes have beenslimmed down to minimize waste.

All these efforts are to make packaginggreener and recyclable, which is also in line with China's commitment to peakingcarbon dioxide emissions by 2030 and achieve carbon neutrality by 2060, expertssaid.

"China has become the world's greatestconsumer of e-commerce parcels. There were more than 83 billion units ofparcels delivered across the nation in 2020, and the figure is expected tofurther swell to 95 billion units this year," said Yang Daqing, alogistics industry expert.

Every year, express companies usesubstantial volumes of packaging materials including plastic bags, cardboardboxes, filling and adhesive tape, most of which are non-biodegradable and placemajor pressure on the environment, Yang said.

Each year, the nation's express courierindustry consumes more than 9 million metric tons of paper waste and about 1.8million tons of plastic waste, according to a Xinhua News Agency report.

The Chinese government is now promoting theexpress delivery industry to use green packaging as well as reduce packagewaste.

On Dec 14, eight central governmentdepartments, including the National Development and Reform Commission and theState Post Bureau, published a guideline that introduced measures such asoffering incentives to businesses and setting unified standards for greenpackaging to ensure compliance among industry participants.

By 2022, the guideline set a goal of having85 percent of products arriving at courier warehouses in a condition suitablefor distribution.

JD Logistics, a unit of Chinese e-commercegiant JD, became the nation's first logistics enterprise to set a carbonreduction target. JD Logistics vowed to cut carbon emissions 50 percent by 2030compared with 2019 levels.

As early as 2017, JD Logistics launched anend-to-end green and environmentally friendly plan to implement low carbon andenergy saving results in various procedures including packaging, storage andtransportation.

As of December last year, recyclablepackages have been used a total of 110 million times in its green campaign.

In the meantime, new energy vehicles wereput into operation in the past four years (2017-20) in more than 50 citiesacross the nation, allowing 120,000 tons of carbon dioxide emissions cutsannually.

SF Holding Co Ltd has also progressivelycarried out its green packaging plan. Through technological transformation, SFHolding saved about 26,000 tons of paper and some 8,000 tons of plastics lastyear while cutting carbon emissions by 70,000 tons in total, said the Shenzhen,Guangdong province-based company.

As many as 10.58 million recyclable canvassacks came into use at ZTO Express as of March. These innovative bags can bereused over 100 times and typically have a service life of 4-6 months. In themeantime, the express courier company has established 21,000 package wasterecycling facilities throughout its network, said Qiu Dapeng, manager of thecommunications division at ZTO Express.

Likewise, Best Inc has launched a greenlogistics scheme throughout its business network including in operations,packaging and transport.

The express company has widely appliedreusable bags embedded with chips at its major transit centers. In comparisonwith conventional woven bags that can only be used twice at most, the traceablebags can be reused over 40 times, said Wang Bo, director of network operationsat Best Express.

Best had used a total of 9 million suchbags, and their accumulated usage counts reached 280 million times.

"Green logistics is backed by theenhancement of technology, efficiency and operational capability," Wangsaid.

The advancement of green packaging istaking place throughout the complete express delivery service process.Therefore, the industry could not go green without the participation of allrelated parties.

Authorities have established clearpackaging requirements for both courier service providers and clients.

In accordance with new rules on parcelpackaging that came into effect in March, courier companies should purchasepackaging materials that meet government set standards and prioritize materialsthat can be reused or are easy to recycle, whilst clients of express deliveryservices should also support green packaging and comply with the new rules.Clients should also avoid using materials that are not in line with relativelaws and regulations, said Xinhua, citing Guan Aiguang, an official with theState Post Bureau.

The development of green express servicesalso faces cost challenges.

Amid intense industrial competition,domestic couriers are seeing narrowed profit margins. And switching to biodegradablepackaging adds additional costs for couriers, Yang said.

Wan Yuyang, a deputy general manager withYTO Express's network management in Hainan, said there are still some unsolvedproblems, including the supply of green packaging materials, difficulties inpurchasing green biodegradable packing in Hainan and insufficient support inrecycling packaging cases from end users.

"We are trying to solve the hardshipsin recycling with technologies such as chips inside reusable packing boxes sothat we can trace their locations and recycle them accordingly," Wan said.

Experts also raised concerns regarding therecycling of packaging materials. Currently, about 80 percent of paperpackaging waste from logistics can be reused. However, 99 percent of theplastic packaging waste cannot be effectively recycled due to low recall value.

China's first ever "plastic road"project using recycled milk bottles set a good example of givinghard-to-recycle plastics a second life.

The "Milk Bottle Road" by USchemical giant Dow and Chinese dairy firm Shiny Meadow was unveiled on April 22at East China University of Science and Technology's Xuhui campus in Shanghai.Enabled by Dow's asphalt modification technology, more than 6,000 used milkbottles and other plastic waste was used to pave the polymer-modified asphaltroad. The green roadway exhibited commendable durability compared withconventional asphalt surfaces.

"Hard-to-recycle plastics are oftendiscarded in landfills and waterways without consideration for their value in otherapplications. The importance of plastics must be an impetus for brand owners,recyclers and other value chain partners to prevent it from being lost aswaste," said Bambang Candra, Asia-Pacific commercial vice-president ofpackaging and specialty plastics at Dow.

Ecological environmental protection andgreen development require collective efforts of people from all walks of life,Wan said.