HONG KONG: Hong Kong's courier sector has expressed serious concerns about its future business prospects following the introduction of a new postal law in the mainland that could prevent firms from operating across the border - which could drive many companies out of business.

The sector is now urging the government to include the courier sector in the next stage of the CEPA (Closer Economic Partnership Arrangement). Past versions of the CEPA had included arrangements between the central government and the Hong Kong government to allow certain businesses and professions from the city to do business in the mainland.

Gary Ng, chairman of Hong Kong Courier Association (HKCA), told China Daily that mainland-related business accounts for about 40 percent of the revenue of local courier companies, and that cross-border business carries higher profit margins, but their ability to deliver across the border is now under threat.

In the past, many Hong Kong companies have provided courier service in the mainland, mostly for the city's small and medium sized companies (SMEs). But the new postal law, introduced in October 1 last year, demands that courier firms operating within the mainland need to meet certain thresholds, including both financial and operational.

Ng fears that while international logistics companies and the Hong Kong Post would have no trouble meeting the standards, many Hong Kong courier companies would have to struggle to satisfy the requirements, which means they could not do business any longer.

The HKCA is now trying to ask the Hong Kong government to help them, having already met with officials from the Trade & Industry Department and the Commerce and Economic Development Bureau.

Ng said the hundreds of courier companies in Hong Kong together employ about 10,000 people, and losing the mainland business would threaten their jobs.

Moreover, Ng said that small courier providers charge lower fees that well-known international courier companies. If the small courier firms could not provide cross border service, then it would result in much higher cost for the customers- the thousands of local SMEs that have factories and customers on the mainland.

China Daily

(HK Edition 02/06/2010 page2)