China grants FedEx, UPS operating licenses for some Chinese cities

Tue Sep 11, 2012 9:04am IST

A UPS truck is parked near Time's Square in New York, October 22, 2009. REUTERS/Brendan McDermid

A UPS truck is parked near Time's Square in New York, October 22, 2009.

Credit: Reuters/Brendan McDermid

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(Reuters) - Package delivery companies FedEx Corp (FDX.N) and United Parcel Service Inc (UPS.N) have received approval to provide express-package services in some cities of China on their own, the country's State Postal Bureau (SPB) said on its website last week.

The approval gives FedEx access to eight cities while UPS was given access to five cities, the SPB said.

The approval of the licenses was first reported by the Wall Street Journal, which also said that FedEx already provides services in Chinese cities through joint ventures with local companies while UPS doesn't have partnerships with Chinese companies.

The authorization comes four months after Chinese regulators approved a $1.6 billion initial public offering by state-owned China Postal Express & Logistics, one of the largest courier companies in the Chinese domestic market.

According to the government body, FedEx can now operate in the cities of Shanghai, Guangzhou, Shenzhen, Hangzhou, Tianjin, Dalian, Zhengzhou and Chengdu.

"FedEx is committed to China and remains focused on growing our business together with our customers," FedEx spokeswoman Shea Leordeanu said in an email.

UPS was given a license for the cities of Shanghai, Guangzhou, Shenzhen, Tianjin and Xi'an.

"We are pleased to receive a license to operate domestic express service in five strategic cities in China," UPS spokeswoman Kristen Petrella said.

(Reporting by Siddharth Cavale and Tej Sapru in Bangalore; Editing by Muralikumar Anantharaman)

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