The logistics and express delivery industry has witnessed a tumultuous year, marked by challenges and a striking shift in market dynamicsFollowing the bustling peak season, various research conducted by Yibao Network revealed a consensus: the business environment for delivery points is unusually difficult compared to previous years.

Despite a relatively stable volume of operations, the costs associated with maintaining these delivery points have surgedRegulations have tightened, with some regions mandating the use of compliant warehouses, others requiring courier licenses, and yet more insisting on social security payments for couriersFailure to meet these regulations often results in participants having their dispatch fees temporarily withheld, further squeezing their profits.

Even in agricultural production zones, where there is traditionally less financial strain, the growth seen is becoming increasingly challenging to monetize

Rising additional costs across various fronts contribute to this issue, but the crux of the problem lies in the market’s saturationThe once-booming growth has hit a ceiling, leading companies to scramble for limited existing business.

As player numbers in the industry swell, competition becomes fiercer than everOne operator managing an average of 50,000 parcels daily reports that while their company previously engaged with a manageable volume of approximately 30 million, profits for 2024 have dipped by 20% compared to 2023. Originally, management suspected internal inefficiencies were to blameHowever, discussions with peers unveiled a troubling trend: their profits were similarly in decline.

Take, for instance, a delivery point processing around 10,000 parcels a dayIf the central office assigns an average fee of 1 yuan per parcel, that results in daily earnings of 10,000 yuan, translating to an annual income of 3.65 million yuan

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Once costs for couriers and operational expenses like rent and vehicle upkeep are accounted for, a net profit per parcel of just 0.15 yuan yields an annual profit of 550,000 yuanYet, forecasts suggest that achieving this 550,000 yuan profit will be notably more arduous in 2024. In reality, many delivery points are on the brink of loss.

For numerous delivery points, especially those situated in agricultural zones, financial success that exceeds 100 million yuan in revenue is not uncommonHowever, even these delivery points are not insulated from the perils of the marketEvery entity faces its own set of challenges.

From a broader perspective, the domestic express delivery industry is in a frenzy of competitive vying, now clearly defined by seven leading players — SF Express, JD Logistics (Debang), Cainiao (Shentong), Zhongtong, Yuantong, Yunda, and JituThe competition among these giants is ferocious and, despite their diverse strengths, collaboration or consolidation seems increasingly difficult.

In the face of such competition, companies are fiercely vying for dominance in the e-commerce sector, especially as the overall market growth appears to have hit a wall

Major players must find ways to elevate their volumes to leverage scale effectivelyAt the same time, smaller delivery points understand that increased parcel volume can theoretically correlate to bigger profits.

However, a deeper analysis reveals a stark dichotomy among franchise operators; well-managed delivery points are actively acquiring struggling neighbors, particularly in agricultural zonesSome are investing tens of millions to even over one billion yuan to enhance their operational capacities.

For delivery points grappling with declining business, introspection is crucial