Increased efficiency slashes package delivery costs

As global supply chains recalibrate amid geopolitical tensions, uneven economic recovery and rising costs, the express parcel delivery segment of the logistics industry has continued to expand with surprising resilience. Within that growth, China's role has become increasingly central, influencing both the scale and the economics of the global market.

China accounted for about 65 percent of global parcel volume in 2024, according to the Global Express Development Report (2025) released in November. The country has been the world's largest express delivery market for the past 12 years. Of the 267.9 billion parcels handled worldwide in 2024, more than 175 billion were processed in China — a volume unmatched by any other market.

That scale has gradually shifted China's position in the global parcel industry, from a fast-growing participant to a core engine of expansion. According to Xie Momei, deputy director of the international business department at the development and research center of the State Post Bureau. She said that China's express delivery sector plays a decisive role in driving global growth, supported by its efficiency, technological depth and broad service coverage.

However, the backdrop remains complex, with uneven global economic recovery, geopolitical risks, climate challenges and intensifying technological competition continuing to weigh on supply chains. Even so, parcel demand has remained on an upward trajectory, largely underpinned by the steady expansion of e-commerce.

China's delivery network has shown a notable capacity to absorb pressure while maintaining momentum. Last year, the sector handled 199 billion parcels, up 13.7 percent year-on-year, according to the State Post Bureau of China. Revenue from express delivery services reached 1.5 trillion yuan ($214 billion), marking a 6.5 percent year-on-year increase, the data showed. In 2026, the sector is expected to maintain steady growth, handling an estimated 214 billion parcels, a projected year-on-year increase of around 8 percent.

Industry observers say these figures reflect more than short-term consumption surges. Gao Hongfeng, president of the China Express Association, said the sector has entered a pivotal stage, moving from years of rapid expansion toward higher-quality development.

"At this stage, the focus is no longer simply on growth in volume," Gao said. "The key question is how effectively scale can be converted into efficiency, resilience and service quality."

Technological innovation, he added, has become the central driver of that transition rather than a supporting tool.

According to Gao, the next phase of development will be driven by accelerating the intelligent upgrading of sorting equipment and transport tools, while expanding the practical application of smart cloud warehouses, autonomous delivery and low-altitude logistics. Artificial intelligence, in particular, is being embedded across the entire logistics chain — improving forecasting, resource allocation and operational efficiency, while helping to reduce logistics costs across the broader economy.

Lai Meisong, founder and chairman of ZTO Express, said it has applied AI across the full logistics chain, accelerating the digitalization of vehicles, personnel and parcels. Intelligent equipment — including autonomous delivery vehicles, smart parcel lockers and automated sorting systems — has been rolled out at scale across distribution hubs and smaller outlets, delivering tangible gains in both cost control and service reliability.

"China's courier companies still have significant room to contribute to lowering economy-wide logistics costs," Lai said. He pointed to ZTO's own experience: the company's average transit cost per parcel fell from 1.26 yuan in 2016 to 0.63 yuan in the first half of 2025. Over the same period, the average price of express delivery services nationwide declined from 12.7 yuan to 7.5 yuan.

Over the past decade, sustained cost reductions across the sector have released more than one trillion yuan in value back to merchants and consumers, Lai added, allowing better products to reach consumers at lower prices. The experience has reinforced China's position not only as the world's largest parcel market, but also as one of its most cost-efficient.