Logistics premits canceled

As online shopping and deliveries surge in China, the country's logistics industry is set for rapid growth.

But according to the State Post Bureau, more than 100 logistic companies' permits were canceled in 2012, over quality and safety concerns...

PKG

A major setback for China's surging logistics industry...

In a statement on its website, China State Post Bureau says the permits of 116 delivery companies have now been canceled...

And calls for more supervision, after reports of delivery and safety problems, within the booming sector.

It says media reports have surfaced of quote, 'barbaric sorting,' mail being lost, and disparate clauses among some delivery companies.

Along with concerns that some companies are violating security rules.

One plane's cargo hold caught fire in October... Investigations found vesuvian, a parcel containing slow-burning matches, caused the fire.

Other illegal items, like lithium batteries were also found in parcels.

Experts say the fast development of China's logistics industry, has resulted in patchy quality... With better staff training, now needed.

SOUNDBITE (CHINESE) PROF. LIU JIANLIN, Fudan University:

"As the industry develops, the companies need more people to work for them.But as they're growing so quickly and logistics is all about time, they may not be providing training to new staff as required. Meaning some of them don't have a sense of good-service, or safety."

Online shopping is changing China's economy... and driving domestic consumption.

Transactions on Taobao and Tmall hit more than 100 billion dollars last year.

And the e-commerce boom, is bringing about manufacturing and logistics reforms... with deliveries expected to rise just over 20 percent a year on average, between now and 2015.

But the permit cancellations by the national postal authority, are a reminder of the safety and quality assurance still needed, across this rapidly growing industry.