ZTO EXPRESS(ZTO) - 2023 Q4 - Annual Report

Operational Performance - In 2023, ZTO Express handled 30.2 billion parcels, representing a year-on-year growth of 23.8%[26] - The company's market share reached 22.9%, maintaining its position as the industry leader for eight consecutive years[26] - ZTO Express operated more than 31,000 outlets and 99 domestic sorting hubs by the end of 2023[26] - The company has approximately 6,000 direct network partners and over 10,000 line-haul vehicles, including about 9,200 high-capacity trailer trucks[26] Technological Innovation - ZTO Express aims to enhance user experience through the introduction of advanced technologies such as artificial intelligence and big data analysis[22] - The "Express Butler System" has been upgraded to provide intelligent AI group chat after-sales service for small and medium-sized vendors, improving service efficiency[102] - ZTO Express aims to enhance operational efficiency through technological innovations, integrating digital technology into the entire express delivery business[92] Environmental Sustainability - The company is committed to reducing its carbon footprint and building a sustainable logistics system[21] - ZTO Express has implemented a top-down ESG governance structure, with the Board of Directors holding ultimate responsibility for ESG initiatives[34] - The company aims to achieve long-term sustainable development through continuous improvement of its ESG governance system[33] - In 2023, ZTO Express recycled 150 million cartons, demonstrating a commitment to waste management and sustainability[57] - The company achieved a 34% year-on-year growth in photovoltaic power generation, reflecting its investment in clean energy[57] - ZTO Express implemented green packaging initiatives, including fully biodegradable bags and recycled express boxes, with an average of 360,000 boxes recycled 8 times[57] - The company aims to achieve carbon neutrality and has integrated climate change into its corporate governance and strategic framework[58] - ZTO Express has 464 sets of automated sorting equipment, enhancing efficiency while reducing energy consumption and pollution[57] - The company utilizes LNG-powered vehicles in some areas to promote eco-friendly transportation solutions[57] - ZTO Express's new energy vehicles are part of its strategy to reduce greenhouse gas emissions and improve energy efficiency[57] - The company has established policies for emergency response to mitigate the impact of climate-related physical risks on operations[58] - ZTO Express's Board of Directors oversees climate change-related risks and opportunities, linking board compensation to climate performance[59] - ZTO Express aims for a 20% reduction in GHG emissions intensity per parcel by 2028[75] - In 2023, ZTO Express's total energy consumption was 732,619.73 tons of standard coal equivalent, with direct energy consumption at 648,856.31 tons[78] - The company generated 40,150 megawatt-hours of renewable energy, a 34% increase from the previous year, with 26,010 megawatt-hours used for self-consumption[78] - The proportion of e-commerce parcels without secondary packaging reached 93.34%, and standardized packaging materials usage was 91.83%[82] - ZTO Express's direct greenhouse gas emissions (Scope 1) totaled 1,402,275 metric tons CO2e, while indirect emissions (Scope 2) were 388,692 metric tons CO2e[78] - The company installed approximately 370,000 square meters of photovoltaic panels, generating 40,150 megawatt-hours of electricity[78] - ZTO Express has committed to enhancing resource efficiency and reducing waste through sustainable practices and circular economy concepts[70] - The company has developed a dedicated network for the distribution and recycling of environmentally friendly bags, improving operational efficiency[85] - ZTO Express is actively exploring voluntary emission reduction projects in the express delivery industry[74] Employee Rights and Development - ZTO Express has strengthened employee rights protection and enhanced vocational skills training[23] - By the end of the reporting period, the coverage rate of collective agreements for employee rights was 100%, with no incidents of human rights violations reported[180] - The company is committed to creating a diverse and inclusive workplace, enhancing employee satisfaction and promoting a people-oriented management philosophy[176] - The total number of employees decreased from 24,888 in 2022 to 23,554 in 2023, with 6,120 new employees hired in 2023[182] - The overall employee turnover rate for 2023 was 24.32%, with a voluntary turnover rate of 24.21%[182] - The annual turnover rate for operational staff decreased by 3.59% to 55.06% in 2023, compared to 58.65% in 2022, achieving the target reduction of 3%[183] - Female employees accounted for 36.01% of the total workforce, with female managers making up 31.00%[188] - The company achieved a 100% contribution rate for employee social insurance and housing provident fund during the reporting period[184] - ZTO Express recruited over 1,000 local workers from economically disadvantaged areas in 2023 to address local employment issues[186] - The number of accountable accidents decreased by 8.1% in 2023 compared to 2022, indicating improved safety management practices[195] - The proportion of unclear monthly turnover reasons decreased from 89.4% to below 20% during 2023, enhancing employee retention strategies[183] - The company implemented targeted recruitment for disabled individuals and ethnic minorities to foster a diverse workforce[185] - The average cost of employment per person in 2023 was RMB 289.69[182] Customer Satisfaction and Service Quality - ZTO Express achieved a customer satisfaction rate of 94% in 2023, up from 91% in 2022[135] - The all-channel connection rate of ZTO Express was 96.07% in 2023, an increase of 2.56% compared to 2022[133] - The complaints per 10,000 orders decreased to 1.99 in 2023, down by 2.45% from 2022[133] - A total of 178 customer service training sessions were conducted, with 3,510 trainees participating[136] - The utilization rate of privacy waybills in the entire network reached 76% in 2023[144] - ZTO Express maintained 100% coverage of privacy policies, ensuring all customers were informed[154] - The company experienced zero information security breaches in 2023, with no customers affected[154] - The company conducted an internal audit of its information security management system annually, ensuring compliance with ISO certifications[152] - ZTO Express has developed the "Blue Bee Index" project, achieving a 56.20% success rate in compliance rectification among over 2,700 couriers nationwide[159] - The overall learning completion rate for courier training modules exceeded 92% by the end of 2023, focusing on safety and operational skills[160] Strategic Partnerships and Expansion - ZTO Express signed a strategic cooperation agreement with NEOLIX to promote the large-scale application of autonomous driving vehicles, with initial operations commencing in cities like Yancheng and Hefei[173] - The company actively collaborates with Nanjing University of Aeronautics and Astronautics to advance drone logistics, focusing on core technologies and scientific project applications[174] - ZTO Express is actively pursuing global expansion, leveraging the "Belt and Road" initiative to build an international logistics network[113] Financial Performance and Cost Management - The company has reduced logistics costs by approximately 10% for customers through enhanced flexibility and responsiveness in the spare parts logistics supply chain[110] - ZTO Express continues to expand its product matrix and launched several high value-added products during the reporting period[106] - The company has developed a one-stop production and research work platform to improve R&D efficiency and collaboration[93] - The percentage of customers using online services/platforms increased from 92% in 2021 to 95% in 2023[132] - The percentage of total revenue generated from online channels rose from 90.3% in 2021 to 92.4% in 2023[132]