FIRST Word
DDS
LogiSticS
goeS buSt
On January 25, 2010 the Guangdong Postal Authority an-
nounced that the Shenzhen Dongdao Logistics Co. (DDS)
became insolvent and collapsed, leading to mass protests and
riots by customers and employees not yet reimbursed by the
company. Founded in Shenzhen in 1997, DDS operated over
800 branches in China, including Hong Kong. DDS ran into
trouble after their branches in Eastern China began to fail in
November 2009. The company started postponing customer
payments in December. Gao Wei, the chairman of DDS,
along with five other managers were taken into custody by
police after the company’s inability to pay was confirmed by a
government investigation. His assets were also frozen.
70%
of the payment collection
business in Southern China was oc-
cupied by DDS logistics. DDS also
accounted for at least 10% of the courier business in Shenzhen.
50 million
RmB (US$7.4 million) was still owed to DDS customers when
insolvency was announced. Many customers had not been paid
back for months, far beyond the usual window of 15 days.
17
people were arrested during protests for
deliberately blocking traffic in Shenzhen, and
four other were arrested in Foshan. Thousands
of DDS employees and customers gathered together demanding
legal rights. Protests touched cities around the Guangzhou district,
including Shenzhen, Foshan, and Dongguan.
2 months
of unpaid

wages were
also left in the Imaginechina
wake of DDS’s closure. Employees are seeking reimbursement
from the government.
8 MARCH/APRIL 2010 www.supplychains.com
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