(Yicai Global) Dec. 26 -- The Shanghai government is rolling out subsidies to couriers over the next month to help alleviate a shortage of manpower during the busy holiday period amid a fresh wave of Covid-19. It is also urging e-commerce platforms and express delivery firms to increase the salaries of deliverymen by over 20 percent to boost recruitment.

The municipal government is granting subsidies of CNY60 (USD8.60) per day to each courier working for e-commerce and express delivery firms from Dec. 25 to Jan. 27, 2023, according to a document released on Dec. 24. This period covers not only the public holiday for the calendar new year, from Dec. 31 to Jan. 2, but also the upcoming week-long Lunar New Year break from Jan. 21 – Jan. 27. Over the public holidays, the subsidy can reach CNY150 (USD21.50) a day.

The city government is also urging e-commerce platforms and courier companies to improve their payment terms, offer rewards, provide catering and distribute supplies to keep couriers warm during the cold winter so as to attract more workers.

Wages are now between 20 percent and 30 percent higher than normal, some couriers told Yicai Global.

Thanks to these policies, delivery capacity at a number of e-retailers has improved although it is not fully back to normal, Yicai Global learned.

Many deliverymen are sick with the novel coronavirus and cannot work. Others have already gone home for the holidays, leading to a chronic shortage of staff at the city’s internet-based firms. Yet online orders are soaring as people opt to stay home amid a flare-up of Covid-19 and in the run up to the Spring Festival holiday.

Only between 40 percent and 70 percent of Freshhippo’s deliverymen in Shanghai are coming to work and it is not enough to fulfill all the orders, an insider at the e-grocer backed by e-commerce giant Alibaba Group Holding said.

Subsidies will really help drive recruitment during the Spring Festival period, the person said. With government subsidies plus Freshhippo’s bonuses, couriers can earn up to CNY4,000 (USD574) more than usual.

Delivery firms are also hiring. Cainiao has upped its offer to casual workers to 20 percent more than the usual daily rate, an employee at the logistics arm of Hangzhou-based Alibaba told Yicai Global earlier.

Meituan has recruited around 5,000 new deliverymen in Shanghai in the past week, the on-demand service giant said. Its food delivery app Meituan Waimai shelled out CNY8 million (USD1.2 million) in bonuses to couriers in the last seven days and is likely to pay another CNY20 million in rewards over the next month to drive recruitment.

Editors: Shi Yi, Kim Taylor