China's courier companies explore air cargo market

SHANGHAI - Chinese private courier companies are increasingly investing in the air freight business to offer swifter deliveries.

Last week, Shanghai YTO Express signed a contract with the municipal government of Jiaxing in the eastern province of Zhejiang, agreeing to build an air logistics hub at the Jiaxing airport.

With a total investment of 7.3 billion yuan ($1.06 billion), the hub will start construction before the end of 2018, and it is expected to be operational in 2021.

According to Su Xiufeng, an official in charge of the air cargo business of the company, Jiaxing is an ideal place to build the air cargo hub, since the Yangtze River delta area is a center for China's courier business and many major cities are within a three-hour flight distance from the city.

ZTO Express, also headquartered in Shanghai, teamed up with Turkish Airlines and PAL Air Ltd in June, with plans to establish a joint venture to transport parcels.

Guangzhou-based SF Express has been a leading player in the air cargo market. On July 1, the 45th cargo plane of SF Airlines, the cargo airline under SF Express, was put into use.

SF Express signed a deal with the provincial government of Central China's Hubei province at the end of last year to build a freight airport in Ezhou city. The airport is expected to handle 2.45 million tons of cargo by 2025.

The express delivery companies' increasing interest in cargo flights is a response to the country's booming courier business.

During the first half of this year, China's express delivery sector made a total of 22.08 billion deliveries, up by 27.5 percent from the same period last year. A total of 520 million overseas deliveries were made during that period of time, up by 43.1 percent.

Xu Yong, an analyst with the China Express Consulting website, a research institute for the Chinese courier market, said the investment in logistics infrastructure will help companies reduce their costs in the long run.