Companies accelerate logistics investment and air cargo services efforts

Chinese express delivery and logistics companies are stepping up efforts to invest in logistics infrastructure globally and provide air cargo services, according to experts.

These efforts are part of a broader push by the companies to improve delivery efficiency and ensure the stability and security of supply chains, they said.

Cainiao Network, the logistics arm of Chinese technology heavyweight Alibaba Group, has increased the number of its overseas distribution centers to 15 to reinforce its global logistics network. It is focusing on last-mile deliveries and smart lockers to improve and localize its services in destination countries.

The company has set up six smart logistics hubs around the world. It operates more than 3 million square meters of cross-border logistics warehouses, and has over 240 chartered flights for long-distance logistics every month.

Liu Xinyang, general manager of Cainiao Export Logistics, underlined the need to streamline and digitalize logistics capabilities and services, as well as cross-border supply chains.

"The COVID-19 pandemic has highlighted the importance of stable and efficient cross-border logistics services as more merchants shift online to tap a wider overseas consumer base," Liu said.

"Cainiao will continue its commitment to building global logistics infrastructure and enhancing end-to-end global fulfillment services to better support export merchants in their cross-border businesses."

In November, Cainiao announced the launch of its first smart distribution center in Brazil, and plans to launch another nine such centers in that country in the next three years.

JD Logistics, an arm of Chinese e-commerce platform JD, is increasing efforts in the construction of logistics infrastructure globally. It plans to build more warehouses in the Americas, Europe, Southeast Asia, Australia and the Middle East. Chinese enterprises are accelerating steps to expand business activities in these regions, with the e-commerce penetration rate continuing to rise.

Ji Jie, general manager of international warehousing and distribution at JD Logistics, said the company has launched self-operated warehouses in the United States, Germany, the Netherlands, France, the United Kingdom, Southeast Asia, the Middle East and Australia.

Zhang Zhouping, a senior analyst of business-to-business and cross-border activities at the Internet Economy Institute, said, "Overseas warehouses serve as vital infrastructure that boost growth in the nation's cross-border e-commerce sector," adding that such facilities enable quicker customs clearance, faster delivery and lower costs.

Lu Zhenwang, CEO of Wanqing Consultancy, which is based in Shanghai, said establishing overseas warehouses not only promotes Chinese brands and products internationally and enhances the competitiveness of Chinese foreign trade enterprises, it also introduces a large number of overseas products to Chinese consumers.

JD Logistics has received approval from aviation authorities to put its self-owned air cargo fleet into operation and boost its long-haul freight capacity.

The company said it will first develop domestic air cargo to cover major cities nationwide and accelerate its operations in international air cargo markets such as North America, Europe, the Middle East, Southeast Asia, Japan and South Korea by the end of 2025.

In Hubei province, Ezhou Huahu Airport, which went into operation in July and is backed by Chinese logistics service provider SF Express, has launched cargo routes linking Ezhou with Shanghai and Shenzhen, Guangdong province.

As the first dedicated air freight airport in Asia and the fourth of its kind globally, Ezhou Huahu Airport expects to open more than 50 domestic routes and over 10 international cargo routes by 2025, with cargo throughput reaching 2.45 million metric tons.

SF Express' freight transit center at the airport is due to start operating by the end of June. Moreover, the airport plans to open routes to the German city of Frankfurt, Liege, Belgium, Doha, capital of Qatar, and Osaka, Japan.

Yang Daqing, deputy director of research at the China Federation of Logistics and Purchasing, said air cargo only comprises a relatively small proportion of China's comprehensive transportation system. The system cannot meet consumers' fast-growing demand for high-tech products and cold chain logistics services involving the transportation of fresh commodities and medicines, Yang added.

"The shortage of air cargo capacity and specialized air cargo enterprises, along with rising transportation costs, became very acute amid the COVID-19 pandemic," Yang added.

Developing international air freight business will help enterprises boost long-haul freight capacity, establish overseas logistics networks, and further improve cross-border delivery efficiency, he said.