Online purchases drive China’s express market hike

05 / 12 / 2013

  • Internet purchases accounted for an estimated 60 per cent of the 5.69 billion parcels that express firms moved in 2012

    Internet purchases accounted for an estimated 60 per cent of the 5.69 billion parcels that express firms moved in 2012

THE warnings from those pessimists who spotted a structural downturn in China’s slowdown apparently failed to reach the country’s consumers or the carriers who are looking to deliver their purchases.

The express market in China has expanded at a blistering pace, driven largely by on-line shopping, writes Ian Putzger.

Purchases over the internet accounted for an estimated 60 per cent of the 5.69 billion parcels that express firms moved in 2012, according to China’s State Post Bureau. For 2013, the bureau has estimated a volume around the eight billion mark, well north of 30 per cent growth.

Most of this avalanche goes by truck (about 80 per cent), but about 15 per cent is moved by air, according to the China e-Business Research Center.

This momentum has prompted some of the country’s large international carriers to pay more heed to the domestic arena.

For example, in May, China Southern Airlines unveiled its ‘A-Class Express’, an offering that allows customers to book specific flights. The service kicked off with a network of 12 cities across China and has kept expanding ever since. From December, Guiyang was added, bringing the tally to 17 cities in China.

The express bonanza arguably wrought the biggest move at Air China Cargo. What used to be an all-B747 line-up when it came to freighters took on a decidedly different complexion in late November with the arrival of the first of four converted B757-200 cargo aircraft.

These ‘planes are designated for the domestic arena –first and foremost to perform overnight linehaul for China Postal Airlines, a joint venture between China Post and China Southern Airlines with 18 B737 freighters to its name.

“Once we are used to the B757, we will consider using it to feed cargo from various points in China to our freighter hub in Shanghai,” remarks Titus Diu, chief operating officer of Air China Cargo.

The airline was due to add a second freighter type to its fleet in December with the arrival of the first of eight B777-200Fs on order. That aircraft is scheduled to enter service at the beginning of January, flying from Shanghai to Frankfurt.

According to the current schedule, Air China Cargo should have five B777 freighters in action by the third quarter of 2014, with three more to come on board the following year.

The order for eight B777 freighters – placed late in 2012 – was tied into an agreement with Boeing that the plane-maker would take back Air China Cargo’s B747-400BCFs, leaving the carrier with three B747-400 production freighters.

These have been deployed mostly on regional routes, chiefly to Japan and Taiwan. According to Diu, the airline currently is the largest freighter operator between Shanghai and Japan, with five weekly flights each to Osaka and Tokyo.

In the coming months Air China Cargo’s B777 freighters will chiefly ply the trade routes to Europe. This will allow the carrier to maximise revenues by inserting stops in Chengdu, Chongqing and Zhengzhou, Diu says.

Read Ian Putzger's full piece in Air Cargo News 16 December 2013