Turkish, ZTO and PAL Air form new global integrator

11 / 06 / 2018

  • ZTO Express chairman Mei Song Lai (L), M İlker Aycı, chairman of the board and the executive committee at Turkish Airlines (C), PAL Air vice-chairman Vivian Lau (R)

Turkish Cargo has signed a strategic partnership with China’s ZTO Express (the world’s largest parcel distributor)  and Hong Kong-based GSSA PAL Air in what the freight-carrying arm of Turkish Airlines has described as a “game changer for the global express transport business”.

The deal will create a new joint venture integrator, based in Hong Kong, that will offer door-to-door logistics services as well as warehouse management, order management and supply chain management as required.

Leading e-commerce company Alibaba is also potentially involved in the joint venture, being expected to close on the $1.38bn purchase of 10% of ZTO Express by the end of June

ZTO Express chairman Mei Song Lai said: “The cooperation between the three partners will form synergy by combining strong core competencies and integrating key resources, and will [undoubtedly] effect positive progress in the areas of global express delivery, warehousing, cargo freight, and aviation route development and more, and will ultimately benefit traders and consumers globally.”

M İlker Aycı, chairman of the board and the executive committee at Turkish Airlines, remarked: “In five years’ time [the joint venture] will generate over $2bn of revenue. The growth is expected to continue gradually parallel to the e-commerce demand.”

PAL Air vice-chairman Vivian Lau highlighted developments such as IoT, robotics, artificial intelligence, 3D printing, virtual reality, augmented reality and mixed reality that she believes “will unleash unprecedented opportunities and challenges”.

Furthermore, she said: “To add to this list, the world is awaiting the launch of 5G which promises 10 gigabits per second, a hundred times faster than the current 4G technology. All these will provide further fuel to the already explosive e-commerce development.”

Indeed, in response to the growth of China’s e-commerce sector, PAL Air launched a business-to-consumer wholesale postal express service in January 2016.

Turkish Cargo pointed out that alongside booming e-commerce volumes, the global express and courier industry is showing “outstanding” growth. Revenues in this industry stood at around $260bn in 2016; they are expected to reach $340bn in 2020 and over $400bn in 2023.

Aycı added: “The Istanbul New Airport will be opened by 29th of October this year and it will function as Turkish Airlines’ main operating hub. This mega hub will gradually provide Turkish Cargo up to 4m tons of cargo handling capacity, becoming one of the top five air cargo brands of the world. The flow of e-commerce products globally with this joint venture and via Istanbul mega hub will provide maximum value to our customers worldwide.”

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