Air freight between the United States and China is forecast to grow at an average of 9.6% a year over the next 20 years (while traffic to Europe is predicted to grow almost as quickly at 9.3% over the same period).

Charles Kaufman, vice president and head of air freight, Asia-Pacific, for DHL’s Danzas Air & Ocean division, said, ‘The output from the two major airports of Shanghai and Beijing into the United States and Europe is tremendous. Airlines are increasing their flights out of China rapidly.’

The General Administration of Civil Aviation of China recently granted foreign carriers the right to pick up cargo on the Chinese mainland en route to other destinations.

Previously, an aircraft picking up freight in Shanghai, for example, was required to fly directly to its end destination without making stops in between. This new ‘freedom’ — the same sort of ‘freedoms’ are applied to passenger traffic — means that there is room for futher development in the aircargo market between China and the United States.

UPS, FedEx Express, DHL Express and even the U.S. Postal Service are making big investments in hopes of capturing market share in the China region.

John Wheeler, a representative of UPS International, said, ‘We see nothing but growth coming from China and going into China, too. The biggest issue right now is that there is a lack of capacity in and out of China and everybody is feeling the pinch. The result is a series of investments:

UPS announced in August that it will add eight new Boeing 747-400 freighters to its fleet, starting in June of this year.

FedEx announced this summer it is building a new Asia Pacific hub at the Guangzhou Baiyun International Airport in southern China. The facility, which represents a US$150 million capital investment, will allow FedEx to double its capacity in China by sorting up to 24,000 packages per hour.

DHL is investing US$273 million in a five-year China expansion plan that calls for the company to develop and launch China Domestic, a door-to-door express delivery service in China; establish Express Logistics Centers in Shanghai, Guangzhou and Beijing; and establish 16 spare-parts centers across China.
DHL will spend US$12 million to double DHL Danzas Air & Ocean’s presence from 20 cities to 37 by 2007, and will invest US$3 million in two DHL Danzas Air & Ocean Logistics Centers in the Shanghai/Pudong region.

Source: DC Velocity

Over the next few years the German air express and logistics giant DHL will invest more than $110 million in China. The investment will be used to expand infrastructure, including more transport vehicles and service center equipment, and for training its employees.

Klaus Zumwinkel, board chairman of Deutsche Post World Net, which is DHL’s parent company, announced all of this during his latest North Asian trip.
DHL is considering setting up a North Asia hub in either Shanghai Pudong International Airport or Incheon International Airport in South Korea.

Scott Price, CEO of DHL Express Asia-Pacific, said an announcement on which airport is selected will be made by the second quarter of this year. He said, ‘There is still one last filter of analysis to do. It is a very close race between the two airports.’ DHL currently has a Central Asia hub in Hong Kong and South Asia hub in Singapore.

The company’s United States rivals, FedEx and UPS, both have plans to build regional hubs in China. FedEx, previously based mainly in the Philippines, will launch a new Asia-Pacific hub in Guangzhou Baiyun International Airport in 2008.

UPS signed a memorandum of understanding with Shanghai Airport Group last year to establish the UPS International Air Hub at the Pudong airport.

China is one of DHL’s fastest-growing markets, accounting for 25% of its revenue in the Asia-Pacific and 10% of its global sales.
Source: China Daily

According to a research report the vast majority — 80% or more — of China’s overseas express mail services are provided by four foreign logistics giants. These are FedEx and UPS of the United States, DHL which is based in Germany and ex-Australian but now Dutch TNT.

Executive vice chairman Ding Junfa of the China Federation of Logistics and Purchasing said foreign competitors dominate overseas express mail, shipping and logistics businesses aimed at foreign manufacturers and the catering sector.

He said, ‘Domestic competitors will find it hard to break their domination in the short term.’

The report was jointly compiled by the National Development and Reform Commission and the Ministry of Commerce. It said nearly 98% of the clients of the four foreign giants in China were joint ventures or wholly-owned foreign companies.

Domestic logistics firms were unable to break out of the low-value sector of the market. Worth noting is that the report suggested the Chinese government regulate the logistics industry to prevent the formation of monopolies and protect the interests of small and medium-sized firms.
Source: Xinhua

DHL Global Forwarding is the first international forwarder that has obtained the CATA (China Air Transport Association) domestic airfreight license, allowing them to operate to 17 Chinese cities.

The CATA license marks a turning point for DHL in the Chinese domestic logistics market, as it was previously served only by state-owned and local companies.
Peter Landsiedel, chief executive officer – Asia Pacific, DHL Global Forwarding said, ‘We are confident that the license to operate into the domestic airfreight market will provide fresh opportunities and improved management of heavy airfreight from door-to-door for our customers.’

DHL intends to obtain 30 more CATA licences covering 70 cities in China in the next five years. The DHL Global Forwarding Domestic Airfreight services will be operated with domestic carriers such as Air China Cargo, China Cargo Airlines, China Southern and Shanghai Airlines.
Source: Air Cargo News