Business and foolishness

Cargo Facts:

China’s third largest express delivery company, YTO Express Airlines, has formally announced plans to introduce at least three widebody freighters into its fleet by 2018 as it prepares for international expansion, reports China Aviation Daily. Given that e-commerce giant, Alibaba is a major equity stakeholder in the airline, and that Alibaba’s logistics network Cainiao works closely with YTO Airlines, international expansion has only been a matter of time.

YTO Airlines’ parent company YTO Express’ operates a robust ground delivery network with more than 82 transit centers and 32,000 vehicles in over 100 cities. But with the boom in online shopping, the company last year launched its own air arm, YTO Express Airlines, and has been scrambling to add freighters.

YTO Airlines currently operates two 737-300Fs, and charters five additional freighters, in addition to utilizing belly space on domestic passenger aircraft. In February of this year, the company placed a firm launch order for ten 737-800BCFs from Boeing, with options for 10 more. The first of these will not be available until 2018, but YTO will continue to add 737 Classics to its fleet, and reportedly hopes to operate eight aircraft in its own livery by the end of this year.

Although much of the next two years will be spent doing the necessary prep work for international expansion, YTO Airlines hopes to soon catch up with rapidly growing SF Express – which has already added two freighter-converted 767-300BCFs to its fleet and has three more on order.

YTO Express Chairman Yu Weijiao said the company’s first target for international expansion will be emerging markets to feed growing e-commerce demand for Chinese goods. This year YTO opened branch offices in Russia, Zimbabwe, Japan and Seoul and is planning to open warehouse and transit centers in at least four other countries by year’s end.

During a panel discussion on the impact of e-commerce on the airfreight industry at this year’s Cargo Facts Asia, Cainiao’s Director of Cross-border E-commerce Steven Li identified Russia as a particular target. Cainiao alone oversees more than 500,000 packages moving into Russia every day, but with enormous service gaps, it can take over 60 days for Russian customers to receive their e-commerce parcels from China. YTO Express Airlines Chairman, David Su added “Overseas demand for Alibaba products is skyrocketing, we have to be able to deliver cost-effectively within 48-72 hours from the time they place their orders.”

China is in the process of creating multiple FedExes to serve a populace 75% of whom are shopping via their phones. China’s stock exchange for internet start-ups has a market cap of $374 billion. Meanwhile, what’s going on in the US and the West? Nonsense. Rot. And more nonsense.

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