Chinese e-commerce logistics company launches cargo airline

Zongteng Group, a major provider of cross-border warehousing and logistics services for e-commerce sellers, announced Monday the acquisition of its first freighter to help customers reach global markets faster.

The news follows a growing trend of online sales platforms, such as Amazon and JD.com, and logistics providers creating private-label airlines to better control capacity and service reliability rather than exclusively rely on scheduled, multiparty carriers. 

Shenzhen, China-based Zongteng Group purchased a second-hand Boeing 777 freighter to increase its warehouse fulfillment capabilities, a spokesperson said. Flight-tracking websites show the plane was previously owned by China Cargo Airlines. Zongteng said Chinese start-up Central Airlines will fly the large, all-cargo aircraft three to four times per week from Shenzhen to the Middle East and Europe for subsidiary YunExpress.

The initial route, which was inaugurated Sept. 30, connects Shenzhen with Riyadh, Saudi Arabia. The  spokesperson said Zongteng will launch service on its primary route, between Shenzhen and Paris’ Charles de Gaulle Airport, in December. The news release suggested air logistics service will eventually extend to North America.

The 777 is a long-range twin-engine freighter, with a maximum payload of 112 tons.

Zongteng last year reported gross sales of $4.4 billion. It has the infrastructure to process an average of 1.4 million parcels per day, nearly 13 million square feet of global warehouse capacity, more than 6,000 employees and 15,000 clients, including Amazon , Shopify and ultrafast fashion online retailer Shein.

YunExpress is a small package freight forwarder that provides end-to-end cross-border delivery service using third-party ocean, road and parcel carriers such as DHL and UPS. It has more than 30 fulfillment centers in the U.S. and Europe, as well as a self-owned delivery network in Europe. 

Other portfolio brands are Elogistic, a provider of domestic direct shipping, warehousing, distribution and returns logistics for e-commerce businesses, and WorldTech, which offers customized logistics services, including customs clearance and less-than-truckload transport.

Central Airlines is a relatively new airline that operates six standard Boeing 737 freighters, in addition to Zongteng’s 777.

Zongteng’s move to launch an in-house airline resembles how ocean carriers Maersk, CMA CGM and Mediterranean Shipping Co. have launched their own airlines so they can provide large customers with a suite of end-to-end services depending on their circumstances and requirements.

Many freight forwarders since the start of the COVID crisis have locked up dedicated capacity through long-term leases with cargo airlines, essentially creating a private airline without owning aircraft.

Meanwhile, the logistics arm of Chinese e-commerce platform JD.com has gone from leasing aircraft and outsourcing crew and maintenance to having a certified airline with its own pilots. Alibaba, Amazon and South American e-commerce giant Mercado Libre have air cargo fleets that are operated on their behalf by contractors. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

RECOMMENDED READING: 

JD.com flies freighters with own pilots. Will Amazon Air follow?

Mercado Libre’s new S. American air cargo network mirrors Amazon model

Zhengzhou airport doubles cargo capacity with new, high-tech terminal

The FREIGHTWAVES TOP 500 For-Hire Carriers list includes UPS (No. 2).

Leave a Reply

Your email address will not be published. Required fields are marked *