CHINA's courier giants are launching air cargo airlines to share in the rising demand for air freight that grew 18 per cent over last year, and continues to grow even as the Covid crisis subsides, reports Seoul's Kr-Asia.
Intense competition has already begun, with courier giants China Post, SF Express, JD.com and Cainiao all vying for top spot.
The price wars in 2020, triggered by Jakarta's J&T Express forced many delivery companies to lower their prices to maintain market share, said the report.
From January 2021 to September 2021, the business volume of domestic express service enterprises in China increased by 36.7 per cent year on year to 76.77 billion packages, but the revenue per package fell 11 per cent to CNY9.68 (US$1.39).
The price war demonstrated that the low-price small profit margin business mode was unsuitable. This sparked a move from price competition to value competition, with more courier companies looking to air freight to provide better service.
The market demand for global air freight is currently at an all-time high. According to the International Air Transport Association (IATA), the market demand for global air freight increased by 6.9 per cent in 2021, 18.7 per cent higher than that of 2020.
What's more Boeing's global market outlook, estimates that the average annual growth rate of global air freight traffic will be 4.3 per cent in the next 10 years and 4.1 per cent in the next 20 years; in 2041, international air freight turnover will reach 600 billion ton-kilometres.
The industry is currently dominated by China Post, which has 33 planes, 173 trains, and an annual income large enough to put it on the Forbes Fortune Global 500 List every year.
Its subsidiary company, China Postal Airlines, saw a period of rapid growth following its establishment in 1996. It currently has a Nanjing distribution centre and 35 cities as nodes.
Shenzhen's SF Express set up its own airport. Its air freight subsidiary, SF Airlines, was founded in 2009. Seven years later, it officially announced plans to build an international airport in Ezhou, Hubei Province, benchmarked against Memphis Airport in the United States.
The third courier company to own an airline is Shanghai's YTO Express, which began to establish its plans for air freight as early as 2014. YTO Cargo Airlines was established in June of the following year.
The fourth player, JD Airlines, may have been late to the game, but is a fierce competitor nonetheless. In August 2022, JD announced that its subsidiary Jiangsu Jingdong Cargo Airlines had obtained the air carrier operator certificate.
Next is Cainiao, which does not as yet, have its own airline, but it handles over five million cross-border packages daily and covers more than 200 countries and regions. By the end of 2021, it was collaborating with nearly 40 airlines, gaining access to 106 air routes worldwide and 225 flights per day.
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Intense competition has already begun, with courier giants China Post, SF Express, JD.com and Cainiao all vying for top spot.
The price wars in 2020, triggered by Jakarta's J&T Express forced many delivery companies to lower their prices to maintain market share, said the report.
From January 2021 to September 2021, the business volume of domestic express service enterprises in China increased by 36.7 per cent year on year to 76.77 billion packages, but the revenue per package fell 11 per cent to CNY9.68 (US$1.39).
The price war demonstrated that the low-price small profit margin business mode was unsuitable. This sparked a move from price competition to value competition, with more courier companies looking to air freight to provide better service.
The market demand for global air freight is currently at an all-time high. According to the International Air Transport Association (IATA), the market demand for global air freight increased by 6.9 per cent in 2021, 18.7 per cent higher than that of 2020.
What's more Boeing's global market outlook, estimates that the average annual growth rate of global air freight traffic will be 4.3 per cent in the next 10 years and 4.1 per cent in the next 20 years; in 2041, international air freight turnover will reach 600 billion ton-kilometres.
The industry is currently dominated by China Post, which has 33 planes, 173 trains, and an annual income large enough to put it on the Forbes Fortune Global 500 List every year.
Its subsidiary company, China Postal Airlines, saw a period of rapid growth following its establishment in 1996. It currently has a Nanjing distribution centre and 35 cities as nodes.
Shenzhen's SF Express set up its own airport. Its air freight subsidiary, SF Airlines, was founded in 2009. Seven years later, it officially announced plans to build an international airport in Ezhou, Hubei Province, benchmarked against Memphis Airport in the United States.
The third courier company to own an airline is Shanghai's YTO Express, which began to establish its plans for air freight as early as 2014. YTO Cargo Airlines was established in June of the following year.
The fourth player, JD Airlines, may have been late to the game, but is a fierce competitor nonetheless. In August 2022, JD announced that its subsidiary Jiangsu Jingdong Cargo Airlines had obtained the air carrier operator certificate.
Next is Cainiao, which does not as yet, have its own airline, but it handles over five million cross-border packages daily and covers more than 200 countries and regions. By the end of 2021, it was collaborating with nearly 40 airlines, gaining access to 106 air routes worldwide and 225 flights per day.
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