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| 09/18/2007 10:20 AM |
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Investment in mainland China gathers momentum
By Phil Hastings
London - Latest evidence of the global express industry's continuing commitment to substantial investment in China was provided earlier this month when DHL announced further expansion of its dedicated air capacity between Hong Kong and Beijing.
Other significant examples of that trend already unveiled this year have included UPS formally starting construction of a new international air hub at Shanghai's Pudong Airport, FedEx acquiring the express business of Chinese group DTW and introducing a next business-day service across the country, and US-based time-sensitive transport service provider World Courier launching a nationwide cold logistics network geared to meeting the needs of the pharmaceuticals sector.
The fundamental reasons for such investment by the international express industry were summed up by senior executives of FedEx, UPS and DHL when they talked about the factors behind their own latest individual corporate developments in China.
"China continues to be one of the fastest growing markets in the express industry and a key to FedEx international growth and profitability," stated Michael Ducker, president of FedEx Express International when the company confirmed at the beginning of this year that it had completed the DTW deal, buying the latter's previous 50 percent share of the FedEx-DTW International Priority express joint venture and its domestic express network in China for approximately US$400 million.
A few months later, FedEx Express launched a domestic next day business service in China, initially covering 19 cities but subsequently rapidly expanded to 30, alongside a 48-hour, day-definite operation offered to more than 200 cities.
Similar comments were made by UPS chairman and chief executive officer Mike Eskew following the ground-breaking ceremony for that company's new Shanghai air hub in August.
"Export volume growth in China and throughout Asia has been robust and the outlook remains bright," he said.
Due to open next year, the Shanghai hub will link the whole of China to UPS's international network, with direct service to the Americas, Europe and Asia. It will also connect points served in China by UPS through a dedicated service provided by Chinese all-cargo airline Yangtze River Express. Over the past five years, UPS claims to have invested a total of about $600 million in China.
DHL's assessment of prospects in China was outlined earlier this year when the company announced its launch of a domestic air freight service there.
"China has become one of the most significant logistics markets worldwide, with an abundance of open regulations and huge growth potential," stated Peter Landsiedel, chief executive officer, Asia Pacific, DHL Global Forwarding.
DHL's most recent development in the Chinese market, announced at the beginning of September, involved boosting air capacity between Hong Kong and mainland China with the addition of weekend flights to its overnight operations to and from Beijing to provide a total of 10 frequencies a week. The company is also deploying a larger B727-200F aircraft operated by Air Hong Kong - a 60/40 joint venture between Cathay Pacific and DHL - on that route.
"Customers will benefit from an overall 58 percent increase in payload capacity as the new freighter has a capacity to hold 24 tonnes per sector," added DHL.
World Courier's newest investment in China, announced in August and described by the company as its most aggressive regional expansion initiative to date, involved extending its Chinese cold chain logistics network for transporting biological specimens, investigational drugs and supplies to cover 36 cities. According to World Courier, that coverage now includes every clinical trial location currently approved by the Chinese State Food and Drug Administration.
World Courier claims to be the global leader in the transport of clinical samples, investigational drugs and clinical trial supplies for the pharmaceutical industry with proven experience in the handling of time-critical and temperature-controlled consignments. In China, it operates wholly foreign-owned offices in Beijing, Shanghai and Hong Kong. |
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