An important advance in the development of the Chinese economy has been marked by DHL’s opening of its wholly owned Chinese domestic air freight forwarding service.

DHL will now offer air freight forwarding services to 17 cities in China using the services of the smaller domestic cargo airlines. These are China Cargo Airlines, Air China Cargo, China Southern and Shanghai Airlines. It is unclear whether DHL will use capacity on Cathay Pacific’s Dragon Air, the only other international and domestic air cargo network, and until now a near-dominant player.

Previously all domestic forwarding and cargo services were provided either by the Chinese air transport operators, Chinese freight forwarders such as Sinotrans, or joint-ventures such as DHL’s own joint venture ZF-Danzas based in Shanghai.

What DHL’s new service offers is a network of forwarding locations including warehousing and an IT network in important Chinese locations. Under DHL’s ‘First In China’ programme, the company is planning to expand its presence out to 30 cities and is already investing in key hubs such as Hong Kong in order to support this growth.

As DHL makes clear in its press release, the company is planning to target the big exporting sectors in and around Shanghai and Guangzhou, in particular the electronics industry. The latter is a heavy buyer of airfreight services but needs to develop the quality of its supply chain processes within China.

DHL’s development as an air forwarder has been facilitated by winning a license from the China Air Transport Association. This is the first non-Chinese company to gain such a license. Western nations have been pressuring China to open up its logistics services market as a part of its membership of the WTO and a number of LSPs have wholly owned facilities mainly in the form of warehousing and consolidation centres. This new development however represents a major advance.

Source: Transport Intelligence

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