The World of E-Commerce: Taking advantage of retail’s online revolution

Carrier partnerships take off for cross-border e-commerce

While the rapidly evolving technology sector has propelled new innovations in e-commerce shopping, not all links in the air cargo supply chain have been able to respond as quickly as they would like to capture that growth, leading to some creative responses from cargo carriers to the question of how to make the fastest shipping method available even faster.

As demonstrated with a host of emerging joint ventures, codeshare agreements and other partnerships, many carriers are finding that what they may not be able to do on their own, they can achieve through working with other carriers or logistics partners.

Dubai-based Emirates SkyCargo, for example, signed a memorandum of understanding (MOU) with Cainiao Smart Logistics, the logistics arm of Alibaba Group, to facilitate cross-border e-commerce deliveries using Dubai as a hub. Under the MOU’s terms, Emirates SkyCargo and Cainiao will work together to “leverage each other’s strengths in cross-border e-commerce trade and airline cargo operation” for e-commerce shipments in the Middle East and neighboring regions, according to a statement from Emirates SkyCargo. While Emirates SkyCargo already offers an expansive delivery network – including more than 155 destinations, and an extensive passenger and freighter fleet – the carrier said it “has been exploring opportunities to collaborate with players in order to offer value-added services over and above cargo capacity between airports.”

In a separate move designed to facilitate cross-border e-commerce, Turkish Cargo, Shanghai-based ZTO Express and Hong Kong-based PAL Air Ltd. signed a partnership agreement in June for the formation of a Hong Kong-based logistics joint venture (JV). The JV is planned to operate as an express and courier company focused on the global e-commerce market, and encompassing the entire logistics chain, including trucking, freight transportation, warehouse management, supply chain management and last-mile delivery.

Turkish Cargo, which operates a fleet of more than 300 aircraft, benefits from the door-to-door capabilities and focus on the Chinese market of ZTO and PAL Air, while it gains access to global markets and the considerable cargo capacity offered by Turkish Cargo, which is set to soon greatly expand its cargo handling capacity with the opening of its hub at the Istanbul New Airport (IST) later this year.

“Because of the innovation and globalization of new retail and e-commerce, China’s logistics industry is provided with tremendous new growth opportunities,” said ZTO Express chairman Mei Song Lai, who added that active expansion of international markets and cross-border business is “an important growth engine of the future.

Capitalizing on the potential of growing e-commerce demand requires growth and seamless operations that can be difficult for carriers to achieve through organic growth alone. This creates an opportunity for carriers to build partnerships, combine the capabilities of several specialized operators, and create an entity that amounts to a “world-class integrator,” in the words of PAL Air vice-chairman Vivian Lau.

–Caryn Livingston