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Volga-Dnepr Group’s cross-border cooperation with Cainiao reveals long-term ambitions at Liège

Charles Kauffman by Charles Kauffman
December 17, 2018
in Carriers, E-Commerce, News
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Earlier this year, the Volga-Dnepr Group firmed up orders for five 747-8Fs and signed an LOI for twenty-nine 777Fs with Boeing. Some of these freighters may soon end up at Liège.

Cainiao, the logistics arm of e-commerce giant Alibaba, has named Volga-Dnepr Group its “preferred carrier for airlift capacity and logistics services” and will be granted “guaranteed access” to the Russia-based conglomerate’s fleet of forty-one aircraft, according to a joint release detailing a recently signed MoU between the two companies.

For the Group and its cargo airline affiliates, which at present include AirBridgeCargo, Atran, CargoLogicAir, and Volga-Dnepr Airlines, the final piece of a 2018 strategy – which has so far included expanded operations at Liège Airport (LGG) and orders for new freighters – is falling into place.

Throughout the year, AirBridgeCargo and CargoLogicAir have been rolling out near-term plans to bolster their respective operations at LGG. The migration toward the Belgian airport began in February 2018 when capacity issues at Amsterdam (AMS) prompted AirBridgeCargo to search for a second hub announced in Europe, and LGG was shortlisted as a potential candidate. In a nod to the airport, the Group signed an MoU to establish a new cargo hub at Liège last July. As part of the agreement, the Group’s UK-based affiliate, CargoLogicAir, would add up to thirty cargo flights per week at the airport. Then, in October, AirBridgeCargo solidified its presence at the airport by signing a ten-year lease and committing to additional flights in the coming years. In parallel with the developments at Liege, the Group also inked orders for five 747-8Fs and an LOI for up to twenty-nine 777Fs with Boeing last summer.  

Cargo Facts has long suspected that Volga-Dnepr’s long-term plans at Liège Airport were likely linked to some kind of deal with Cainiao, which also took an interest in the European gateway beginning earlier this year. In May 2018, Liege was named by Cainiao as one of six sites designated to become global e-commerce logistics hubs, and it was clear that Cainiao expected air freight to play a major role in cross-border e-commerce fulfillment.

Returning to today’s agreement, the MoU covers the Group’s entire portfolio of commercial widebody freighters like the 747-400Fs and 747-8Fs operated by affiliate carriers, as well as the An-124F and IL-76Fs that accommodate outsized cargo. Although Cainiao has not expressed any intent to utilize the heavy-lift freighters to move goods between Asia and Europe, Alibaba’s founder, Jack Ma, has been very vocal about the impact of “New Manufacturing” on e-commerce. Ma envisions increasing demand for customized goods, which will continue to alter supply chains currently based on standardized products. Under this scenario, factories will be more likely to ship made-to-order products directly to a business or consumer, rather than shipping a pallet of commodities to a distributor or wholesaler. Goods of all sizes, including outsized machinery and other components, could end up moving by air with the click of a mouse.

Those interested in learning more about e-commerce and its disruptive impact on air freight are invited to join us Cargo Facts EMEA, to be held 4-6 February at The Westin Grand Frankfurt.  To register or for more information, visit www.cargofactsemea.com.
Tags: 747-8F777FAirBridgeCargo AirlinesAlibabaCainiaoCargoLogicAirLiegeLogisticsVolga-Dnepr Group
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