Westward Ho: How a new Chinese cargo carrier can revive an ancient Silk Road outpost

But how far west?

Although few experts doubt demand for international airfreight consolidations into and out of western China will grow in the coming years, not all are convinced that Xi’an is destined to become a major gateway. “Looking at the development of traditional airports, limited slots with a preference for passenger aircraft, increasing flight delays etc., it is very much conceivable that there will be a stronger segregation between passenger-focused and freight-focused airports in the future,” said Alexander Korte, senior director of operations for air and ocean in North/Central China for Denmark-based forwarder DSV.

Korte believes that Zhengzhou Airport (CGO), which has long been courting cargo operators, may have the edge when it comes to competing with gateways like Xi’an. “Next to our established hubs in PVG [Shanghai Pudong], PEK [Beijing] and, to some extent, CTU/CKG [Chengdu/Chongqing], our company has been quite active to develop CGO as an additional gateway, servicing origins across the country.”

Not only has Zhengzhou already emerged as a popular consolidation point for shippers willing to accept longer transit times in exchange for lower pricing, the appeal goes beyond cost, said Korte. In recent years, the Henan provincial government has worked to establish a free trade zone and improve customs clearance processes. Additionally, it has made “strong investments into Cargolux, which serves as a backbone high-quality carrier to service this market.” Zhengzhou’s other advantage, Korte said, stems from the growing presence of industrial giants like Foxconn in the region, which “will create, so to speak, a more-healthy year-long baseload for the location.”

Huang Yu, a former cargo airline executive and CEO of aviation consultancy Gpool, concurred that Chengdu, Chongqing and Zhengzhou will continue developing as tier-two cargo hubs, and said he expects annual double-digit volume growth over the next five years. Still, he doubted the prospect of any hub displacing Shanghai Pudong, “I don’t think any of the tier-two hubs can rival PVG,” he said. “They lack air capacity, and lack the support of a strong sea port.”

Even if forwarders are drawn to other gateways, China Northwest International Airlines could still make Xi’an a sizable express hub. After all, the location of an express hub is much at the discretion of the integrator, and in conjunction with the Xi’an start-up carrier’s launch, YTO Express is building a massive express sortation center. Such a hub will ensure that cross-border e-commerce volumes flow smoothly into and out of China through the ancient capital.

YTO’s Su remains assured that Xi’an is bound to become the central spoke of the Silk Road of the skies, as it was centuries ago in the age of wagons: “Xi’an will develop into one of the best multi-modal hubs in China, as it becomes the leading city in Western China.”