Aviation is becoming a place of arms for logistics companies.
"No aircraft courier company is not a real courier company." Yuan Shuai, a senior researcher at the China Institute of Engineering and Technology in Beijing, said in one sentence the current hot scene of courier companies competing to develop air logistics.
Recently, Jiangsu Jingdong Cargo Aviation Co., Ltd. received the CCAR-121 Department of Civil Aviation Administration of China issued the "Air Carrier Operating Certificate of Compliance", indicating that Jingdong Airlines officially put into operation.
In addition to this, companies such as SF, Yuan Tong, CaiBird, Post and Polar Rabbit are also working closely on the layout. As of September 2022, the number of all-cargo aircraft in operation of SF Airlines has grown to 75, with a total of more than 80 domestic and international air access sites, and the echelon capacity of long-, medium- and short-haul transportation has become a scale.
On July 17, the first cargo hub airport in Asia, Ezhou HuaHu Airport, jointly built by SF and the government, was also officially put into operation.
This year, Yuantong has introduced six aircraft. It is reported that in the second half of the year, it will also increase its efforts to introduce all-cargo aircraft to continue to expand the scale of capacity, and plans to reach the end of 2022, the scale of the fleet of Yuan Tong Airlines to about 20 aircraft.
Cainiao is also building a global logistics network, chartering more than 240 charter flights per month for mainline transportation. China Post has also been making moves in aviation over the past few years, opening international routes such as "Nanjing-Osaka", "Guangzhou-Tokyo" and "Dalian-Osaka". -Osaka" and other international routes, forming China Post's own airline network.
The company has also followed the pace of Pindo to the sea and entered the airline market, signing a strategic cooperation framework agreement with HNA Cargo Co.
At the beginning of 2022, black swan events such as the Russia-Ukraine conflict and the outbreak of Omicron occurred frequently, and the air transport industry as a trade link faced unprecedented challenges. The development of air cargo, often hundreds of millions of dollars in start-up capital, why courier giants still have to increase the code? From a short-term and long-term perspective, what exactly can air cargo bring to the market?
Air cargo outbreak against the trend
Since the outbreak of the epidemic, in the case of weakening demand for air passenger transport, air cargo as a basic demand instead of a surprising outbreak of growth force.
In the last year, the three major state-owned airlines combined loss of 41 billion yuan, before the South China Airlines logistics a solo, net profit of 5.7 billion yuan, followed by the East China Airlines logistics profits increased by 53%.
According to IATA data, compared with the pre-epidemic, global air cargo market demand in 2021 grew by 6.9%, up 18.7% from 2020, which is the second largest increase recorded since 1990 (second only to 20.6% in 2010).
In terms of revenue generation, global air cargo revenue reached RMB 1.1 trillion by the end of 2021 and is expected to remain at nearly RMB 1.07 trillion in 2022.
The surge in demand has also exposed the current shortcomings of air cargo in China.
Since the outbreak of the New Crown Pneumonia, civil aviation passenger and cargo traffic has been polarized. Civil aviation passenger traffic is scarce and revenue is dismal, while air cargo demand is strong, capacity is tight and prices are high, and the traditional "heavy passenger and light cargo" business model has been difficult to meet market demand.
In the past, a large amount of cargo was transported through the belly of passenger aircraft. Passenger aircraft belly space is limited, allowing only baggage items, parcel items and small quantities of cargo.
Take a Boeing 747 for example, including crates and bulk cabin industry load in about 20-25 tons, cargo volume in 170-175 cubic meters. The reduction of air passenger traffic leads to idle aircraft at the same time also lead to a decline in cargo transportation turnover capacity. According to IATA statistics, the impact of the new crown epidemic, a large number of international passenger flights cut, June 2021 belly capacity fell 38.9% year-on-year, the air transport gap is huge.
Cargo dedicated aircraft become the main force of development. Most high-value cargo such as machinery and electronics and cold chain still need all-cargo aircraft for transportation. Compared with the belly capacity, the main cabin of all-cargo aircraft can be loaded with large containers, commonly used commercial large all-cargo aircraft load capacity of about 100 tons, the world's largest all-cargo aircraft load capacity has reached 250 tons. And all-cargo aircraft are not limited by the time, especially in the midnight to early morning transport, to improve the overall timeliness.
However, according to the National Development and Reform Commission Infrastructure Development Department of the first-class inspector Ren Hong had said at a press conference, the national view, China's air cargo is still in the primary stage.
From what is known, as of the end of 2021, mainland Chinese airlines have 198 all-cargo aircraft, accounting for only 5.2% of the total civil aviation transport fleet. And foreign freight carriers, only Fedex (FedEx) has 469 freighters.
The capital's sense of smell is the sharpest. On the one hand, under the influence of the epidemic, the demand for epidemic prevention materials, e-commerce pieces of transport is enhanced, and on the other hand, the shortage of air cargo capacity, a huge market gap needs to be filled.
According to the "China Cross-Border Air Cargo White Paper (2022)," 2019 to date, China's cross-border air cargo market has experienced mild growth, turbulent adjustment, and order reorganization in three stages: at the beginning of 2019, despite the fluctuations brought about by the trade war between China and the United States, air cargo as a whole is still thriving; in 2020 due to the outbreak of the epidemic, the supply chain shutdown, international flight meltdowns, etc. make air cargo In 2020, due to the outbreak of the epidemic, the supply chain shutdown, international flight meltdown, etc., the air cargo supply-demand inversion is serious and adjusts in the turbulence; in 2021, the market enters the reconstruction of the new order after adapting to the adjustment, foreign trade demand steadily recovers, capacity supply measures are introduced one after another, and the market shows a rebound.
At present, the number of Chinese all-cargo airlines is only about 10, in terms of fleet size, the number of all-cargo aircraft of Air China, China Eastern Airlines and China Southern Airlines are 15, 11 and 14 respectively, while the "express system" airlines Shunfeng Airlines and China Postal Airlines have their own all-cargo aircraft of 75 and 29, far exceeding the traditional domestic The airlines are far more than the traditional domestic airlines.
As IPG China Chief Economist Bo Wenxi told Titanium Media APP, "At present, China's air logistics is in the early stage of development and free competition, industry competition to professional airlines as well as Shunfeng, international air logistics giants, has not yet formed an oligopoly."
The vast air cargo market is attracting more and more courier companies to enter.
Into a new performance growth point for courier companies
For courier companies, the huge time-sensitive advantages behind air cargo, not only comes with high profit products, but also derived from many market prospects and possibilities.
"The current courier companies to further competition, mainly in several areas.
The first is fast. For example, SF, the price is more expensive, but the delivery speed is fast, is the first choice of China's high-end consumer users.
The second is the price issue. Cheap price is a competitive weapon.
The third is service. Increase the code of air capacity, mainly to improve the speed of logistics, improve user satisfaction, and thus more competitive among peers.
" Zhang Dexin, director of the Institute of Culture and Tourism Innovation and Entrepreneurship, analyzed to Titanium Media APP, courier companies can independently dispose of air capacity, to reduce costs and improve efficiency and a great help. The main reason is still out of the logistics system, constantly to make up for their own shortcomings. If you cooperate with others will always face problems such as benefit sharing.
IPG China chief economist Bo Wenxi also told Titanium Media APP, "Jingdong, Shunfeng and other courier companies are adding to do code air cargo, is to improve their own service efficiency and customer experience, so as to enhance market competitiveness and sustainable development." Take Jingdong Airlines as an example. since 2017, Jingdong Logistics has started to develop air cargo business.
At the beginning of development, it is due to the rapid development of express, express and cold chain business, the volume of aviation business is increasing day by day, and it is difficult to support the huge business volume of Jingdong Logistics' integrated supply chain logistics by relying on passenger aircraft belly and chartered aircraft alone, so it is imperative to establish and cultivate an independently controlled, safe and reliable route network and cargo collection capacity to reduce freight costs and improve freight efficiency.
At present, Jingdong Airlines mainly serves high-end consumer, high-end manufacturing, medical and fresh food industries, and mainly carries goods with high requirements for timeliness and high cargo value. Strategically, Jingdong Airlines provides an important capacity supplement to Jingdong Logistics' integrated supply chain logistics, and at the same time becomes an important part of Jingdong's integrated supply chain logistics service to reduce costs and increase efficiency.
Now, the outbreak of cross-border e-commerce overlaid with the epidemic has once again boosted air cargo. According to customs statistics, China's cross-border e-commerce imports and exports have grown nearly tenfold in the past five years, reaching 1.92 trillion yuan in 2021, an increase of 18.6%. Vice Minister of Commerce Sheng Qiuping said at a press conference that more than 30,000 enterprises have filed on the online comprehensive service platform in the cross-border e-commerce comprehensive pilot zone.
McKinsey expects cross-border e-commerce cargo to account for 22 percent of global air cargo in 2022. Its analyst Tobias Wlfel said that with the gradual smooth flow of air and sea transport, the supply chain tends to stabilize and the momentum of cross-border e-commerce is unabated, it is expected that 70%-80% of cross-border e-commerce pieces are mainly completed by air transport. The air cargo market has seen a period of rapid development. This is also reflected in the financial data of courier companies.
Take Yuantong as an example, in the mid-2022 financial report, Yuantong's aviation business operating income rose 39.96% year-on-year, and the proportion of aviation business occupying the total revenue of courier enterprises is rising, which also indicates that air cargo is another performance growth point for courier enterprises. "Logistics industry enterprises layout air logistics, reflecting the enterprises focus on the future competitive landscape, get rid of the current quagmire of rough competition, is a reflection of domestic courier enterprises continue to look for direction." Yuan Shuai, a senior researcher of Beijing Zhongwu Huicheng Engineering Technology Research Institute, said too Titanium Media APP.
According to him, air cargo is an important strategic resource, with the characteristics of high value-added carriage of goods, fast and efficient. With China's economy shifting from the stage of high-speed growth to the stage of high-quality development, e-commerce and express logistics industry continues to grow rapidly, the proportion of air express is rising, the business model of enterprises is extended from cargo transportation to the whole industry chain, traditional air cargo enterprises gradually change to air logistics enterprises providing full process services, and new air logistics enterprises will continue to emerge and grow rapidly.
How far from the international logistics giants?
Domestic express competition tends to be saturated, but there is still enough room for growth in the global air logistics field. However, in the international air cargo market, compared with Europe and the United States, China's air cargo has just started.
Observe the three global logistics giants FedEx, UPS, DHL. they are in Asia to Hong Kong, Singapore as the central hub, Latin America layout to Miami-based, air layout network is surprisingly similar.
In terms of freighter holdings, FedEx has 684 freighters in service by the end of 2021, followed by UPS with a fleet of 624 aircraft in service. DHL, meanwhile, added seven Boeing 767 freighters to meet e-commerce demand in the Middle East and placed its largest-ever single freighter order with Boeing in the same year. They both increased their international cargo routes from the Asia-Pacific region.
In 2021, UPS's average revenue per piece was as high as US$12.32, up 12.6% year-on-year, due to the high growth of supply chain logistics segments such as ocean and air freight. However, observing domestic express companies, few have their own all-cargo aircraft.
By the end of 2021, mainland Chinese airlines had 198 all-cargo planes, accounting for only 5.2% of the total civil aviation transport fleet. Only 30% of China's air cargo is carried by all-cargo aircraft, which is lower than the global average. Currently has the largest number of all-cargo aircraft Shunfeng, only 75, compared with the current international logistics enterprises, there is still a long way to go. Express delivery companies to develop air cargo mainly have two situations, one is the independent purchase and operation of cargo aircraft, one is to cooperate with other airlines chartered aircraft for transport business.
At present, the passenger aircraft belly transport is still the main mode of transport of Chinese air cargo, accounting for about 70% of the total air cargo. Among them, in the domestic routes, the volume of passenger aircraft belly class transportation accounted for 82%, in the international routes, passenger aircraft belly class transportation accounted for 49%. This has led to the fact that China's air cargo is dominated by narrow-body aircraft and by short- and medium-haul domestic routes, with unstable cargo volume and freight prices.
At present, in addition to the small amount of cargo aircraft, air cargo has more problems to be solved. Park said to Titanium Media APP, "the current development of air cargo needs to be resolved in the capacity, capacity and demand mismatch, intermediary services are not developed enough, the level of collaboration between enterprises is low, the industry does not play enough efficiency and other issues.
From the perspective of the industry, should strengthen communication and coordination and open collaboration, make full use of and play the existing capacity capacity and infrastructure effectiveness, to promote the overall efficiency of the industry." In his view, if the domestic courier companies want to grow into international logistics giants, in addition to scale growth and efficiency improvement, may also be through industry collaboration, joint, and even mergers to produce a small number of industry giants, in order to become the leading domestic industry companies competing with international giants.
For courier companies, the development of air cargo should be focused on improving their own service efficiency, and based on this horizontal expansion, in order to achieve better development. Air cargo as an important strategic resource, not only to drive regional economic development, but also to effectively link the national and global economic belt, to achieve efficient integration between industry and social supply chain.
For this reason, the relevant national policies are also encouraging the development of air cargo by express companies, in an attempt to cultivate international logistics giants. In December 2021, the Civil Aviation Administration of China, the National Development and Reform Commission and the Ministry of Transport jointly issued the "14th Five-Year Plan" for the development of civil aviation.
In February 2022, the Civil Aviation Administration issued the "14th Five-Year Plan" for the development of aviation logistics, the first special plan for aviation logistics. The National Development and Reform Commission and the Civil Aviation Administration jointly issued the "Opinions on Promoting the Development of Air Cargo Facilities", which proposed to comprehensively improve the effectiveness of the use of air cargo facilities. Encourage air cargo enterprises and express logistics enterprises to break the ownership restrictions, accelerate the cultivation of large express logistics enterprises with international competitiveness, with large express logistics enterprises as the main body, the formation of its cargo airlines as the main base airline, participate in the leading professional cargo hub airport planning, construction and operation.
Air cargo not only ushered in a period of rapid development, but also is in the policy dividend period.
In recent years, China's rapid development of air logistics, not just to provide logistics and transport services, but has formed a customer-centric, throughout the cargo organization, ground transportation, airport cargo station services, air transport, delivery and other aspects of the entire chain of air cargo services, becoming an important part of modern logistics. As Yuan Shuai said, "the air cargo network has been an unavoidable part of the comprehensive transport network of express enterprises, and will also provide strong support for the future international network layout and long-term sustainable development of business for logistics enterprises.
The advantage of China's express industry is the high-density network layout brings relatively high timeliness.
With an eye on the global economic market, China's logistics industry market should not be limited to the domestic, more should have a global perspective, to seize the international market." According to the "Global Business Market Outlook" released by Boeing, the next 10 years of global air cargo volume is expected to grow at an average annual rate of 4.3%; the next 20 years of global air cargo volume at an average annual growth rate of 4.1%; in 2041, the global freight turnover reached 6000
The expanding air cargo market is bound to become a competitive market for global logistics companies. Jingdong, SF, China Post and Yuantong have all set up their own cargo airlines to lay the groundwork for the upcoming international competition in the market, and many express giants and traditional cargo airlines are also working on this.
