DHL, FedEx, UPS Expansion of Service To and In China

As The International Air Cargo Association (TIACA) began its first-ever China-based Summit in Beijing on April 17, Yang Yuanyuan, director general of China’s General Administration of Civil Aviation announced that the country would be further opening its air cargo market. Under present agreements, by 2010 the U.S. and China can each have as many as 249 weekly flights to the other country with five additional carriers for both parties allowed to participate in the program.

On the ground, DHL Worldwide Express will be investing $24 million to build headquarters for its express operations in Beijing, bringing its total investments in China, Hong Kong and Macau to $900 million.

Last year China became the top market for DHL in the Asia-Pacific region, replacing Japan in that position. DHL projections are that China’s share of DHL’s Asia-Pacific business to grow from its present 14% to 48% by 2015. Over the next three years, China’s average annual growth rate in international express business will be between 34 to 45%.

UPS has begun direct air service from Shanghai to Europe as well as adding three new flights to connect Shanghai and the U.S. and on e new flight between Qingdao and Incheon, Korea. The carrier now connects Shanghai and the U.S. on non-stop flights nine times each week.

The company is completing a new 425,000 square foot freight and logistics hub in Singapore as well as a new air hub in Shanghai. Last year, UPS began domestic Chinese express package service. It now serves 330 cities in China, which account for 85% of the country’s international trade. According to reports, the first UPS China retail stores will open in Shanghai this summer.

FedEx points out that in 2005, approximately $60 billion of goods left China by air and another $61 billion of goods entered China by air. Exports from the U.S. to China since 2001 have nearly doubled from $19 billion to $37.6 billion. Overall trade between the two countries has doubled since 2001, from $121.5 billion to $260.6 billion in 2005.

FedEx Express has been awarded three additional weekly frequencies to China by the U.S. Department of Transportation, bringing its total to 26 all-cargo flights.

The carrier began construction of a new $150 million Asia-Pacific hub in Guangzhou. At present more than 200 Chinese cities are part of the FedEx international network with another 100 cities projected to be added over the next few years.

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