New airfreight company China Cargo Airlines will invest RMB2.05 billion (US$304.83 million) in a new cargo joint venture that will have 20 aircraft as it prepares to compete in the international market.
Cargo sales in China reached US$540 million this year, up 35% from last year.
But getting into this market is not easy task. The foreign giants have already nailed down about 80% of the international cargo market in China.
The cargo company has applied to the State Post Bureau for permission to offer express services.
Global Times reported Cao Yin, a consultant with Frost and Sullivan, as saying, "Overseas cargo players such as UPS and FedEx have a total solution covering planes, vehicles and storage, and they can track parcels. Chinese firms don’t have that level of logistical sophistication yet. Another handicap is the number of aircraft."
China Cargo Airlines will only have 20 aircraft compared with the hundreds of planes in the UPS and FedEx fleets, Cao said.
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