Friday, January 6, 2012

China - Logistics Operator Opens New Office and New Air Freight Service Starts

First Presence in Inner Mongolia for Schenker Whilst Dalian Helps Plug Jade Cargo Gap
Shipping News Feature

CHINA – ‘As one door closes’ a new air cargo carrier commences services in the same week one closes and a European forwarder expands its operations in the country. German multi modal freight forwarder DB Schenker was amongst the first tranche of European logistics companies to venture into, what was then the comparatively small market of mainland China back in the 1970’s. The company opened its first representative office in Beijing in 1982 and has increased its presence there steadily ever since.

Now, with a new branch office in regional capital Hohhot the company has entered new territory with its first presence in the Inner Mongolian Autonomous Region. The ‘Blue City’ is a major tourist attraction and is the commercial, political, cultural and economic centre of Inner Mongolia with a thriving woollen textile industry and a food industry considered absolutely vital to the area including the headquarters of dairy groups Yili and Mengniu, both of whom were caught up in the great Chinese milk scandal of 2008 when their products were found to contain melamine and as a result lost their status as national brands.

Products from the region include medicine, wind power, coal, machine tools, and fibre optic cable which together have elevated Hohhot to be rated as one of the ten most dynamic cities in China’s economic development. Hohhot Baita Airport has over 40 air routes connecting Hohhot with other major cities in China and additionally there are international flights to Ulan Bator, Mongolia, and Russia with good rail links plus the Huwu Highway, constructed in 2006, which links Hohhot to northern regions.

Meanwhile Dalian Airlines, a partially owned subsidiary of Air China, has started services, initially principally passenger but likely to take in hold cargo, as of New Years Eve, ironically the very day Jade Cargo announced it was suspending services due to a general downturn in the air freight market in Asia. It seems likely that there will be a rapid expansion of the new airlines services as Dalian is a key hub for other Asian giants like South Korea and Japan and Air China may be after seizing part of the market share from rivals China Southern.