Hong Kong Air Cargo (RH, Hong Kong International) and Cainiao Smart Logistics Network, an affiliate of China's Alibaba Group, have entered into a partnership that has seen the launch of cargo flights via an e-commerce hub located near Hong Kong International.

A first consignment set off on March 23, 2021 from the airport, according to a statement by the cargo specialist, which is a subsidiary of Hong Kong Airlines (HX, Hong Kong International).

To meet increasing cargo demand and to build Hong Kong’s e-commerce hub, the carrier has applied for permission to add nine destinations to its current network. Hong Kong Air Cargo currently operates five A330-200Fs to destinations across Southeast Asia, including Almaty International, Dhaka, Hangzhou, Hanoi Noi Bai International, Ho Chi Minh City, Istanbul Airport, Kuala Lumpur International, Shanghai Pudong, Singapore Changi, Taipei Taoyuan, and Zhengzhou.

In the first phase of the partnership, Cainiao will use its logistics e-commerce hub to send up to seven flights to the Philippines, Malaysia, and Thailand each week to meet the growing e-commerce logistics demand in Southeast Asia. Cainiao expects to ship 250,000 packages to Southeast Asia every week. Outbound cargo will be transferred directly through the e-commerce hub, shortening delivery times to the Philippines, Malaysia, and Thailand by up to 60%, meaning consumers in those countries should receive their purchases within three days.

To date, parcels had to be transported to a warehouse in Hong Kong for sorting and order consolidation and then transported to the airport to be shipped to Southeast Asian countries.

“It has always been our goal to establish Hong Kong as an express eCommerce hub and this partnership is most definitely a step in the right direction,” commented Hong Kong Air Cargo Commercial Director Jeffrey Zhang.

Cainiao Global Supply Chain General Manager James Zhao said: “As one of the fastest-growing eCommerce markets in the world, Southeast Asia is projected to achieve a 23% CAGR to reach USD172 billion in 2025. With more cross-border e-commerce goods moving from Mainland China to Southeast Asia, the launch of cargo flights via Cainiao e-commerce hub will allow us to create a seamless logistics network that will improve efficiency and reduce shipping time. The partnership with Hong Kong Air Cargo will further safeguard air freight stability and cost efficiency to benefit merchants and consumers in the region. In the near term, we aim to expand our air freight network to more countries and regions to achieve our goal of delivering globally within 72 hours.”

The companies said air cargo demand for the first quarter of 2021 continued to remain strong, but the COVID-19 pandemic had created supply and demand issues as a result of the lack of passenger-cargo belly capacity. In 2020, Hong Kong Air Cargo had carried a total of 238,000 tonnes of cargo, representing an 8.1% increase on 2019.