JD launches China-UK air cargo service

Chinese e-commerce giant adds its first regular freighter offering to Europe, further expanding its international logistics network following the addition of flights to the US and Thailand earlier this year.

Chinese e-commerce giant JD.com last week launched an air cargo service between China and the UK, its first regular freighter offering to Europe, further expanding its international transportation logistics network following the addition of flights to the US and Thailand earlier this year.

The new service operates between Hefei, in China’s eastern province of Anhui and London Heathrow with three weekly frequencies using a B747-400F operated by Air Moldova. Currently, cargo mainly includes e-commerce and general trade products.

Stard Huang, president of JD’s international logistics division, commented: “We are committed to leveraging JD’s global supply chain, logistics and other infrastructure services to help boost the development of cross-border e-commerce and trade around the globe. We will also take the launch of this charter route as the opportunity to continuously upgrade our global logistics layout.”

By connecting supply from warehouses in Shanghai and Shenzhen, JD said the freight route will be able to deliver products from China’s major manufacturing regions in the north, east and south of the country. “The flight will enable transportation to European clients in as fast as 48 hours.”

2 US air cargo route

As to whether JD is planning the launch of cargo flights from China to other destinations in Europe and elsewhere, a company spokesperson said: “We are constantly looking for the opportunities to build cargo flights in the worldwide.”

Last month, JD launched twice-weekly flights between Shanghai Pudong and New York JFK, the company’s second China-US air cargo service following its Nanjing-Los Angeles route which commenced in June. It is operated by a China Eastern Airlines’ B777F.

The Nanjing and Los Angeles service is operated three times a week, also by China Eastern. JD also launched a China-Thailand flight in May this year.

UK warehouse

In another development, JD opened a self-operated warehouse in the UK recently, “enriching its warehouse layout in the Europe in addition to its warehouses in Poland and Germany,” it said. “The combination of the freight route and local warehouse in the UK will enable an end-to-end transportation to facilitate the fast growing cross-border trade. The warehouse will also be open to local merchants in UK.”

The 12,000 sqm warehouse is located in Lutterworth, in Leicestershire and handles both domestic and cross-border distribution for B2C and B2B shipments, the spokesperson added.

IPO for logistics arm

In May this year, JD.com floated its logistics subsidiary, JD Logistics, on the Hong Kong Stock Exchange – raising about US$3.1 billion through an IPO and plans to use the funds to finance international expansion, upgrading its logistics networks and developing advanced technologies.

JD Logistics increased its revenue by nearly 54% to RMB48.5 billion (US$7.5 billion) for the six months ended June 30, 2021.

However, the company also dropped into the red with an operating loss of RMB1.8 billion (US$283 million) and a heavy net loss of RMB 15.2 billion. This was mainly due to changes in share valuations along with lower government financial support for COVID-19 related costs and sizeable increases in personnel costs, operational investments and other spending.

The interim results also showed that JD Logistics had approximately 50 bonded warehouses (in China) and overseas warehouses, covering an aggregated gross floor area of over 500,000 sqm.

The focus of JD’s international logistics business has been working with enterprises to help them shorten cross-border delivery time and build up their global distribution capabilities. The e-commerce and logistics powerhouse targets to build a “double 48” network to deliver from China to the destination country within 48 hours and deliver to end customers within 48 hours.

Source: Lloyd’s