TNT starts direct freight flights to China
TNT starts lately its direct freight flight service between Shanghai and Europe, disclosed Michael Drake, newly named CEO for the Netherlandish express delivery giant’s business in the Greater China Region.
The move is mainly ascribed to the increasing market demand (for freight) between China and Europe, noted the CEO.
An all-new Boeing 747-400ERF all-cargo aircraft, TNT has purchased specifically for the Europe-Sino route, is expected to operate three round-trip flights a week between Shanghai Pudong International Airport and its European forwarding center located in Liege, Belgium since January 18.
The company is set to buy its second Boeing 747-400ERF freighter this May and put it into the new route to drive the number of the route’s weekly flights up to six, added Michael Drake.
The route will link more than 500 Chinese cities in the company’s China delivery network and over 400 European cities that its European operations cover.
Previously, it offered an express delivery service by leasing cabins from commercial airways like China Southern and Eastern Airlines. But the biggest European express delivery service supplier needs more capacity now to meet soaring demand for freight.
The European Union remained the biggest trading partner of China in 2006. Their bilateral trade volume jumped 25.3 percent year on year and made up 15.5 percent of China’s total foreign trade, according to the China Customs.
TNT is accelerating its expansion in China to rival the other three of the world’s Big Four — UPS, DHL, and FedEx, as well as domestic express deliverers in the country.
It announced in December 2005 that it was in talks to take over HOAU Logistics, the biggest freight and parcel delivery operator in Mainland China and headquartered in Heilongjiang, Northeastern China.
The takeover is undergoing the final regulatory procedure now and is predicted to be completed before mi 2007, Michael Drake told journalists. It is worth USD 135 million, aired a government official Tian Yu at the Heilongjiang Provincial Merchants Promotion Conference.
TNT has been surveying the market in the past two months upon the brand value of HOAU. It may keep the Chinese brand for the moment and hopes to create a new one jointly in the long run, said its CEO.
TNT has tried to give express delivery service to a multinational along with HOAU Logistics. The former has taken charge of management including IT system support and procedure control, and the latter has been responsible for the delivery via its transport network, which has cut the cost sharply.
In order to raise its competitiveness in China, the global giant has started focusing on express delivery, a significant change compared with its former strategy with focus on express delivery, direct mail, and logistics.
It announced this August to sell its contractual logistics business to the buyout firm Apollo Management LP at a price of EUR 1.48 billion.
It has also sold its stake in ANJI-TNT Automotive Logistics CO., Ltd., a joint venture between Shanghai Automotive Industry Sales Corporation and TNT Logistics Holdings BV, the subsidiary of TPG (TNT Post Group), to the buyout firm.
TNT inclines to get direct control of its service terminals in China currently, and is expected to increase 9 affiliates in the country in 2007. In the past two years, it obtained expansion through a franchise business model.
