TNT predicts little impact from Chinese law changes

China’s new postal law, which comes into effect from 1 October, will have a negligible impact on TNT’s mail and express delivery business in China, a company spokesman said. He added that the express delivery service supplier will continue its commitment to investing and growing in the country.

The company has launched a new dedicated B747-400 extended range freight service between Hong Kong and Liege in Belgium, TNT’s European air hub.

TNT said the non-stop cargo flights, three times a week from Hong Kong and probably four times a week in the foreseeable future, will enable the company to offer faster transit times, greater control and visibility over shipments to Asia, the Pearl River Delta region in South China, and Europe.

“I don’t think the new postal law will influence much of our business in China, as our business primarily focuses on international mail and express delivery service,” said Michael Drake, regional managing director for TNT North Asia.

China’s new postal law gives exclusivity to State-owned post offices for intra-city express delivery of items under 50g and intercity delivery of items under 100g, which means that private mail services may lose 80% of the express delivery market.

“The new freighter service will definitely improve TNT’s business network in China,” said Drake.

According to Drake, the east and south of China are the nation’s two key regions that have the most freight that relies on express delivery by air. The new service supplements a similar service between Shanghai and Liege, which was launched in early 2007, while further enhancing the connectivity between TNT’s leading express networks in the two regions.

“With its geographical and economic proximity to the Pearl River Delta, Hong Kong is a natural choice as a hub for serving customers in the south of China. It will add to TNT’s other Asian international hubs: Singapore, Shanghai and Beijing,” he said. “And with our integrated air and road delivery capabilities in China and Europe, we are well-placed to capitalise on the strong trading links between the two regions,” he said.

“International express delivery is recovering amid the challenging economic situation globally. The investment in the new freighter service is well justified.”

Drake said TNT would continue to invest in China but has not set any investment plan. The acquisition of Hoau in 2007 has also helped TNT.

“In fact, we are already seeing encouraging results from our investments in Asia. TNT is the leader in Sino-Europe express services in China and we are excited about creating a leadership position in the Chinese domestic road arena through our wholly-owned subsidiary TNT-Hoau,” added James McCormac, regional managing director of TNT Asia Pacific.

According to McCormac, the initial flights on the Hong Kong-Liege service will fly at full capacity.