YTO plans mega logistics center

To better serve its Yangtze River Delta customers, as well as national demand for faster and safer transportation and distribution, YTO Express Group Co Ltd has decided to invest 12.2 billion yuan ($1.79 billion) in building a mega logistics center in Jiaxing, Zhejiang province.

The aviation logistics hub is tasked to enhance the delivery efficiency and customer experience of the Shanghai-based courier's medium and high-end users, said experts.

Although China had an express delivery business volume of 40 billion items last year, no cargo hub airport has been opened across the nation to date. In addition, there are just 128 cargo aircraft serving the express delivery sector, less than one-fifth of FedEx's cargo fleet, according to a China Business News report.

"China's international express market had been dominated by global giants such as FedEx, UPS and DHL for long, and the aviation logistics hubs built by Chinese enterprises will intensify the competition," Yang Daqing, a researcher from China Society of Logistics, was quoted as saying by National Business Daily.

More than 70 percent of China's packages are delivered by road, and there is increasing demand for air delivery to make the logistics structure more balanced, said Yang.

"By delivery volume, more than 40 percent of China's express delivery business is contributed by the Yangtze River Delta region, and Jiaxing has the advantage of reaching the Yangtze River Delta region, the Pearl River Delta region, Beijing-Tianjin-Hebei region, and the Chongqing and Chengdu city cluster within three flight hours, as well as reaching 140 million people within three driving hours," said Su Xiufeng, deputy chairman of YTO.

After decades of development, China's logistics firms have entered a stage of optimizing and upgrading their business and service, said Yu Nan, an industrial analyst with Haitong Securities.

Last month YTO launched its new express service tailored for medium and high-end clients, promising more efficiency and better service.

"The establishment of an aviation logistics hub for distribution of goods and efficiency improvement comes naturally for leading express delivery firms," said Yu.

Courier SF Express Co Ltd joined hands with Hubei provincial government to develop a dedicated cargo hub in Ezhou, China Business News reported. The specialized cargo hub, which is the first of its kind in Asia and the fourth globally, will become operational by 2021.

Last year, Shanghai-based express giant ZTO signed a strategic cooperative agreement with the provincial airport of Henan province to jointly develop an aviation express distribution center, Economic Information Daily reported.