The hub of all things

Global cargo majors make a beeline for Zhengzhou

With shipments of notebooks, smartphones and other electronics products growing rapidly, Zhengzhou in Henan province is fast emerging as the leading distribution/shipment center in central China for global carriers and freight companies.

"We will open new freight routes to the United States in September, and also increase the number of flights to Europe," says Ma Fei, manager of Henan Air Passenger & Cargo Service Co, at the Zhengzhou Xinzheng International Airport.

Using the existing cargo routes in Zhengzhou, companies like Apple can ship their products to major European markets in just 24 hours. The new linkages will ensure shipments within 24 hours to the major US markets also.

Zhengzhou's growth in the last two years has been astounding, considering that the city did not have any direct international flights from its airport two years ago.

"The big-ticket investment brought in by companies like Foxconn has spawned the need for the establishment of world-class logistics capabilities. Over the last two years, the facilities at the airport have improved considerably and Zhengzhou is now a major destination for many global corporations," says Ma, adding that more than 40 carriers and cargo companies have facilities at the airport.

Located in the center of China, Zhengzhou is also an important transport junction that connects the main railways and highways.

"Since Zhengzhou is easily accessible from all the major Chinese cities, having a shipment/production facility helps companies to easily access the huge market in central China," Ma says.

Trucks from Zhengzhou can deliver goods to major destinations in China like Beijing, Shanghai and Shenzhen in 10 hours. Flights from Zhengzhou connect the major cities that account for more than 96 percent of the Chinese economy in two hours.

"We were one of the first companies to set up shop in the Zhengzhou Xinzheng airport, even before Foxconn announced its plans for the city. We always believed that the city had a great potential as a logistics hub," says Wang Shu, manager of the Zhengzhou operations at AirBridgeCargo, a major Russian cargo airline.

AirBridgeCargo, which currently operates daily flights to Europe, plans to have daily flights to major US destinations and add one more flight to Europe from Zhengzhou next month.

"Before we set up the offices in Zhengzhou, our central China business was largely handled by the Shanghai branch. But with this facility we can now make speedy shipments to and from central China. Though it is a new and emerging market for us, it is important as it helps us to be closer to our major clients," she says.

Another international cargo company that is planning to open a new American route next month is United Parcel Service, the world's largest package delivery company, according to the administrative committee of the Zhengzhou Airport District.

Zhang Xiaobo, manager of the Zhengzhou branch of UPS, says the company has offices in the city and at the airport to cater to the growing market. "Our expansion has been in line with the demands from our clients. Big companies like Foxconn have been the mainstays for the export and import trade in Zhengzhou and also for our business," he says.

Zhang says that the excellent cargo handling facilities at the airport have also contributed in a big way to the business boom. At the Zhengzhou airport, one can fully load a 747 flight with 110 tons of goods in two hours. "The shorter loading period also gives us more leeway in collecting the shipments from our clients."

The Zhengzhou airport can undertake the landing/servicing facilities for two 747 flights and one 737 flight at a time. Work is under way to expand to four 747 flights by the end of this year.

But there have been some dark clouds in the growth of the logistics business. The European debt crisis and other financial issues around the world have led to a 7.8 percent decline in the global aviation logistics market during the first six months this year, and a 5.6 percent fall in China, according to the airport district committee.

However, transshipments from the Zhengzhou airport in the same period rose by 43 percent to 60,700 tons, the highest among all the major airports in China.

In the next five to 10 years, the Zhengzhou Airport District will transform into a major industrial cluster for sectors like electronic information, aviation logistics and high-end biomedical technologies. The logistics market in Zhengzhou alone is expected to reach 70 billion yuan by 2015, according to the administrative committee.

In July, the China (Zhengzhou) International Aviation Logistics Matchmaking Fair 2012 gathered more than 800 visitors from many leading cargo companies and airlines.

"Though we have been hosting the fair for several years, there is now an increased participation by global companies," says Zhang Yanming, director of the administrative committee of the Zhengzhou Airport District.

During the logistics fair, the Henan government also announced a host of incentives to attract more cargo companies and airlines to the city. These included special funds for opening new flight routes, reduced fees and taxes at the airport, as well as 24-hour customs services.

Contact the writers through zhaoyanrong@chinadaily.com.cn

(China Daily 08/10/2012 page16)