China’s vast scale is often not appreciated, as popular perceptions of China focus on its eastern coast and Beijing. As manufacturing moves inland, provinces in central China, like Shaanxi and Ningxia, are growing in importance, as is awareness of them.
When Chinese e-commerce mostly involved two-hour freighter flights up and down the east coast, the airfreight industry was able to keep pace with the aircraft it had. But now that factories are springing up in the interior, the limits of the country’s airfreight and surface-based infrastructure are being exposed.
The terrain in much of the country can also be forbidding, with temperatures in the north that can plummet to -40°C, affecting the transportation of perishable goods. In the west, the Himalayas and the Gobi Desert create more logistical headaches that can add to lead times for shipments and increase delivery costs, said Kerry’s Emma Rowlands.
While many of the newer distribution centers are properly equipped logistics parks, the distances between warehouses can be vast. The country has made progress building roads, rail lines, super-highways and airports, but they are all still costly to use, she added.
“Considering China’s sheer size, the absence of an airfreight gateway infrastructure stands out,” says Agility’s Poulson. “Shanghai has developed as a matured hub during the past decade, while other airports are still highly dependent on a few customers, often even a single manufacturer.”
Over the years, this has offered a number of “rather adventurous” opportunities in the market place, Poulsen said. “As an industry we have made our fair share of bad experiences dealing with startup airline and services,” he said. “Talking from experience, if it sounds too good to be true, it usually is.”