Car­ri­ers re­act to e-com­merce boom

China Daily (Canada) - - ACROSS AMERICAS - By PAUL WELITZKIN in New York paulwelitzkin@chi­nadai­lyusa. com

As e- com­merce traf­fic be­tween China and the US heats up, some freight car­ri­ers are ex­pand­ing fa­cil­i­ties to han­dle the grow­ing busi­ness from con­sumers who or­der prod­ucts through the in­ter­net in both coun­tries.

Last month, Ger­many’s Deutsche Post AG’s DHL ship­ping unit un­veiled a $137 mil­lion ex­pan­sion in Chicago, par­tially to sup­port the in­creas­ing DHL foot­print in China.

DHL e- com­merce CEO Charles Brewer also an­nounced plans to ex­pand DHL in China, in­clud­ing the opening of dis­tri­bu­tion cen­ters in Shanghai, Shen­zhen and Hong Kong. The fa­cil­ity in Shen­zhen will be able to han­dle 18 mil­lion pack­ages daily.

“From a macro per­spec­tive, China ac­counts for 40 per­cent of global e-com­merce sales,” Brewer told Xin­hua.

DHL’s ex­pan­sion in Chicago in­cludes a new fa­cil­ity north of Mid­way Air­port on Chicago’s South Side that can process more than 2,500 ship­ments an hour, com­ple­ment­ing an ex­ist­ing fa­cil­ity near O’Hare In­ter­na­tional Air­port, and a he­li­copter de­liv­ery ser­vice launched in 2015 to de­liver doc­u­ments to fi­nan­cial and le­gal firms.

Natalie God­win-Nor­ring­ton, a spokes­woman for DHL ri­val United Par­cel Ser­vice Inc (UPS) wrote in an email that UPS’s in­ter­na­tional ex­port vol­ume grew 4 per­cent ver­sus the same pe­riod in the prior year, and that in­creased ship­ments from China to the US are part of that growth.

God­win-Nor­ring­ton said while UPS’ fo­cus when it first went to China was on de­vel­op­ing ca­pa­bil­i­ties along the coastal top-tier cities, the com­pany con­tin­ues to see op­por­tu­ni­ties in other parts of China.

“Ac­cord­ing to McKin­sey & Com­pany, there are 160 mil­lion peo­ple in China’s lower-tier cities who use on­line ser­vices, but have yet to be­gin shop­ping on­line. This presents tremen­dous po­ten­tial for e-com­merce growth. Last year, UPS ex­panded to 21 ad­di­tional tier-2 and -3 cities in China,” she said.

The cross-border e-com­merce mar­ket is ex­pected to in­crease in value from $40 bil­lion in 2014 to more than $240 bil­lion in 2020, ac­cord­ing to Joel Backaler, a man­ag­ing di­rec­tor at Fron­tier Strat­egy Group.

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