Emirates SkyCargo and Alibaba to cash in on e-retail

Emirates SkyCargo, the world’s second-biggest airline after FedEx in terms of freight traffic, has signed an agreement with a unit of China’s Alibaba Group to deliver packages across its network, as e-commerce drives growth for global air cargo this year.

The Emirates freight division signed a deal with the Chinese e-commerce company’s logistics arm Cainiao to deliver online shopping orders to the Middle East and neighbouring regions via Dubai, it was announced in an emailed statement yesterday.

The deal will give Cainiao access to SkyCargo’s network of 160 destinations and allow Emirates to leverage its e-commerce business.

“As a key gateway that links Asia and Europe, Dubai is well-positioned to help us achieve our goal of 72-hour global delivery,” said Xiaodong Guan, general manager of Cainiao global business.

“We have a strong commitment to Dubai and the neighbouring markets. This fits well with our broader strategy.”

The deal was announced after Alibaba revealed plans to develop six global hubs, including Dubai. The growth of e-commerce is brightening the outlook for global air freight demand this year against a dire background of escalating trade tensions and rising fuel costs, according to the International Air Transport Association.

Cargo growth will slow to 4 per cent in 2018, a drop from 9.7 per cent last year, as the restocking cycle for businesses comes to an end. People increasingly buying goods over the internet and the transport of pharmaceuticals will drive freight growth this year.

SkyCargo has been exploring opportunities to collaborate with e-commerce players to provide services beyond cargo capacity between airports, using the strategic location of Dubai as a hub, it said.

It is the world’s largest international cargo airline measured by freight tonne kilometres flown.

Further details of the tie-up will be revealed as both parties develop them, Emirates said, without specifying when they are expected.

“With Emirates SkyCargo’s network spread, frequency of flights, including close to 50 weekly flights from China, our state-of-the-art hub facilities and the strategic location of Dubai, which allows it to serve as an effective logistics hub for the region, we are confident that we will be a strong partner for Cainiao,” said Nabil Sultan, Emirates divisional senior vice president of cargo.