Cainiao Smart Logistics Network, Atlas Air, and LATAM Airlines are launching a flight operation program linking Hong Kong to Bogota, Colombia and Lima, Peru.
The program, based on a Special Prorate Agreement (SPA), sees Santiago, Chile or Sao Paulo, Brazil as the connection point. The shortage of capacity due to the pandemic grounding of passenger aircraft was behind the move, Cainaio says.
As Cainiao’s first SPA in support of transportation across Latin America, the logistics arm of the Alibaba Group says the agreement “carries strategic significance of achieving economies of scale for win-win situation for the three parties involved.”
This collaboration ensures that the time taken for customs clearance, repackaging, container change and temporary warehousing in Santiago or Sao Paulo can be reduced, Cainiao says. This is achieved as parcels delivered by Atlas Air will be seamlessly transferred to LATAM flights heading to Bogota and Lima, packed in the same container.
The overall shipping time to Colombia and Peru will be reduced by nearly 50 per cent, and parcels can arrive as fast as 10 days from China.
Merchants and customers can track the order with the same shipping label back from Hong Kong. The most popular products for Latin consumers from China are electronic devices, toys and beauty products.
The daily parcel volume to South America transported via Cainiao in March grew 14 per cent compared to that in February as global trade resumes, driving up the demand for air freight, which is almost returning to pre-pandemic levels.
According to International Air Transport Association, demand in January rose 3.0 per cent from December and was 1.1 per cent higher than in 1 January 2019. But as Cainiao notes, available cargo capacity is limited resulting in elevated prices.
“The pandemic has resulted in a shortage of cargo flights from China to South America, and our collaboration with Atlas Air and LATAM can help meet the robust demand and raise logistics efficiency,” says William Xiong, Cainiao’s chief strategist and general manager of Export Logistics.
“This year, Cainiao plans to launch over 3,000 chartered flights to safeguard cross-border logistics and help Chinese merchants sell globally.”
Michael Steen, executive VP and chief commercial officer for Atlas Air Worldwide adds: “We are pleased to be the chosen partner for Cainiao’s intercontinental operations connecting China to North and South America.
“Our scale and global footprint make us an ideal partner for Cainiao as they continue their efforts to reduce delivery times to their customers around the world,” Steen adds.
“LATAM’s participation is a recognition of the robust network, which has positioned LATAM Airlines Group and its Cargo carriers as the best alternative to, from, and between South America, and of the flexibility offered to adapt to the needs of our customers, comments Jorge Galvez, director of Marketing and Development of LATAM Cargo.
“The collaborative and efficient work between LATAM and Cainiao, in addition to the interline agreement reached with Atlas Air, will allow the implementation of a logistics chain that will satisfy the high demand of e-commerce and reduce delivery times from Hong Kong to Bogotá and Lima by 50 per cent, a result that is of direct benefit to the end customer.”
In November Cainiao reached an agreement with Atlas Air started operating three weekly charter flights dedicated to Cainiao, linking China with Brazil and Chile. In March 2021, Cainiao partnered with Saudia Cargo to operate five weekly flights from Hong Kong to Liege in Belgium, with Riyadh city as a connection point.