China Airlines, Yang Ming, Chungwa Post ally to meet e-commerce demand

China Airlines, Yang Ming, Chungwa Post ally to meet e-commerce demand

China Airlines, Yang Ming Line and Chungwa Post, Taiwan’s national postal service will cooperate on sea and air freight services to better compete in the booming e-commerce market in Asia.

The trio have signed a memorandum of understanding to establish a strategic alliance in which they will work together to transport parcels, along with storing them, responding to customer complaints and marketing their services. The agreement also allows the companies to expand their cooperation beyond the previously mentioned business areas if they wish.

“In the face of global competition and changes in the industry’s structure, "alone" has been unable to meet customer demand for a full range of logistics services,” Chungwa Post Chairman Weng Wenqi said in a statement.

E-commerce, which has surpassed traditional shopping models, has fundamentally altered the way transportation companies operate. It has diminished the typical peak season by forcing retailers to have deep stocks on hand throughout the year and spurred demand for smaller distribution centers closer to metro areas.

The China holiday of Singles’ Day best exemplifies the magnitude of this shift with Alibaba’s logistics affiliate Cainiao receiving 467 million delivery orders on the day this year. That’s more than 15 times the daily average and a 68 percent increase from last year.

Contact Dustin Braden at dustin.braden@ihs.com and follow him on Twitter: @dustin_joc.