Market Overview

Alibaba Taps Atlas Air For Parcel Airlift To South America

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Alibaba Taps Atlas Air For Parcel Airlift To South America

Chinese e-commerce giant Alibaba Group Holding, Inc. (NYSE: BABA) is expanding its ability to serve the South American market with the November launch of an air charter network designed to speed up shipping times. For-hire cargo airline Atlas Air (NASDAQ: AAWW) said Monday night it will operate three weekly freighter flights to Brazil and Chile for Cainiao, Alibaba Group Holding Ltd.'s logistics arm.

Customers in Brazil and Chile can expect to receive parcels from China in as soon as three days compared to one week now. Cainiao said it transported more than 8 million packages to South America in the third quarter — double the volume in the second quarter — underscoring a global trend of the coronavirus pandemic accelerating interest in online shopping.

Atlas Air will use Boeing 747 and 777 aircraft to support Cainiao, spokeswoman Debbie Coffey said.

"At Cainiao, we continue to invest in our network to support Alibaba merchants operating over 100,000 online shops," said William Xiong, chief strategist and general manager of export logistics. "Our partnership with Atlas Air will help us establish an efficient, reliable network to South America and other worldwide destinations by significantly reducing airfreight delivery time for the merchants we support."

Cainiao has said it plans to build out its international supply chain and launch direct routes to major markets around the world. It expects to operate about 1,300 chartered flights by the end of 2020.

Alibaba owns about two-thirds of Cainiao after funneling $3.3 billion into the operation in November. 

Alibaba's online shopping mall and logistics platform rivals that of Amazon, which controls its own private airline with the help of contract carriers, has a dedicated trucking network and acts as the ocean transport consolidator. Its digital platforms resulted in about 51 billion parcel deliveries last year.

The e-commerce powerhouse operates in more than 190 countries and has plans to serve 2 billion customers by 2036.

Click here for more American Shipper/FreightWaves stories by Eric Kulisch.

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