Logistics firm Great Vision HK Express has contracted Cargojet to provide a scheduled charter service between China and Canada to carry e-commerce volumes.
The three-year agreement will see Cargojet operate Boeing 767-300 freighters between Hangzhou and Vancouver a minimum of three times per week.
The service started on May 22 and eight flights have been completed to date.
The Canada-based freighter operator expects to generate more than C$160m in revenues from the deal over the three years.
Cargojet is primarily known for flying in the Americas and across the Atlantic and the deal will help further expand its 767 network.
54-tonne capacity 767-300Fs have a range of just over 6,000 km when fully loaded which means a stop is likely to be included to cover the more than 9,000 km distance between the two airports.
The use of 767 aircraft - rather than a 777 or 747 - across the Pacific also highlights the capacity crunch currently being experienced on the trade due to the number of all-cargo aircraft being utilised by e-commerce players.
The lack of capacity is also reflected in airfreight rates, with Baltic Airfreight Index figures showing that in May rates from Hong Kong to North America increased 9.1% year on year to $5.53 per kg.
Cargojet said that it would also provide Great Vision HK with connectivity to other Canadian cities in its domestic network.
“Leveraging Cargojet’s industry-leading record of on-time performance and reliability, together with the connection opportunities from Vancouver to fifteen other cities in Canada, will allow Great Vision HK to provide enhanced services for China-based e-commerce service providers, to their customers across Canada," said Jamie Porteous, co-chief executive of Cargojet.
“We continue to explore opportunities to maximize asset and aircraft utilisation and look forward to a strong partnership with Great Vision HK,” added Pauline Dhillon, co-chief executive .
Great Vision HK provides China-to-Canada-to-China end-to-end integrated logistics supply chain solutions, including pick-up, pre-sorting, international airfreight, customs clearance, distribution, last-mile delivery and after-sales services.
Christine Cheng, co-founder and chief operating officer at Great Vision HK, said: “International air freight is a key part of this logistical chain, and we believe through this strategic partnership with Cargojet that we can offer extremely reliable and efficient services to our customers, while continuing to promote trade between the two countries."
In the first quarter of the year, Cargojet saw its profits improve as the business benefitted from rising domestic e-commerce demand.
The company saw first-quarter revenues slip 0.3% year on year to C$231.2m, while earnings before income taxes (ebit) improved by 8.7% to C$37.6m and net earnings were up 6.6% to C$32.5m.
The decline in revenues was largely the result of lower fuel surcharges and ‘other revenues’, which were down 15.7% to C$55.5m.
Looking at revenues generated by the company’s domestic, ACMI and charter business, there was an increase of 6.5% to C$181m.
Revenues on the domestic network increased by 7.1% year on year fuelled by e-commerce.
Cargojet operates a fleet of 24 767s and 16 757s
