Turkish Airlines, ZTO Express and PAL Air join hands to facilitate global e-commerce market

June 12, 2018: Turkish Airlines’ Turkish Cargo recently signed a joint venture with Chinese cargo giant ZTO and Hong Kong based PAL Air in Istanbul.

The partnership is being regarded not only as a huge strategic step for Turkey prior to the opening of the Istanbul New Airport but a game changer for the global express transport business. The agreement was sealed and signed by Turkish Airlines chairman of the board and the executive committee M Ilker Ayci, ZTO Express chairman Mei Song LAI and PAL Air vice-chairman Vivian Lau.

“As Turkish Airlines, ZTO Express and PAL Air Ltd., we are announcing the signing of MoU to build a joint venture company to operate as a global express/ courier company mainly focusing on global e-commerce market with full door to door services. We are now delighted to make this strategic move into global express business together with the strong partnership of ZTO, the best and largest express company from China and our long term cross border forwarding partner PAL Air from Hong Kong. The joint venture, after reaching quickly to fully functional and operational levels, is expected to take place within the world’s largest integrators. In 5 years’ time it will generate over $2 billion of revenue. The growth is expected to continue gradually parallel to the e-commerce demand.

The Istanbul New Airport will be opened by 29th of October this year and it will function as Turkish Airlines main operating hub. This mega hub, will gradually provide Turkish Cargo up to 4 million tons of cargo handling capacity, becoming one of the top 5 air cargo brands of the world. The flow of e-commerce products globally with this Joint Venture and via Istanbul Mega Hub; will provide maximum value to our customers worldwide.” said Ilker Ayci.

The services of the new global express joint venture company which will be based in Hong Kong, will include all door to door logistics activities; trucking, collection and distribution, freight transportation, cross docking and final mile delivery. It will also include warehouse management, order and supply chain management when necessary.

ZTO is the world’s largest parcel distributer, by daily 28 million parcels and additionally having the widest express delivery coverage in whole China. Recently global giant Alibaba Group announced that they were to buy 10 percent of the ZTO Express through an investment of $ 1.38 billion, deal expected to close within June.

PAL Air on the other hand, has launched a B to C Wholesales Postal Express Service including last mile fulfillment to the Retail Express Services Providers in Hong Kong, China, Thailand, Vietnam, India and the USA.

Speaking at the ceremony, ZTO Express Chairman Mei Song LAI commented; “In 2017, ZTO's annual parcel volume reached 6.22 billion parcels. As the largest express delivery company in the world, ZTO is an open platform built on core values of "Co-create and Share". Because of the innovation and globalisation of new retail and e-commerce, China's logistics industry is provided with tremendous new growth opportunities. ZTO will continue to solidify and strengthen its competitive advantage for domestic growth, and will actively explore and expand international markets, building cross-border business as an important growth engine for the future.

The cooperation between the three partners will form synergy by combining strong core competencies and integrating key resources, and will undoubtfully effect positive progress in the areas of global express delivery, warehousing, cargo freight, and aviation route development and more, and will ultimately benefit traders and consumers globally.”

Meanwhile, Pal Air vice-chairman Vivian Lau said, “We are in one of the most exciting times of the human history. The IoT, robotics, artificial intelligence, 3D printing, VR/AR/MR will unleash unprecedented opportunities and challenges. To add to this list, the world is awaiting the launch of 5G which promises 10 gigabits per second, a hundred times faster than the current 4G technology. All these will provide further fuel to the already explosive e-commerce development. PAL is honored to have played a role in creating a three parties venture that will unleash the best of three worlds, together with two global giants, Turkish Airlines and ZTO. Turkish Airlines, ZTO, and PAL looks forward to the creation of a world class integrator.”