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Lufthansa Cargo bolsters China partnerships as trade grows

Airline enhances cooperation with Shanghai airport, postal service

Shanghai Pudong International Airport is one of the largest cargo handling operators in the world. (Photo: Lufthansa Cargo)

The cargo subsidiary of Lufthansa Group is doubling down on activity in China to capitalize on the country’s growing dominance as an airfreight center for European trade thanks to a recent boom in e-commerce exports combined with its traditional role as manufacturer for the world.

Lufthansa Cargo on Wednesday announced that CEO Ashwin Bhat has reinforced partnerships with the Shanghai Airport Authority, Air China Cargo and China Postal Express & Logistics Co.

The cargo airline for 25 years has operated the Shanghai Pudong International Airport Cargo Terminal Co. (PACTL) in a joint venture with the Shanghai Airport Authority, a state-owned enterprise of the city that operates Pudong airport and JHJ Logistics Management Co. The facility provides warehousing, customs clearance, consolidation, and loading and unloading services for Lufthansa Cargo and other airlines. PACTL last year handled more than 1.6 million tons of cargo. 

Shanghai is Lufthansa Cargo’s biggest air hub after Frankfurt, Germany.


Lufthansa Cargo operates 11 Boeing 777 long-haul cargo jets and four Airbus A321 converted freighters in regional service. An additional six aircraft are chartered from AeroLogic, a joint venture with DHL, and operated by AeroLogic on behalf of Lufthansa Cargo. Lufthansa Cargo also manages the belly cargo for Lufthansa Group’s passenger airlines besides Swiss International. It has multiple cargo routes connecting cities in China and its Frankfurt hub, including ones from Zhengzhou and Shenzhen that were established this year. 

The memorandum of understanding between the Shanghai airport authority and Lufthansa Cargo calls for the parties to increase Pudong airport’s international competitiveness by further enhancing operational efficiencies, sustainability initiatives and customer service, including through the digital integration of China and German customs authorities.

Lufthansa Cargo has operated regular cargo flights for China Post Group from Shanghai to Frankfurt since 2018. China Post’s logistics arm provides domestic and international express delivery and contract logistics services. A news release didn’t provide details about how the partnership has expanded, but one possibility is Lufthansa operating more dedicated frequencies for the postal service.

Air China Cargo owns nine B777 freighters and three Boeing B747-400 freighters and handles cargo moving in the lower deck of Air China passenger aircraft. 


PACTL 25th anniversary

Last month, PACTL issued a five-year strategy aimed at strengthening its competitiveness. It operates five cargo terminals, including specialized temperature-controlled and e-commerce facilities, at Shanghai’s two major airports. Since its founding 25 years ago, it has expanded services across southern China, supporting more than 70 airlines and 300 forwardings. PACTL’s trucking network spans the country.

PACTL’s focus areas include strengthening safety management and improving efficiency. The terminal said it will expand the number of supervisors on the ramp to better coordinate pallet traffic, integrate decision-making tools in its cargo management platform and expand its network of remote terminals to better serve the Yangtze River Delta region.

The ground handling company is also testing unmanned warehouse storage using AI-driven applications, accelerating upgrades at PACTL West and participating in the development of new facilities at Shanghai’s two airports.

Lufthansa Cargo saw cargo revenues increase 16% to $789 million during the third quarter.  It has shifted capacity from the trans-Atlantic to the Asia-Pacific region to capitalize on strong trade flows from there to Europe and North America, especially for e-commerce shipments. And late last month it launched trans-Pacific service from Vietnam to the United States. 

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com