CAL will tranship cargo from China

China Airlines Co (中華航空), Taiwan's largest carrier, said it will transship cargo arriving by sea from mainland China to the US and Europe, hoping it will help increase sales as demand at home slows.

The airline will collect Chinese goods carried by Yang Ming Marine Transportation Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運) to Taiwan's offshore transshipping center at the southern port of Kaohsiung for onward air transport to third nations.

Taiwan bans direct transportation links between the main island and China, although it allows marine shippers to transship mainland cargo through its offshore transshipping center without passing through customs. Taiwan's cabinet earlier this year said it will allow airlines to help transship mainland goods as Taiwan's air cargo shipments faltered as exports slowed.

"Taiwanese airlines are eager to tap the flourishing mainland China exports as domestic cargo demand slumps," said China Airlines spokesman Paul Wang.

Overseas orders for Taiwan-made products fell by a fifth in June from a year earlier, after dropping 14 percent in May, Taiwan's Ministry of Economic Affairs said.

China Airlines expects profit margins on transshipped cargo to be low because of the system's inconvenience and anticipated delays.

"We will offer lower prices than direct cargo flights between China and the western countries to compensate for the extra time required to transship cargo through Taiwan," Wang said.

The government said that if China enters the WTO near the end of this year, direct tranportation links may be opened. Local businesses are pressing for such a move.

China Airlines shares rose 5.4 percent to close yesterday at NT$13.7.