China Airlines Ltd (CAL, 中華航空) yesterday signed a memorandum of understanding with Yang Ming Marine Transport Corp (陽明海運), seeking to improve passenger and cargo transport services as well as electronic commerce through integration of resources, such as bonded warehouses and freight capacity.
“We hope that the strategic alliance would improve the competitiveness of the two companies amid challenges of falling demand for international freight, exacerbated by a glut of capacity in the sector,” CAL chairman Sun Hung-hsiang (孫洪祥) said at the signing ceremony.
CAL, the nation’s leading carrier, and Yang Ming, the nation’s second-largest container shipper in terms of fleet size, have more than 210 and 118 overseas operation bases respectively.
Photo: Wang Yi-hung, THE Taipei Times
The two companies said that the integration of resources would yield cost savings and more flexible offerings for clients than separate efforts would.
“Based on preliminary resources of our global physical presence, we have identified the best collaborative opportunities lie in major international hubs that have both air and sea links, such as Singapore, San Francisco, Los Angeles, Amsterdam and Frankfurt,” Yang Ming chairman Frank Lu (盧峰海) said.
In addition to maximizing sales, the two companies are to refer clients to each other and jointly offer a one-stop solution for comprehensive transportation services by sea and air, he said.
With the alliance, Yang Ming can redirect time-sensitive shipments to CAL during labor strikes or congestion at major ports, managers of the two companies said.
A collaborative business model between the two companies has already been established in Manila, while Frankfurt, Dubai and Myanmar appear to be suitable hubs to deploy the new joint operations, the companies said.
Regarding electronic commerce collaboration, CAL is to provide air freight support for Yes Logistics Corp (好好國際物流), a subsidiary of Yang Ming, the companies said.
Yes Logistics has begun internal testing of its My Captain online shopping platform, which is to feature duty-free and travel-related products by CAL.
In terms of passenger flights, CAL said that air fare expenses for Yang Ming employees totaled NT$10 million (US$303,260) last year and that it hopes to see the figure double next year, reaching NT$50 million in 2017.
In the first three quarters, CAL reported a net income of NT$5.1 billion or earnings of NT$0.94 per share, while Yang Ming incurred losses of NT$3.94 billion, or NT$1.15 loss per share, over the same period.
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