China Eastern Airlines co-founds new logistics giant
China Eastern Airlines (MU, Shanghai Hongqiao) has taken part in formally establishing a new state-owned logistics giant to bolster domestic and global supply chains following recent worldwide disruptions, state-run media outlets reported on December 6.
China Logistics Group has three strategic investors, namely the airline’s parent China Eastern Air Holding along with the parent firms of Shanghai-based multinational conglomerate COSCO Shipping and Hong Kong-based port service provider China Merchants Group, which will respectively hold stakes in the new entity of 10%, 7.3%, and 4.9%.
China’s State-Owned Assets Supervision and Administration Commission (SASAC), a special commission directly under the State Council, and China Chengtong Holdings Group, which SASAC in any case centrally manages, will evenly split the remaining shares.
The move comes as China Eastern has also been funnelling resources into its own logistics bases in recent months, such as developing a passenger and cargo hub in Huanggang, the closest airport to which is Wuhan, a key base for the carrier, and building cargo and logistics infrastructure and connectivity in Sanya in the southern province of Hainan.
During the course of China’s 14th Five-Year Plan period (2021-25), China Logistics Group will become a “global supply chain organiser” by developing international trade links and freight services as well as cross-border e-commerce, state media proclaimed.
The new entity was created through the merger of several longstanding logistics specialists – China Railway Materials, China National Materials Storage and Transportation Group, Huamao International Freight Limited Company Shenzhen Branch, China Logistics, and China National Packaging Corporation. China Logistics Group already covers all of the country’s provinces, has a presence in five continents, and operates three million road freight vehicles as well as international trains running across Asia and Europe, China Central Television reported.