With the reduction of local subsidies, the air cargo charter market will undergo certain changes.

Currently, many companies are formulating their charter plans for next year, mainly based on the level of local subsidies to determine route selection. Take a Boeing 747 or 777 long-haul wide-body freighter as an example—some local governments offer subsidies of up to millions of RMB per flight, significantly reducing the charter price. The transportation cost per kilogram could be nearly 10 RMB cheaper than the market rate, providing air cargo companies with a strong competitive advantage.

In addition to first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen, cities such as Chengdu, Chongqing, Zhengzhou, Ezhou, Hangzhou, Nanjing, and Changsha are actively developing regional or global air cargo hubs. The key to building these hubs lies in attracting cargo, especially from the Yangtze River Delta and the Pearl River Delta, the two major export source regions. To attract cargo from these areas, local airports typically rely on substantial subsidies to entice airlines and charter operators to open routes.

As more cities gradually reduce the proportion or amount of charter subsidies, charters are increasingly gravitating toward new areas with higher subsidies. Aside from the hinterlands of the Yangtze River Delta and Pearl River Delta, other regions' airports rely more on policies and subsidies than market factors to gather cargo.

If local subsidies continue to decrease, air freight rates in mainland China may approach the levels seen in the Hong Kong market, with overall rates potentially rising further. This will lead to higher logistics costs for exporters, signaling that the air cargo market will increasingly return to market-based pricing mechanisms.

END

WeChat Official Account: Cross-border E-commerce Logistics Baixiaosheng