JD.com’s logistics unit is bringing on more air cargo capacity as e-commerce demand out of China keeps escalating.
JD Airlines, the cargo airline of JD Logistics, is adding four 737-800 Boeing converted freighter (BCF) aircraft to its arsenal in 2024, bringing the company’s total fleet to 10 planes. These freighters can carry up to 23 metric tons of cargo per flight.
Aviation leasing company AerCap is delivering the used 737-800s to JD.com. The aircraft will be based in Nantong Xingdong International Airport and will operate routes between the major economic hubs of Nantong, Beijing, Shenzhen, Wuxi and across Asia.
AerCap Cargo modifies passenger planes so that they can transport cargo within the main deck, with the company saying it has made more than 100 successful passenger-to-freighter (P2F) conversions. Prior to the new deal, the firm had three 737-800BCF aircraft on lease to JD Airlines.
Rich Greener, the head of AerCap Cargo, said in a statement the addition to the fleet will enable JD Airlines to “respond to the ever-growing demand for e-commerce and express deliveries.”
JD.com’s air cargo expansion comes as major e-commerce players with large Chinese operations like Shein and Temu are flying more goods to the U.S. as both platforms see accelerated customer growth.
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According to WorldACD data based on more than 450,000 weekly transactions, overall tonnage flown out of the Asia Pacific region shot up 20 percent from the prior year totals for the week of June 3 to June 9, with rates increasing 16 percent and capacity increasing 10 percent. But tonnage for flights originating in China further eclipse the wider Asia Pacific region with a 32 percent jump.
JD.com’s retail business doesn’t sell directly to U.S. end customers, unlike companies like Shein and Temu, with the company having shuttered its Joybuy e-commerce marketplace in 2022. The company’s retail segment saw sales increase 6.8 percent in the first quarter of 2024 to 226.8 billion yuan ($31.4 billion) on operating income of 9.3 billion yuan ($1.3 billion).
JD.com’s air cargo operation has a few differences with that of chief competitor Alibaba, as well as other e-commerce titans like Amazon or Argentina-based Mercado Libre. While those companies outsource flights to other airline companies, JD Airlines uses its own pilots, essentially operating as its own independent airline, albeit with leased planes.
Although JD Logistics started developing an air cargo business in 2017 by working with partner airlines, the JD Airlines unit began officially operating in October 2022. The segment flew its first international route from Shenzhen, China to Ho Chi Minh City, Vietnam in September 2023, which operates three times per week. This route primarily carries e-commerce parcels from China to Vietnam, while also facilitating shipment of fruit and seafood from Vietnam to China.
JD.com also still uses third-party airlines to transport e-commerce orders, mainly on international routes. The airline segment also carries shipments for other businesses in addition to moving packages for JD.com.
Ahead of the official creation of JD Airlines, the Chinese e-commerce giant unveiled its high ambitions for the future of its air cargo business in late 2021. Then-JD Logistics CEO Yui Yu told Bloomberg in October that year that the company sought to operate a fleet of 100 freight aircraft by 2030. This fleet would consist of both purchased and leased aircraft, he said at the time.
The carrier says it has plans to extend its reach to cities including Chengdu and Chongqing, and aims to gradually cover nationwide major cities and Southeast Asia, Japan and Korea and later in Europe, Middle East and North America by the end of 2025.
Currently, JD Logistics has a network of over 1,000 air transportation routes, delivering a coverage rate of more than 95 percent for its express air delivery services across multiple cities in China. Across the board, JD Logistics has sought more expansion, earlier this year extending its delivery service’s reach from initial hubs in Guangzhou and Shenzhen to nearly every district within China.
First launched in December 2023, JD’s international express delivery service processes both individual orders and those for merchants alike.
And the company also touts growing warehousing operations. JD.com offers same-day fulfillment services in European markets including Germany, the Netherlands, France, the U.K., Spain and Poland, while saying it rapid two-to-three-day delivery across 90 percent of regions in the U.S.