China's online retailer JD.com extends global cold chain network
JD Logistics will work with Air China Cargo to connect with fresh food producers globally and further develop China’s fresh food market. Fresh produce — including fresh fruit and vegetables, meat, and seafood — will be flown from its country of origin via Air China Cargo’s network of regional cold chain transit hubs to JD’s distribution centers in China.
A key to the partnership, and crucial in any cold chain initiative, is the last-mile capability. This is an area JD Logistics has developed to such an extent that it now operates China’s largest nationwide cold chain logistics network completely in-house.
Zhenhui Wang, CEO of JD Logistics, said one of the company’s goals for 2018 was to partner with more global leaders in logistics to extend the strength and reach of its logistics network. “By bringing together Air China Cargo’s global reach and international cold chain air freight capabilities, and JD’s industry leading last-mile cold chain logistics network in China, we significantly shorten the time needed to transport fresh produce from anywhere in the world to the doorsteps of consumers in China,” he said in a statement. “This opens up exciting new opportunities for fresh food producers in markets around the world to tap into growing Chinese consumer demand for high quality fresh produce.”
China has a mounting appetite for fresh food, much of it imported, and the e-commerce channels are leading the way in developing an efficient cold chain that is battling to keep up with the massive demand. Revenue from cold chain logistics in 2016 reached $3.5 trillion.
The deal with Air China Cargo aims to guarantee the quality of produce transported via the network to ensure the products are in premium condition when they reach consumers in China, with traceability at every stage so consumers can know exactly where their food comes from. Chinese consumers have suffered through several food quality scandals over the last few years, and foreign produce enjoys a better reputation than food that is locally produced.
The airline partnership comes just two months after JD.com signed agreements to purchase meat worth more than 1.2 billion USD from the United States over the next three years in a deal expected to increase Montana’s beef export sales by as much as 40 percent in 2018.
Beef is the fastest growing meat sector in China and the country is the world’s fastest growing overseas market for beef following the resumption of US imports earlier this year. In June 2017, US beef was added to the list of products eligible for export to China, ending a long-standing ban on US beef imports by Beijing following a 2003 case of mad cow disease in the United States.