E-commerce player Great Vision signs $116 million deal with Cargojet

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E-commerce fulfillment platform Great Vision has signed a three-year charter agreement with Canadian carrier Cargojet.

The deal will allow Great Vision, which has operations in China and Canada, to operate flights between Hangzhou and Vancouver on 767-300F aircraft, which began last month with three weekly flights but could be scaled up.

Cargojet said revenue from the transaction was estimated at C$160 million ($116 million) over the term.

There is little public information about Great Vision HK Express’s operations in China, but its Canadian website notes that through its assets and partners (including Canada Post, FedEx, UPS and Purolator) providing services such as customs clearance and last mile it could meet the logistics needs of e-commerce players across Canada.

It says its clients include large manufacturers, freight forwarders and direct-to-consumer e-commerce platforms.

“International air freight is a key part of this logistics chain and we believe that through our strategic partnership with Cargojet, we can offer our customers extremely reliable and efficient services while continuing to promote trade between both countries,” said Christine Cheng, co-founder and chief operating officer at Great Vision HK .

Jamie Porteous, co-CEO of Cargojet, said: “Leveraging Cargojet’s industry-leading punctuality and reliability, combined with Vancouver’s connectivity to 15 other cities in Canada, will enable Great Vision HK to provide enhanced services to China e-commerce service providers for its customers across Canada.”

The challenge for sites will be filling the backhaul. Last year, to help Flexport increase its feeder utilization, it partnered with WestJet Cargo.

Neel Jones Shah, an advisor to Flexport’s board, explained earlier this year: “This was mainly to allow WestJet to make significant sales in Asia to Halifax customers, lobster producers and the like. And so we had a nice little niche, and they flew the freighter to Chicago and we were sitting on the ramp right next to each other.

However, he explained that these types of contracts end when the economy changes.

“Sometimes people release a lot of capacity into such a market, and then suddenly yields drop dramatically. Interline systems do not work when yields are too low. Sometimes the market just won’t let the economics add up, so you have to turn to something else.

E-commerce has been in the spotlight in recent weeks after changes in U.S. law resulted in large amounts of cargo being held by U.S. Customs and Border Protection. Sources say they are instead considering e-commerce imports through Canada and then trucking across the border.

However, in Canada, logistical disruptions may occur in the summer due to the threat of a strike by both border control officers and railway services.