BUD cargo: Budapest to become a Chinese cargo hub

Budapest could become a hub for air cargo, primarily e-commerce goods, arriving from China, following the signing of an agreement on the first phase of international cooperation to this effect. According to the cooperation agreement signed by Budapest Airport and two large logistics companies, STO Express from China and EKOL, the European 3PL company with a strong presence in Hungary, the cargo traffic of the airport will expand significantly. The contract is related to the annual conference of the “16+1 cooperation” initiative, comprising China and 16 countries from the Central and Eastern European (CEE) region, which got under way in Budapest today.

At the economic, commercial and financial forum organized today as part of the conference, STO Express, one of the leading Chinese logistics companies, announced that, in line with the efforts of the Chinese government, it is developing its relations with the CEE region. As part of this, it has designated Budapest Airport as the hub for air cargo transportation, whereby, together with the airport operator and intermodal company EKOL, based in Hungary, it will establish a cargo transportation network in the near future, to transport products from China, through Budapest Airport, to customers in Europe; the latter with the help of EKOL Ltd.

STO Express’s first Boeing B747 cargo aircraft, filled primarily with e-commerce goods, arrived in the Hungarian capital on 3 November, in the colors of Silkway Italia, initially as a charter flight. After the signing of the cooperation agreement, STO Express will operate scheduled cargo flights to Budapest, which is likely to generate a significant increase not only in total cargo traffic, but also in the field of e-commerce, the main profile of the Chinese company.

Cargo traffic at Budapest Airport has increased by 36% since December 2015, which is an outstanding result, even in international comparison. From January to October 2017, the airport operator handled no less than 103,700 tons of air cargo, which constitutes considerable growth of 14.5%, compared to the same period last year. It is an especially outstanding achievement that export and import contributed to this year’s figures in almost equal measure, with the former making up 52% and the latter 48% of total air cargo traffic.

It is noteworthy that, based on market data, e-commerce, i.e. products ordered online, accounted for 4-5% of retail sales in Hungary this year, with 20% growth in this segment during the period from January to June, compared to the same period last year. In terms of specific figures, this means online transactions of approximately 600 million USD during the first half of 2017. E-commerce is thus clearly one of the areas with the greatest potential in the market, including air cargo.

The cooperation agreement was signed on behalf of Budapest Airport by René Droese, director property and cargo, who commented: “On behalf of Budapest Airport, we warmly welcome this initiative by STO Express. Export-import between China and Hungary and the entire CEE region plays an important role in our rapidly developing market. We believe that Budapest and Budapest Airport provide the best place for distribution by STO Express in CEE, and we will do our best to prove this in the near future. Our new air cargo base, the Cargo City, will commence operation in the summer of 2019.”