Air Exportation from CHINA

Presented by Joseph So COHESION Air Freight (HK) Ltd.

China U.S. air freight has taken off, but from a smaller base

China – U.S. Air Freight

Ranking of Freight Vol. in China Airports

Airport Rank(In tons)

% Change2005 2004

Shanghai – Pudong 1 1857119.8 1642176.0 13.1

Beijing 2 782066.0 668690.0 17.0

Guangzhou 3 600603.9 506988.3 18.5

Source: CAAC

Freight Vol. in Hong Kong Airports

2005 – 3437050

2004 - 311900810.1%

China and Hong Kong account for 29% of the air freight in U.S. Asia market

China – U.S. Air Freight

2005

Hong Kong5%

China24%

Rest of Asia71%

Source: BACK Aviation,

China – U.S. Air Freight Air freight trade includes products and equipment

related to high-tech and high-fashion

INTERMEDIATE GOODS13%

APPAREL6%

WOMENS APPAREL8%

MENS APPAREL2%

HOME FURNISHINGS2%CONSUMER

PRODUCTS2%

FASHIONACCESSORIES

6%CAPITAL EQUIPMENT8%

TELECOM20%

ELECTRONICS12%

ALLOTHER21%

Source: BACK Aviation, FY 2005 air freight commodity analysis

Footwear Manufacturing in China

Over 80% of the footwear going into U.S.A. is from China

Below areas are the key regions for footwear (Non-rubber/Rubber/Fabric) manufacturing:

Dongguan, Guangdong

Putian, Fujian

Wenzhou, Zhejiang

The top airlines serving China-US include:

Shanghai

Air freight service between the US & China is consolidated in a few key airports

Beijing

Guangzhou

Hong Kong

Air freight service between the US & China is consolidated in a few key airports

Beijing: Mainly handle shipments from Yellow Sea Bo Hai

Including

Tianjin,

Liaoning, Hebei, Shandong, Shanxi, Inner Mongolia

Shanghai: Mainly handle shipments from

Air freight service between the US & China is consolidated in a few key airports

Yangtze River DeltaIncluding Wenzhou, Nanjing

Hangzhou,

Ningbo,

Guangzhou: Mainly handle shipments from

Air freight service between the US & China is consolidated in a few key airports

Pan-Pearl River Delta

Jiangxi,

Dongguan,Panyu,

Shunde, Zhongshan,

Shenzhen,Hong Kong,

Including: Guangzhou,

Foshan, Fujian, Zhaoqing,

Zhuhai

Hong Kong: Mainly handle shipments from

Air freight service between the US & China is consolidated in a few key airports

Including

Guangzhou,

Guangdong province

Dongguan

Zhuhai, Zhongshan,

Shenzhen,

Air Freight Business Outlook

China will further open up its air cargo market

Air cargo volume will maintain an average growth rate of over 10% (the growth rate of the world is 6.2%)

New carriers are coming into China Market

Air Freight Business Outlook More freighters will come into China market.

* UPS announced they have placed order for an A380 freighter expect delivery on 09

* UPS will add eight Boeing 747-400 freighters to its fleet starting June 07

* FedEx announced a new Asia Pacific hub will be built at the Guangzhou Baiyun International Airport this summer.

Since majority of the manufacturers are located in China, the shipments will be shipped directly

Air Freight Business Outlook The role of the airport in China will become more sign

ificant

E.g. the Baiyun International Airport in Guangzhou,

the Gaoqi International Airport in Xiamen

Goods manufactured in Southern China trend to ship via Guangzhou instead of Hong Kong

The future role of the Hong Kong International Airport will become less important

Export Procedures Cargo Cut off:

- Cargo must be delivered before 10:00a.m. (for same day evening flight)

- Cargo must be delivered one day prior carrier departure

Document Cut off:

- On or before cargo arrival at the airport

Custom clearance:- In normal practice it takes one day- Additional half to one day will be needed if there is any

random customs inspection

Export Procedures Provide full set of export customs clearance

document- Packing list- Commercial invoice- Export application form- Authority letter for export clearance- Application form of tax refund after exportation- Sales contract- Fumigation certificate for solid wood package- Certificate of commodity inspection

(If it is required in the rules of China customs)

Common air transportation problems in China

Lack of delivery reliability

Non-procedural practices

Excessive customs clearance times

Lack of intermodal service

Lack of shipment tracing service

THE END

THANKS!