Construction of a third runway at Hong Kong International Airport (HKIA) will expand the hub’s cargo capacity to nine million tonnes by 2030.
Work began this summer and it is set to be ready by 2024. Hong Kong Air Cargo Terminals Limited (Hactl) chief executive, Mark Whitehead (pictured) says it is good news as it will enable HKIA to go to the market with a much stronger and more positive message.
He says in the interim, mitigating measures are helping Hong Kong to cope with growing demand: “Operationally, the airport expansion may lead to the return of some freighter parking which we have had to give up; although we counteracted the effects of this through streamlined operations and processes, it could further reduce our turn-round times and enhance our customer service.”
The Asian region has picked up and Whitehead says business is “robust” and in-line with expectations with tonnages holding up well, given the softening of Chinese exports and moderate growth in air cargo.
He notes: “The size of our customer portfolio, and the geographic spread of our carriers, provides some insulation. At the same time, our constant drive to improve service levels has helped us and our customer carriers to retain and develop business.”
Hong Kong’s role as a regional hub for the whole of Asia continues to grow, offsetting slowing in export traffic from China, Whitehead says and he adds Hactl has been predicting intra-Asian growth for some time, it is “certainly showing” in transhipment figures.
He says countries such as Vietnam, Philippines and Indonesia are all emerging industrial economies, and this is creating new traffic that includes part-finished goods moving between manufacturing sites and Hong Kong is benefiting from this growth.
Perishables and pharma are the fastest growing sectors for Hactl, while it is targeting e-commerce through its logistics arm Hacis.
Hactl is also taking steps to speed the flow of inbound e-commerce traffic distributed via its growing RFS network (Superlink China Direct).
The new Hong Kong-Zhuhai-Macau Bridge will make RFS transit times attractive over a wider area, and open up new opportunities across the western Pearl River Delta region.
As for trade lanes, Trans-Pacific is growing, and the traditional imbalance is disappearing, which is good news for carriers who are gaining better utilisation. Whitehead adds there is also significant growth in traffic into Hong Kong among the Gulf carriers.
And Whitehead says Hactl will soon announce a new project, as it is working on several at the moment, only revealing future projects could take a number of forms – joint ventures, consultancy, or direct capital investment.
He says for Hactl now it is all about investments in upgrading and improving facilities such as eco measures that have significantly reduced its carbon footprint, and it will continue to expand and improve the capabilities of its cargo management system, COSAC-Plus, which has transformed ramp operations through the increased use of mobile data.
Whitehead adds: “The concern must be the general health of the air cargo industry, which suffers from over-capacity that drives rates to unsustainable levels. This impacts the profitability and ROI of all sectors, including handling, which is key to overall industry performance levels.
“It seems likely oil prices will eventually return to nearer historic levels, at which point some capacity will be driven out of the market.”