Growth may be subdued at Hong Kong International Airport due to restricted freighter, but Wilson Kwong remains confident about the future, due to the breadth and depth of its network.
The chief executive of Hong Kong Air Cargo Terminals (Hactl), the only neutral air cargo terminal operator at the airport says despite restricted freighter capacity, Hong Kong offers what Kwong calls “a unique proposition”.
It offers an unparalleled spread of destinations, choice of carriers and frequencies, scheduled maindeck capacity, modern infrastructure, modern trade-friendly Customs processes and a bi-lingual workforce.
The ‘Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area’ issued in February affirms Hong Kong’s status, and Kwong says Hactl welcomes the plan.
He comments: “This, along with the opening of the third runway now being built, will create the necessary capacity for stronger growth, both in general cargo as well as other higher value-add cargo and e-commerce traffic.”
E-commerce will be supported by the opening of a Premium Logistics Centre by the Cainiao-CNAC-YTO Express joint venture in 2023.
That’s all in the future, of more immediate interest is the opening of the delayed Hong Kong-Zhuhai-Macau Bridge. The bridge opened for traffic in October last year, significantly reducing trans-Pearl River Delta transit times.
Hactl is benefitting from reduced trucking times, with Kwong saying: “That’s a big benefit to our Hacis subsidiary, which operates an RFS network that now links nine Inland Cargo Depots to Hong Kong. By facilitating the fast and inexpensive movement of cargo across the region, it should enable our carriers to extend their market catchment areas.”
Kwong says the impact of the bridge will be “long-term and gradual”, saying: “while the bridge did open later than originally planned, we remain very positive on the long-term benefits this will bring both for Hong Kong and Hactl as the bridge facilitates growth in the Greater Bay Area.”
Business remains strong at Hactl though tonnage fell in 2018 with the departure of Hong Kong Airlines to another handler. Despite Kwong describing this as a “disappointment”, Hactl still handled 1.7 million tonnes.
Kwong says: “We have successfully made up some of the lost tonnage through new customers and organic growth, and an area of particular success is mail. This grew to over 10% of our total business in 2018, and involves both our subsidiary Hacis and Hactl, so is a win:win for us.”
It is still too early in the year to draw meaningful conclusions from results so far, and there are unresolved issues including USA-China trade tensions and slowing world trade, so Kwong says the inclination is “to err on the side of cautious optimism”.
He says changing localised factors are a constant in world trade and tend to balance each other out, saying: “Markets and trade lanes rise and fall; as one disappears or shrinks, another invariably takes its place.”
China is Hactl’s main source of cargo, saying the possible partial loss of the US market would be a “transient problem” that will be overcome as the two countries engage in trade talks.
Intra-Asian business is growing, with e-commerce driving behind the strong results, making the future of air cargo in Hong Kong look positive.
Kwong says: “For Hactl, with over 100 handled airlines, we continue to enjoy a strong geographic diversification that provides a good degree of insulation from any problems on specific trade lanes.”
Like all operators in Hong Kong, Hactl faces challenges due to long commutes from populated areas and almost no unemployment. To counter this, Hactl focuses on staff retention through training, career development, good rewards and a pleasant working environment.
Kwong says: “Our churn is well below average, and means we are the only cargo handler here that does not need to use temporary agency labour; that equates to better continuity and experience, and supports higher service standards.”
Kwong is confident about the future, as it continues to invest in infrastructure and systems, as well as resources and capabilities for premium cargo.
He says: “We are proactive in helping our airline customers to exploit new revenue sources, and see ourselves very much as partners in their success.”