Home to the world’s busiest cargo airport, Hong Kong is undoubtedly a vital hub for airfreight, remaining on top amid the geopolitical challenges and disruptions of the last few years.
This has been achieved, in part, through the substantial levels of investment that have flowed into Hong Kong’s air cargo handling capabilities through a variety of stakeholders in recent years, as an array of projects got underway. As a key part of this, Cathay Cargo has been constantly developing its own cargo terminal to meet the evolving demands of the market. Cainiao Network has also recently developed a premium logistics centre that, among other things, supports the booming e-commerce market in Asia. Hong Kong has now introduced a sea-air intermodal model that supports the movement of cargo from the hub into the rest of the Greater Bay Area (GBA) in China, as well as expanding the airport into a three-runway system.
“Hong Kong International Airport and the Cathay Cargo Terminal grow together,” stated Mark Watts, Chief Operating Officer at Cathay Cargo Terminal. The new three-runway system will increase airfreight capacity when it becomes operational, which provides a lot of exciting opportunities for us to grow.”
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Sensitive shipments
Looking to grow as the industry returns to normality, Cathay Cargo has recognised the substantial potential in targeting certain segments that are experiencing rapid growth.
“We’re definitely getting ready to take advantage of that, while continuing to invest in our cargo facilities around special cargo, new technologies and digital solutions. We’re continuously improving our special cargo, expertise and facilities, such as dangerous goods facilities, animal handling, valuable goods and more,” Watts added.
The latest example of investment has been into all aspects of temperature-controlled cargo and the cold chain, with Cathay Cargo Terminal having unveiled its new Pharma Handling Centre (PHC) at the start of 2023. This development comes at a time where the demand for pharmaceuticals has risen, where Cathay Cargo and its terminal are well positioned to deliver the handling capability these industries require.
Cathay Cargo has identified the growth of pharma before Covid, but Hong Kong’s role in delivering vaccines around the globe saw the cargo handler expedite the development of its facilities. Having moved more than 200 million doses of vaccines during Covid, the carrier focused its efforts on bolstering its capabilities around express pharma, handling times – all crucial factors when moving high-value medical cargo.
“Issues categorised as handling-sensitive, time-sensitive, temperature-sensitive, are all important and we have a capability for every single aspect of the cool chain,” Tom Owen, Cathay’s Director Cargo, highlighted.
e-commerce emerges
Another significant shift is the heightened appreciation for the importance of e-commerce as a rapidly growing cargo segment. While e-commerce was always present, its scale and significance have dramatically increased post-Covid. This isn’t just limited to traditional e-commerce, involving consumer electronics. It extends to numerous product categoroes, emphasising the changing landscape in cargo transportation.
“We’ve revamped our mail solution now, which is essentially trying to allow the post offices to compete more with the express cargo segment,” Owen added. “By offering the Cathay Mail solution, which provides tracking and traceability, better visibility in operational handling and a fully digitised back office process, it gives them a much improved and faster process benefiting their own customers.
“We have nine distinct solution categories and every one of these allows us to differentiate from our competitors,” he continued. “Our tagline ‘We Know How’ says to our customers that they can put their trust in us to move the shipments that matter.”
Dongguan, just across the GBA from Hong Kong, is home to where much of the world’s e-commerce is produced, as well as other cargo, such as tech goods, fast fashion garments and alternative smoking products. Cathay Cargo is optimistic that it will be able to leverage its new airfreight terminal in Dongguan and swift connections using a sea-to-air multimodal model to bolster traffic coming to and from the GBA.
“We’re working on building the connectivity. The concept is moving some of the advantages of the Hong Kong hub into the wider GBA, right into the heart of the manufacturing region, Watts explained. “We are very supportive of the Airport Authority’s plan to extend Hong Kong International Airport into the heart of the GBA, ensuring Hong Kong’s relevance far into the future.”
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Technology takes hold
Digital leadership remains a crucial focus for Cathay Cargo moving forward. This emphasis is driven not only by customer demand for increased transparency and real-time data, but also by the significant benefits it brings to productivity and efficiency along the supply chain.
For instance, in the realm of Internet of Things (IoT), Cathay Cargo Terminal has implemented innovative solutions like custom-built refrigerated storage units around the terminal. These units are constantly connected to a terminal control centre, allowing officials to monitor their location, adjust temperature settings, and efficiently manage their placement.
To enhance visibility, Cathay Cargo has recently integrated with AI platforms to enable greater tracking of freight movement into and out of the warehouse, providing customers with detailed insights. This level of visibility extends to knowing whether their shipments are on the ramp, within the cargo terminal, or have exited the terminal.
A forthcoming development is Cathay Cargo Terminal’s role as a pioneer partner in Airport Authority Hong Kong’s cargo data platform. This initiative streamlines processes through the introduction of an electronic shipment release form (ESRF). This digital transformation aims to eliminate paper-based workflows, reduce processing time, and significantly enhance transparency.
“We’re very focused on driving digital innovation,” Watts stated. “More efficient, accurate and transparent cargo handling is not only great for our airline customers, but also for all their customers across the supply chain.
“That’s what we want – for everyone to be able to integrate their systems and have that transparency, it makes everything much more efficient, secure and friendly.
“We’re always trying to take a customer-centric view. Our investments and solutions development are very much driven by our customers and what we think the market is going to do going forward,” echoed Owen.
