HONG KONG – After being the manufacturer to the world for the last few decades, led mostly by the inexpensive labor in China, the Asian market is rapidly evolving into more of a consumer society, creating a new dynamic for global trade lanes in and out of Asia, with cross-border e-commerce dominating the scene. That was the general theme during the session, “Changing Landscapes of Asian Air Cargo,” held Tuesday at the Asian Logistics and Maritime Conference (ALMC).
In the panel discussion, speaker Simon Large, director of cargo for Cathay Pacific Airways, said the changing market dynamics are forcing carriers to think about new routes moving closer to where the commodities are being shipped. On the same day as the session, he said, Cathay had launched a new weekly freighter route from Hong Kong to Brisbane West Wellcamp Airport, a place that few people had even heard of, even in the aviation industry. However, the booming demand for perishables in Asia made the route profitable, as the first 747-8F lifted off that morning filled with fresh beef, 15 tonnes of milk powder mangoes, among other items.
In this video clip, Large talks about the reasons behind creating the service to Wellkamp:
“We’re not an integrator, but we do carry a lot of e-commerce by consolidation,” Large said. “We’re also able to provide track and trace capabilities – that’s what they want.”
Sebastian Chan, president of freight forwarding in UPS’ Asia-Pacific region, agreed that perishables – ranging widely from penguins to horses to fresh fruit – are all examples of the “growing appetite of Asian consumers” that are driving demand for shipping goods markets as far away as South America. “We’re seeing lots of manufacturers moving to other regions” to be closer to their customers, which has led to new hub-and-spoke patterns developing around smaller, secondary airports.
To cater to the e-commerce business, Chan said UPS has invested in several platforms designed for the needs of online shipping, such as iParcel, which provides back-office functions such as instantly calculating local currency exchange rates and customs requirements. Also, the integrator offers MyChoice, allowing consumers to control their shipment options, such as home or office delivery and the use of Uber-like, on-demand courier services.
“Hong Kong is very important to us,” said Wu Changquan, general manager of Guangdong Postal Express and Logistics. “We are gradually becoming specialized e-commerce providers. Exports have doubled what they were before.” Cross-border shipments, he added, now make up 60 percent of Guangdong Postal’s volumes.
Since Hong Kong is not a major manufacturing location, Hong Kong International Airport (HKIA) specializes in transshipments, making it well suited to the cross-border e-commerce trend. “Operations at Hong Kong are at their maximum design capacity today, so we need to be able to solve for that,” said Lars Winkelbauer, vice president of aviation, network planning and control for DHL Express’ Asia-Pacific region.
In this video, Winkelbauer describes what needs to be addressed to boost the capacity for transshipments at HKIA:
Toward the end, the panelists briefly discussed the effect of the recent U.S. election might have on cross-border e-commerce. Wu, of Guangdong Postal Express, succinctly summed up the feeling of the crowd. “I have one sentence: Whether its President Obama or President Trump, they cannot stop the trend of international e-commerce,” he said, to loud applause and cheering from the ALMC audience.