Perhaps one of the best places to take the pulse of the air cargo industry is in Hong Kong, where more cargo came through Hong Kong International Airport in 2013 than any other airport in the world. While the first quarter of 2014 was a good one for many of the Hong Kong-based companies in the industry, the sector overall appears to be holding its own.
“I don’t have a crystal ball, but I think this year will be quite stable,” Alaina Shum, general manager for aviation logistics at HKIA, tells Air Cargo World.
After a couple of “stable” months to start the year, cargo throughput in March rose to 10.4 percent over March 2013, giving the airport a robust first quarter overall.
There is certainly plenty of room for cargo growth in the coming years. Cathay Pacific’s impressive, new, highly automated cargo terminal gives HKIA an abundance of capacity that operators of the airports’ three huge cargo terminals hope to grow into over time.
There is also no shortage of competition to handle cargo. Cathay, Hong Kong Air Cargo Terminals Limited and Asia Airfreight Terminal are battling it out to keep existing customers and acquire new ones. On the surface at least, it seems to be a courteous competition as each has good things to say about the others. All say they sell on service.
Cargo management in Hong Kong says a sustained growth in the industry is dependent on improving economies in the U.S. and Europe buying things that are made in Asia and require shipment by air.
A looming issue in Hong Kong is airport infrastructure. The long talked about third runway at HKIA remains in the planning stage as environmental issues are hashed out. Projections are for construction to begin in 2016 and the runway to be operational by 2023. For cargo terminal operators, construction can’t come soon enough.
HACTL’s chief executive, Mark Whitehead, says the airport will reach a saturation point in terms of landings and takeoffs within three to five years. At that point, the logistics industry will stagnate, he says.
“It’s essential to Hong Kong,” Whitehead says of the third runway. “For me, it’s quite simple. Without the third runway, logistics can only go one way. The business will still be there, but it will just be handled somewhere else.”
That somewhere else could be airports in mainland China and other Asian locations.
Whitehead says 2023 is a long way away and he would love to see that timetable shortened. He believes that “in typical Hong Kong fashion,” the process will be expedited at some point.
Hong Kong’s acute labor shortage is certain to come into play too. With the cargo terminals and the airport already devoting considerable resources to recruiting workers, acquiring enough labor to build the massive runway project could be problematic.
One thing is certain. The next few years will be interesting in Hong Kong as the runway moves toward its projected construction date.