• Skip to main content
  • Skip to primary sidebar

Ad – Bottom Content

Hactl’s strategic focus keeps it flying high

Payload Asia

Leaderboard

  • Home
  • Latest News
  • Channels 
    • Carriers
    • Aircraft Manufacturers
    • Airports
    • Courier & Mail
    • Freight Forwarders
    • Express
    • Ground Handling & Cargo Terminals
    • Logistics
  • 9th Payload Asia Awards
  • Awards & Conferences 
    • 9th Payload Asia Awards
    • Gallery
    • About
    • Rules and Regulations
    • Categories
    • Entry Form
    • Subscribe
  • Subscribe
  • Advertise
  • More 
    • Event Calendar
    • Directory
    • Contact Us
Share

Hactl’s strategic focus keeps it flying high

March 2, 2015 by Payload Asia

Without a doubt, living life on the edge of China’s mainland has its advantages, but it is not without its with challenges too. Growing capabilities of China’s logistics infrastructure and airports, shifting production locations, growing costs in Hong Kong and delays in getting a third runway at HKIA all stoke the eternal question of Hong Kong’s future as a logistics hub. And of course, losing your biggest customer and with it some 1.3 million tonnes of cargo handling business leaves a bruise – from a punch Hactl saw coming – for some time.

Having come through the exodus of Cathay Pacific Cargo volumes from Hactl to Cathay’s own state-of-the-art facility next door without a significant degree of trauma – another local carrier, Hong Kong Airlines – with a decent, but obviously smaller scale than Cathay’s, stepped in as a new customer and that has softened the blow along with growth from Hactl’s existing customers.

Because of Hactl’s intense strategic focus, it also has other options – no opportunities more correctly – to help build up its business again. And to be fair, considering the current air cargo environment, its not like it’s struggling.

The latest figures show Hong Kong’s largest independent handler ended 2014 with its strongest quarter of the year, handling 491,476 tonnes (up 4.9 per cent on the same period of 2013) for a total tonnage handled of 1,814,726 tonnes, up an impressive 8.7 per cent year-on-year.

Speaking to Payload Asia, Vivien Lau, managing director of Hong Kong Air Cargo Industry Services (Hacis) and board member of the Hactl Group until very recently when she took on a new role as executive director of Hactl, replacing Lilian Chan (see sidebar), noted the ground handler was seeing growth from two key sources, both of which will continue to grow business into the future. The first is new business along with growth in existing business.

“We are seeing some positive growth, one of which is Hong Kong Airlines and we have been very impressed by how aggressive they have been. You can see they are opening new routes and also adding in more freighters so that helps a lot on the tonnage. We are also very proud of the fact that the majority of the Middle East carriers – Qatar, Emirates and Saudia – are under Hactl,” she said.

Lau also pointed to the fact that from last year all DHL-related carriers are under Hactl, including Southern Air, Polar Air and also Aerologic. “So that also contributed to Hactl’s additional tonnage,” she notes.

Other key growth areas include pharmaceuticals – although Lau cautions this is one area potentially under threat from ocean shipping – with Hactl becoming the only handling facility at the airport to achieve Good Distribution Practices (GDP) accreditation in the middle of last year, bringing it in line with the World Health Organisation’s (WHO) quality assurance guidelines for the handling of pharmaceuticals.

Hactl also invested in two temperaturecontrolled dollies for shifting cargo from the aircraft to its temperature controlled storage. It also has what it calls a ‘golden route’ which is the shortest route from apron directly to a designated truck park for consignees who require immediate release of the cargo.

E-commerce growth

Another key growth driver she identifies, which also relates to the DHL business, but more specifically from the Chinese mainland, is that of the express sector. “The trend of e-commerce is very, very impressive and especially for Hong Kong and the fact air cargo always relies on China. This is also an interesting area with much potential for innovation,” she explains.

“The express cargo, sometimes they don’t have enough slots and also people are sometimes looking for slightly better services, but not as expensive as express,” Lau says. “Some customers are now looking for something in between – between general cargo and express.

Something may develop in between to cater to the new e-commerce express products. A lot of Asians are actually thinking along those lines,” she says in reference to conversations with freight forwarders.

In China there’s also a lot of policy changes in terms of customs procedures and officials want to develop a new policy for the e-commerce companies. “That’s why a lot of freight forwarders based in China are looking for a new solution, something in between,” she says adding that general cargo is also seeing the e-commerce trend, but while it provides the volume, the weight is generally lower which means pressure on yields for the general cargo service providers.

Lau cited the example of popular Chinese e-commerce website Taobao, part of the Alibaba Group, which is focused on China’s domestic market, as a key reason along with other similar companies for the growth of air express.

“With the growing middle class in China they’re expecting more luxury goods because the brand means a lot and they’ve got the purchasing power to buy something overseas. Rather than traveling to buy all the branded luxury goods they are ordering from overseas.

We are also seeing the trend and Hong Kong is also benefiting from it because of the international flight connectivity is far better than China.”

And because Hong Kong is a free trade zone, rather than importing to mainland China where import taxes will apply, they are shipped in bulk to Hong Kong. “Hong Kong can provide a buffer – some of the e-commerce sites are importing from a particular shipper, storing it in Hong

Kong and then once there’s a delivery it’s broken down to the piece level and sorted in Hong Kong before it goes into China for delivery to individual consumers.”

The China challenge

But part of the overhaul of customs and new e-commerce regulations is the development of the Shanghai Free Trade Zone. Lau was part of an official Hong Kong delegation which travelled up to Shanghai to take stock of what it was all about and what it could mean for Hong Kong.

“When it was first announced everyone in Hong Kong was quite concerned, but with the Hong Kong delegation team, our conclusion was that while China is opening up its bureaucratic procedures step-by-step, it still takes time. You can see the direction is there,” she said, adding that Hong Kong needs to act now to “optimise its advantages – the next 3-5 years will be critical for Hong Kong.”

And certainly this is going to be a difficult period with Hong Kong International Airport’s third runway not expected to be operational before 2023 and saturation forecast by 2018.

Meanwhile, China continues its push with a major initiative announced a couple of years back to develop, or build from scratch, more than 200 airports across the vast country. Equally worrying is neighbouring Guangzhou, which is the hub of rapidly growing SkyTeam alliance member China Southern Airlines.

“We’re seeing that Guangzhou airport is also being very aggressive and China Southern with all its new aircraft is growing the hub, so we are monitoring very closely, but in Hong Kong we still have the best international connectivity, our Customs are still far more efficient and we have the rule of law and a lot of the international headquarters still prefer Hong Kong. So short-term we are still confident, but longer-term is more worrisome,” Lau says, neatly summing up the equation.

The other aspect that needs to be considered Lau notes, is that when Chinese officials want to do something, you can be sure it will happen. She cites the case of Zhuhai Airport, which operates only domestic flights. With Flextronics manufacturing Microsoft’s popular Xbox out of Zhuhai (as well as Zhengzhou), Hactl was expecting there would be a lot charter flights out of Hong Kong last year.

But much to everyone’s surprise and certainly disappointment, aside from nearly 100 charter flights going out via Zhengzhou, a significant portion also went via Zhuhai. “We were so shocked because Zhuhai is not supposed to do international flights and their cargo terminal is not well-qualified – there’s no equipment and even the Customs are not used to it, but because of Zhuhai government support, the airport handled the Xbox shipments.

“So there was something like 40 charter flights departing from Zhuhai and instead of going through the cargo terminal which is very inconvenient and inefficient because it’s not set up for international cargo exports, they just laid the product outside the terminal and did all the palatalization on the apron! So that took the business away from Hong Kong.”

And not to hit the panic button, but Lau does point to the ocean shipping side for an instructive lesson on how number one can very rapidly become number two, as was the case of Hong Kong’s position as the largest container shipping port, now relegated to second spot behind Shenzhen.

But this is precisely where Hactl’s game has always been different. There are really no surprises in anything that has come Hactl’s way – China always was going develop and build up its logistics/ air cargo capabilities and Cathay was probably always destined to do its own handling as well.

 

And Hactl’s foresight well over a dozen years ago will continue to provide growth for itself and HKIA well into the future, as it has since it rolled out its innovative road feeder service way back in 2000 through its Hacis logistics unit which was established even further back in 1984.

Granted it was a different era back then – China’s airport development was at a vastly lower level than today and Hactl’s pre-eminence in Hong Kong was unrivalled at the time – and that surely meant the move to tap mainland cargo was more on the opportunity side than the challenge side of the equation. But beyond doubt that early ground network has well positioned the cargo handler to not just ride out the bumps and grinds of life on the edge of China, but to tap the opportunities as well.

Flying without wings

Through its Hacis SuperLink China Direct service the ground handler offers a unique product offering expedited road feeder service for air cargo. “Hacis has always been strategic in terms of extending the airfreight of Hactl in a different way. In Hong Kong it could be extending in terms of supply chain influence with freight forwarders.

Although Hactl has always been seen as a single terminal in Hong Kong, with this network of Hacis and the road feeder services we are actually a lot more. We want to make sure all the cargo business comes back to Hong Kong.”

Under the Intermodal Transshipment Facilitation Scheme (ITFS) in Hong Kong and Quick Pass mode (QP) in China, cargo is transported non-stop between air cargo terminals in Hong Kong and Customs-bonded Inland Cargo Depots (ICDs) in China. Currently Hacis operates six depots in China – all with IATA codes meaning all cargo travels into China on the Master Air Waybill (AWB) – Pearl River Delta cities of Shenzhen, Guangzhou, Huangpu, Dongguan, along with the coastal cities further north of Xiamen and Fuzhou.

“It’s just like a interline arrangement except the second part is by truck, so it was a innovative solution back then because we broke through those customs issues, so it also gives piece-of-mind to those shippers overseas,” explains Lau.

“It was pioneering and still quite unique,” Lau says, noting that its role has changed slightly over the years.

“We’re seeing the Chinese airports are very well developed these days so rather than fighting head-to-head with them we may try to the base where the cargo is and set up a location there. To start off we were more focused on bringing cargo from Hong Kong to China because Hong Kong was always the gateway, but with the more developed Chinese efforts we are seeing a lot of cargo coming from China back to Hong Kong.” And at 600,000 tonnes per year, “we are quite proud of this because it’s equivalent to the cargo tonnage of some Chinese airports,” Lau says.

“Last year we saw significant growth to Dongguan. The plan is we need to educate and tell them this is where ultimately your cargo is going. We are promoting a lot on this Dongguan depot.

Bridging the gap

Related to this is the next major development in the Pearl River Delta (PRD) and one which ‘should’ be beneficial to Hong Kong, although nothing is guaranteed considering China’s dynamic landscape, that being the completion of the Hong Kong–Zhuhai– Macau Bridge in 2016. The massive US$10.7 billion project consists of a 50km series of bridges and tunnels that will connect Hong Kong, Macau and Zhuhai – the three major cities on the Pearl River Delta.

Currently the only land-link to Hong Kong is the single link through Shenzhen where historically all the factories were located. But with the factories moving further inland and westward most of this cargo destined for Hong Kong now moves by sea, which involves a two-hour voyage not counting the time at ports on either end. With the new bridge that same journey will take only 45 minutes, “so there could be some opportunities there, but it takes time to change the mind set,” Lau notes.

Hacis is now looking to extend its depot network to tap the potential from this connection, likely in either Zhuhai or possibly a bit further north in Nansha. At the same time Lau said, “we are looking for new partners in China particularly e-commerce and also on the western part of the PRD because of the new bridge, because we don’t know how the game will change so we are preparing ourselves for that.”

Management changes

The Hong Kong Air Cargo Terminal Ltd (Hactl) has recently announced that Lilian Chan, executive director of Hactl is taking up a new role as Global Ambassador for the company, commencing 1 February 2015.

In her new position, Chan – for many years the commercial head of Hactl and well-known across the industry – will dispense with all office-based duties and administration, to focus on maintaining and developing customer relationships on a global basis. She will continue to represent Hactl at key industry conferences and events.

“Lilian has worked enormously hard in her employment with Hactl, has made a major contribution to our success and has given us our firm footing in the industry,” said Hactl chief executive Mark Whitehead.

“The additional representation of Hactl she will bring to key markets and this opportunity to cultivate deeper global relationships, will greatly benefit Hactl. In addition, the new arrangement enables us to retain Lilian’s invaluable knowledge, skills and industry contacts.”

Added Chan: “Hactl has been a very large part of my life for the past decade; it would have been very difficult for me to make a total break from the company. This new role allows me to focus on that part of my job which I enjoy most – interacting with our valued customers around the world – and I very much look forward to meeting existing and future customers in my new capacity.”

Lilian’s successor as Hactl’s executive director of commercial and business development will be Vivien Lau, managing director of Hacis (Hactl’s added-value logistics subsidiary) since October 2012.

Welcoming Lau to her new post, Mark Whitehead comments: “Vivien has led the transformation of Hacis to become an important element in Hactl’s future strategy. In Vivien’s new role overseeing both Hactl’s commercial strategy and Hacis’ development, her diversified management experience, determination and people skills will help to take Hactl further forward, building on the strong foundation created by Lilian.”

Other Topics: Air & Cargo Services, air cargo, Air Cargo Asia, air cargo freight, Air Forwarding, air freight, Air Freight Asia, Air Freight Logistics, air freighter, air freighting, Air Logistics Asia, Air Shipping Asia, airlines cargo, airways cargo, asia cargo news, cargo aviation, DHL, Hactl’s strategic focus keeps it flying high

Related Articles

  • deugro on securing air capacity at a time of disruption
  • ECS Group to represent Korean hybrid carrier Air Premia
  • Vienna Airport, Lufthansa team up on pharma shipments
  • FAA issues airworthiness criteria for Wingcopter
  • Penang freight forwarders host APAC meeting in July
  • Kerry Logistics rolls out e-trucks in Hong Kong

Ad – After Content

Primary Sidebar

Ad – Uppper Boombox

Trending News

  • deugro on securing air capacity at a time of disruption Pavel Kuznetsov, air chartering head at deugro, gives a... 98 views | posted on May 17, 2022
  • Penang freight forwarders host APAC meeting in July Forwarders in Asia Pacific, led by the FAPAA, will hold... 95 views | posted on May 17, 2022
  • Kerry Logistics rolls out e-trucks in Hong Kong The introduction of the e-trucks will be a trial run as... 89 views | posted on May 16, 2022
  • ECS Group to represent Korean hybrid carrier Air Premia The Korean hybrid service carrier will launch a new Los... 83 views | posted on May 17, 2022

Payload Asia Awards

  • Nominations now open for the 9th Payload Asia Awards Nominations are now open for the 9th edition of the Pay... by PLA Editor | posted on May 9, 2022
  • Air cargo takes spotlight at 8th Payload Asia Awards Winners of the prestigious Payload Asia Awards were ann... by PLA Editor | posted on October 5, 2021
  • Payload Asia Awards A toast to excellence, resilience at 7th Payload Asia Awards More than 60 industry professionals attended the digita... by PLA Editor | posted on January 22, 2021
  • Singapore to host air cargo, logistics events in 2023 transport logistic and air cargo Southeast Asia will ta... by PLA Editor | posted on December 6, 2021

Subscribe To
Our Newsletter


Select list(s) to subscribe to


By submitting this form, you are consenting to receive marketing emails from: Harvest Information Pte Ltd, 150 Orchard Road #07-05, Singapore, 238841, http://www.payloadasia.com/, https://tva.onscreenasia.com/. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Ad – Lower Boombox

Payload Asia continues to be the authoritative source for informative, accurate and up-to-date news and information on the air cargo industry and related sectors.
With its updated and refreshed look the print edition continues to provide high quality coverage on the Asia-Pacific, India-Middle East, Europe-CIS, North & South America and Africa air cargo markets.

© 2021 Harvest Information. All rights reserved. Privacy Policy

Partner Sites : Asia Food Journal . Asia Food Journal China . Control Engineering Asia . Control Engineering China . Electronics Manufacturing China . Pharma Asia . Pharma Asia China . Logistics Insight Asia

We use cookies and similar technologies to improve your browsing experience.
Continuing to use this site means you agree to our use of cookies. I agreeRead More
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled

Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.

Non Necessary

Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.

Analytics

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.

Performance

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

Advertisement

Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.

Save & Accept

1