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Hong Kong government plans to further boost the SAR’s international aviation hub status – in what appears to be a shift in China’s logistics strategy – have been welcomed by local companies.

Yesterday Cathay Pacific said: “Cathay fully supports the government’s proactive initiatives to leverage these opportunities to strengthen Hong Kong’s air connectivity with the Chinese mainland and enhance cooperation with the civil aviation authorities of Belt and Road countries.

“Today’s announcement to foster closer ties and develop visitor sources from the Middle East and ASEAN countries will enable even greater tourism and business opportunities between Hong Kong and these important regions.”

And U-Freight Group subsidiary e+Solutions has taken part in a video launched by the airport authority to highlight Hong Kong’s “unique advantages as a global logistics centre and attract more companies to utilise its infrastructure for ecommerce operations”.

As noted in Loadstar Premium in April, the focus on air has come at the expense of Hong Kong’s port, which is in chronic decline after focus switched to mainland Chinese ports. Indeed, last year Hong Kong fell out of the world’s top 10 container ports for the first time in the history of container shipping.

Last year, the port saw volumes fall 14.1%, to 14.3m teu  – 20 years ago it regularly vied with Singapore and Shanghai ports for the title of the world’s busiest.

As Rhenus’s director of North America, Stephanie Loomis, told The Loadstar Podcast: “I can’t remember the last time a shipper asked for Hong Kong – we see Shenzhen, we see Yantian… Hong Kong is for air freight, and it’s the same [with] Beijing and its local port, Tianjin.

“Hong Kong will be air freight, and that’s all,” she believed.

However Hong Kong is using its maritime expertise to ensure connectivity with mainland ports via innovative Pearl River Delta barge services.

The Hong Kong International Airport (HKIA) group has built a logistics park in the delta city of Dongguan, which includes a Cathay Pacific Cargo Terminal, where barges can be loaded with ULDs and shipped directly to HKG, where there is a temporary pier for unloading.

A trial shipment took place in February, which saw “cargo shipments accepted in Dongguan and transported to Hong Kong International Airport by ship for outbound airfreight, enabling full upstream sea-air intermodal export cargo handling between the Greater Bay Area and Hong Kong”.

In terms of network design, noted Loadstar Premium, this almost replicates the barge service from South China that formed the backbone of Hong Kong port volumes for years, until deepsea container berths were built on the mainland. But the air freight barges come with fewer terminal handling moves, thus taking cost out of the system.

This is due to fewer handling points – the ULDs are loaded directly from the barge onto an aircraft. In the container shipping model, at each point of transfer the container would be stacked in a yard to await the next mode – barge, ship or truck – and every time it was placed in or removed from a stack this would incur a handling charge ($100 per move is an easy ballpark figure).

So, a container that moved from a South China exporter’s warehouse would travel: warehouse; barge terminal gate; barge terminal stack; barge terminal berth; barge; deepsea terminal berth; deepsea terminal stack; deepsea terminal berth; deepsea ship; and include a total of eight crane moves.

The air cargo barge system represents a 25% reduction in handling moves: warehouse; barge terminal gate; ULD build-up; barge terminal berth; barge; HKIA terminal berth; aircraft.

Cathay Group CEO Ronald Lam said: “As our freight volume continues to grow, we are encouraged by the government’s initiatives to continue developing the HKIA Dongguan Logistics Park, enhancing its processing capacity and facilitating more cargo transhipments via Hong Kong to the rest of the world.”

 

Listen to this clip of JP Morgan’s Roula Jeha on the winners and losers of a fragmented trading world

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