Hactl taking on mainland e-commerce boom

Munich — “If I walk around here trying to sell Hong Kong, I’m wasting my time,” Hactl CEO Mark Whitehead told Air Cargo World at this year’s Logistics Trade Show in Munich. “The airlines live in a complex, competitive business, and they will put through Hong Kong whatever tonnage makes sense to them, and I will handle as much of that tonnage as I possibly can.”

Whitehead’s candor is reflective of Hactl’s pragmatic approach to operating in one of the most dynamic air cargo markets in the world. That said, Chinese demand for e-commerce continues to grow. Hong Kong Airport is on track to logging seven years as the world’s busiest cargo airport, and Hactl is at the center of this action.

While analysts jump to point out weaknesses and slowing in the Chinese economy, Whitehead noted that the influence of an air cargo terminal operator was somewhat limited. “As an American, how do you think President Trump is going to affect the American economy?” He asked. “You don’t know. The market is the market. You don’t set the market, the market is there, and you play your game in the market.”

Whitehead is confident that Hactl is on track to “end up 15 percent ahead of last year.” And like many of his peers, he is already seeing those volumes rise on the back of China’s booming e-commerce sector, where demand for international goods shows no sign of slowing.

Hactl has a subsidiary that works primarily with the Chinese and Hong Kong post offices, and with its expeditor customers. “We do a lot of cross border traffic into China,” Whitehead said, adding that, Hactl was not involved in the last mile delivery. Instead, the terminal operator outsources that to its joint venture partners from China.

“It’s rare for me to say it but I believe that e-commerce is going to change all of our lives,” Whitehead said. “I mean, people get their lunch delivered by e-commerce in China.”

Hactl’s joint venture, Hacis, has eight depos on the mainland. Air cargo is routed through the depos headed to and from Hong Kong Airport. At the parcel-delivery level, Whitehead said that Hactl was not involved. “Somebody else does that, our joint venture partner will contract that out.”

The bonded trucking option, sealed and tracked with RFID, is of especial interest for carriers that are looking to penetrate the mainland market without increasing costs. Six of the eight depos are IATA airport coded, “which means an airline flying cargo into Hong Kong can regard these as six extra destinations,” Whitehead said. “You don’t have to know how it gets there.”

One of the depos is in a designated e-commerce zone in China, and Hacis provides a solution to a technological deficit at other airports that are struggling to keep pace with e-commerce demand. “Many domestic Chinese airports don’t have the technology to securely scan these shipments, so they are looking for an alternative route,” explained Derek Jones of Pilot Marketing, “and that route it Hacis, and Hong Kong.”