Cathay Pacific moves to improve HKG handling processes

A new Cathay Pacific Cargo initiative utilizes milestones at its Hong Kong (HKG) cargo terminal to measure and improve visibility between its warehouse and ramp handling operations, pinpointing problem areas and eliminating quality failures as the carrier looks to rebuild its network and freighter schedule. The two milestones act as checkpoints for warehouse and ramp workers, Cargo iQ Executive Director Lothar Moehle told Air Cargo World. Cargo iQ is an International Air Transport Association (IATA) interest group that targets transparency and efficiency across the logistics chain. The initiatives, titled “Freight out of Warehouse control” (FOW) and “Freight into Warehouse control” (FIW) are part of a plan intended to streamline the overall cargo shipment journey and optimize operations for “ground-handling performance in the handover between the ramp operating handlers and the cargo terminal, and vice-versa, for imports and exports, at air waybill level,” according to an Aug. 16 release by Cathay Pacific. [caption id="attachment_57131787" align="alignright" width="552"] Cathay Pacific Cargo Terminal at HKG. Photo/Cathay Pacific Cargo[/caption] “There is historically always the chance for service problems when the handover of custody between a [ground handling agent] and ramp handler is not clearly planned and documented, [and] with the FIW and FOW, we have a clear planning and monitoring point,” Moehle said. Creating visibility for stakeholders FOW and FIW in March were added to the Cargo iQ Master Operation Plan , which uses them to measure end-to-end transport of airfreight shipments. In turn, the milestones enable both visibility and planning options for shipments being transported between the warehouse handler and the ramp handler, Moehle said. “In the past, the GHA often had difficulty documenting that their work had been performed as agreed in the [service-level agreement] with their carrier customers,” Moehle said. “At the interface to and from the ramp handler, there was no plan for who must do what and when, and no evidence that the actual activity had been performed. With the implementation of the FIW and FOW, this can now be integrated into the process, monitored and measured.” An electronic messaging system, activated in July, enables stakeholders in the air cargo supply chain to inform each other about the respective milestone status, which can then be used to create or update a route map, communicate a chance in status or even data sets that relay the actual time the freight is being handled at an airline’s facility, Moehle said. Other use instances for messaging include activities that cause status changes, whether scheduled or unexpected. “Previously, the handover between the ramp and the warehouses needed users to compute the timings based on the ULD (unit load device) handover time taken from the raw data of the warehouse operating system,” the carrier reported. “Now, the same system can share that information at air waybill level for every flight.” Indeed, in daily operations, warehouse and ramp operators will be informed with a clearer target time for each activity, a Cathay Pacific spokesperson told Air Cargo World . "Previously, we were only able to track shipment statuses for defined milestones on whether the shipments are flown by meeting the planned time for each of the milestones, while less visibility on the warehouse and ramp handover process," they said. While the new initiatives have been rolled out at Cathay Pacific’s HKG terminal, there are plans for additional rollouts across its network, according to the release. It is unclear where in Cathay Pacific’s network the system will be implemented next; the company was unavailable for comment ahead of publication. Cathay Pacific rebuilds network, eyes growth Cathay Pacific has been eyeing growth as it looks to rebuild its cargo network and schedule following the grounding of its fleet in early 2022 due to updated quarantine requirements for Hong Kong-based cargo crews . In H1 2022, Cathay Pacific operated 32% of its pre-pandemic cargo capacity as loosening and adjusted COVID-19 restrictions and quarantine rules enabled the slow return of capacity from May, according to the carrier’s Q2 earnings slides. The carrier continued to show strong cargo performance in H1 despite capacity constraints, with H1 cargo revenue reaching HK$12.148 million (US $15.49 million), up 9.3% compared with H1 2021, Cathay Pacific reported. In H1 the carrier carried 526,000 tonnes of cargo, with additional capacity created by cargo-only passenger flights and “preighter” aircraft , or planes with some economy seats removed from the main cabin. The company currently operates six such aircraft. As the carrier continues to work toward recovery, it aims to gradually bring back aircraft parked overseas to HKG and hire several thousand new staff members for its cargo terminal and airport handling subsidiaries, according to the earnings report. Cathay Pacific aims to operate 65% of its pre-pandemic cargo capacity by the end of 2022. “We do anticipate this imbalance we’ve seen between supply and demand continuing, albeit the amount of passenger belly space is starting to increase as other airlines globally are mounting more passenger flights,” Chief Financial Officer Rebecca Sharpe said during the carrier’s earnings call. “We'll continue to operate the cargo-only passenger flights as a way of maximizing our capacity. So overall, in terms of cargo performance in the second half , we are expecting [and] projecting a solid peak performance .” July statistics, August outlook In July, the carrier transported 100,714 tonnes of cargo, down 17.2% year over year, according to Cathay’s latest traffic statistics. Although cargo demand “remained flat” in Cathay Pacific’s key markets in July, resulting in a “quieter” summer for air cargo, the carrier intends to operate a full freighter schedule in August, Chief Customer and Commercial Officer Ronald Lam said in an Aug. 16 statement. August’s freighter plans will be “complemented by regional cargo-only passenger flights and more belly capacity provided by our additional passenger services,” Lam said. “However, long-haul cargo-only passenger flights will be limited.” Cathay Pacific Group ranked No. 8 in Air Cargo World ’s most recent Freight 50 ranking of the world’s top carriers, based on 2020 tonnage. Join Air Cargo World for our next webinar, “Forward Thinking: Best practices for freight forwarder success,” on Tuesday, Sept. 13, at 11 a.m. ET. Click here for more information and to register. This story has been updated with additional comments from Cathay Pacific Cargo.

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