HKG to implement new intermodal cargo model

Airport Authority Hong Kong’s novel model to transport air cargo from Dongguan to Hong Kong International Airport by sea is projected to cut costs and handling time extensively. When the new model is fully implemented, it is expected to reduce operating costs by about 50% and handling time by about 33%, according to the authority. [caption id="attachment_57134075" align="alignright" width="300"] Cathay Pacific Director Cargo Tom Owen (fourth from left); Airport Authority Hong Kong (AAHK) Executive Director, Commercial Cissy Chan (fourth from right); Cathay Pacific Services Ltd. Chief Operating Officer Mark Watts (third from left); and Airport Authority Hong Kong General Manager, Aviation Logistics Ian Kwok (third from right) attend the signing ceremony with other AAHK personnel. (Photo/Cathay Pacific)[/caption] Last Thursday, Airport Authority Hong Kong (AAHK) signed a cooperation framework agreement with Dongguan Municipal People’s Government to create a Hong Kong International Airport (HKG) Logistics Park in Dongguan and a new airside intermodal cargo pier at HKG. Air cargo will travel from Dongguan to the airport — about 90 kilometers — via sea, which is projected to save money, time and fuel, according to AAHK. HKIA handles approximately 75% of international air cargo in the Guangdong — Hong Kong — Macao Greater Bay Area (GBA). With this model, security screening, palletization and acceptance for GBA’s export cargo can be completed in Dongguan, and then shipped to HKG by sea without the need to undergo additional security screening. Reliability is key function of model Freight and logistics expert Charles H.W. Edwards, vice president of cargo advisory SASI World , said the model focuses on bettering “not just speed, which is important, but reliability.” “The main route on the west side of the Pearl River Delta, S3, which passes through Shenzhen, is close to full capacity,” Edwards told Air Cargo Next . “With such a critical highway being so full, the level of reliability suffers.” This problem is not unique to China, making implementation of this model at other airports a smart move, he said. “In the end, I expect that this service and potentially others elsewhere will increase the demand for air cargo services,” Edwards said. Utilizing water transfer in this manner accomplishes several goals, according to Edwards, including: I ncreased reliability , by sidestepping traffic backups on roadways ; L owered costs, as water transport is typically 20% less expensive than road haulage; I mproved convenience by streamlining the process ; I mproved tracking, as it is easier to track one barge as opposed to multiple trucks; and Improved environmental impact, since water transport has a lower environmental footprint than road transport. All of this will make the air cargo industry more attractive to cargo owners, Edwards said. But he stressed that the key benefit is reliability. “The COVID pandemic underscored the importance … of reliability over speed,” he said. “If a supply chain manager can count on the arrival of the next shipment at the promised date and time, the need to add ‘safety stock’ inventory declines. “I see this new service as an acknowledgment of the need to improve reliability in the complete supply chain and to provide a service which helps the financial health of the users of the air cargo logistics industry’s services.” Partners expect myriad benefits AAHK officials said the model will significantly increase efficiency for freight forwarders and airport personnel. “The intermodal cargo transshipment initiative is an innovative model aiming to attain unparalleled efficiency in international cargo handling between GBA and Hong Kong,” AAHK Chairperson Jack So said in a release, adding that this initiative will enable HKG “to maintain its role as the No. 1 international air cargo hub.” Read more about HKG here. Cathay Pacific Services Ltd. was the first cargo terminal operator to sign an air cargo service agreement with AAHK to operate in the model’s pilot program last year. “The HKIA Logistics Park offers a cost-effective and efficient end-to-end solution to our freight forwarders and shippers in moving cargo to and from the GBA,” Cathay Pacific Director Cargo Tom Owen said in a release. The project will be completed in 2025; meanwhile, a pilot program has been reported successful. “It gives us a resilient — especially in times of pandemic or future circumstances — inbound pre-carriage option,” a spokesperson for pilot participant Yusen Logistics (Hong Kong) Ltd. told Air Cargo Next . “This new scheme saves unnecessary manpower spent in HK, which is replaced by equally efficient ULD operation in Dongguan and direct injection to HKIA ramp ready for loading onto aircraft outbound.” The Yusen Logistics spokesperson listed decreased staffing and increased dependability as key benefits. “Going forward, we hope this new channel can be applied on global imports into China via HKIA as well,” he said. HKG was ranked the top airport by overall cargo tonnage in 2021.

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