Global conditions notwithstanding, Mark Whitehead, CEO of Hong Kong Air Cargo Terminals, expects business in the long term to take off for new heights. Sophie He reports

Hong Kong Air Cargo Terminals Ltd (Hactl), the city’s major independent cargo handler, expects business in 2015 to remain flat from 2014, due to the depressed European economy and slower growth on the Chinese mainland.

However, in the longer term, the air cargo industry will post robust growth, Mark Whitehead, chief executive of Hactl, told China Daily.

The theoretical capacity for Hactl is to handle 3.5 million tons of air cargo per year. But in 2014, since Hong Kong flag carrier Cathay Pacific moved to its self-handling terminal next door, Hactl lost some market share, handling about 1.8 million tons of air cargo.

Hactl, which bills itself as the only neutral air cargo terminal operator at Hong Kong International Airport, has about 40 percent share of the SAR’s air cargo market, matched by Cathay Pacific, while the rest belongs to Asia Airfreight Terminal (AAT), Whitehead said.

As for this year’s performance, Whitehead expects it to be quite similar to that of 2014. “Air cargo is not growing at the moment, partly because Europe is so depressed,” he said, adding that the slower economic growth on the mainland has also had an impact on Hactl.

The air cargo industry is directly linked with world trade, and any dip in the latter would have a direct impact on business, Whitehead explained. “Hong Kong is the world’s largest air cargo airport, so we feel that impact very quickly. But it is a cyclical business, things go up and down, you just read the cycles and you react accordingly.”

Despite facing a challenging external environment, Hactl has been consistent in launching initiatives to increase its competitiveness.

“We always have initiatives going on, air cargo is a very dynamic business. For example, we recently got ourselves certified under the World Health Organization (WHO) system for handling pharmaceutical products, which is all about being able to demonstrate the temperature control of the product the moment that it arrives and leaves the terminal,” said Whitehead, emphasizing that Hactl is the first in Hong Kong to receive this accreditation. The WHO Good Distribution Practices annual surveillance audit and accreditation covers the provisions of handling, logistics and storage services for pharmaceuticals.

E-commerce in focus

He added that the focus of the industry is always shifting and one of the big things at the moment is the rapidly developing sector of e-commerce, so Hactl is actively looking at opportunities to handle more and more e-commerce products.

Products generated from e-commerce are different from the general air cargo, they come in as a lot of small packages, and Hactl also needs to modify its system to make sure it can handle this efficiently.

As consumers become wealthier, flying in perishables is also a noticeable trend in Hong Kong, as more and more food is ordered in by air, according to Whitehead.

“The demand for fresh sea food, live lobsters, live salmon and fresh vegetables is rising. We have to constantly maintain and upgrade our information technology (IT) system, which is why we have 120 IT specialists in the company.” Hactl is capable of handling all kinds of cargo, whether dangerous goods or live animals or perishables, he asserted.

The past few months have seen Hactl launch several new products, one of which is a smart phone application for efficient goods movement, Whitehead said. Truck drivers who need to pick up cargo when they arrive at the airport can download the app, where they can be told which dock they need to go to.

As for getting the better of local competitors, Whitehead believes Hactl has several advantages, not least of which is its huge body of experience in the air cargo industry.

“We have been doing this for a very long time, next year will be our 40th anniversary,” he pointed out.