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Expand to stay ahead

Published on Friday, 15 Mar 2013
Photo: DHL

Geography alone gives Hong Kong a significant advantage for it to maintain its position as the world's leading hub for international air freight over the next few decades. Located right at the heart of Asia and on the doorstep of mainland China, it already has all the logistical essentials in terms of cargo sources, connectivity, operational efficiency and professional expertise.

However, as the logistics sector points out, future success can never be taken for granted. In Hong Kong's case, success depends on offering the capacity, speed, reliability and hi-tech support users demand to limit the attraction of rivals.

"Airport expansion is vital for staying ahead," says Jerry Hsu, chief executive, Asia-Pacific, of DHL Express. "That's why we believe the proposal to expand Hong Kong International Airport [HKIA] to include three runways is crucial to meeting the territory's future need for cargo capacity and remaining economically competitive."

Thanks in large part to still-surging mainland-origin exports, HKIA can now claim to be the world's busiest cargo hub for air freight, having overtaken Memphis International Airport in the US in 2011. On tonnage handled there is relatively little in it, but with annual throughput rising steadily at HKIA-based facilities such as Asia Airfreight Terminal and DHL's Central Asia Hub, Hong Kong can extend its lead.

Last year, DHL's Central Asia hub registered more than 200 of its own inbound and outbound network flights on a weekly basis, while also taking up space on more than 700 other commercial flights. Those numbers are expected to rise as Asia grows and the global economy gradually returns to better health.

"The 'global shift' which has taken Hong Kong to the top will continue, powered by growth in China," Hsu says. "But to keep outperforming the regional economy, the city must maintain its excellence in infrastructure. Superior capacity, connections and service quality are the key to continued economic growth," Hsu says.

After opening its hub facility at HKIA in 2000, DHL saw its throughput grow more than five times within a decade. With new airfreight demand from sectors such as fashion, life sciences and high-end retail, such rates of expansion can be repeated.

"But this could change if infrastructure fails to keep pace," says Kelvin Leung, CEO for Asia-Pacific at DHL Global Forwarding. "If HKIA is unable to serve new destinations, expand flight frequencies or maintain schedules during bad weather or emergencies because it does not have enough runways, Hong Kong will suffer economically, as logistics providers will have to re-route or rethink their supply chains."

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