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What Does the Future Look Like For the Hong Kong Air Cargo Industry?

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Since the start of 2020, Asia Pacific has experienced an overwhelming increase in e-commerce shipments. To be able to meet this demand and offer the support required to adequately handle the high volume of air freight, strong logistics and supply chain capabilities is key. 

Hong Kong is well positioned to be an international aviation hub, connecting other hubs like Shanghai and Bangkok. In this article, we provide more details of the city’s plans to expand its international airport and its partnership with DHL Express’ Central Asia Hub. 

Hong Kong's role as an aviation and logistics centre 

Hong Kong ranked 25th in the DHL Global Connectedness Index (GCI) – a report that tracked the globalisation of 169 countries from 2001 to 2019. Compared to the other Guangdong-Hong Kong-Macao Greater Bay Area (GBA) members, such as Macau, Shenzhen, Zhuhai and Guangzhou, Hong Kong is a highly cosmopolitan city. What makes Hong Kong a more attractive city is its airport — the Hong Kong International Airport (HKIA) is connected to 220 destinations, making it a well-connected hub in the region. To cement Hong Kong’s role as Asia’s leading logistics hub, HKIA is set to undergo several major developments. This includes the Three-runway System, which it aims to have commissioned by 2024.

“As online sales multiply in Asia Pacific, Hong Kong ramps up its efforts to meet the growing demand of the businesses in the city. With added facilities, an expanded airport and improved technologies, both Central Asia Hub (CAH) and DHL Express are ready to handle the growth in shipping volume,” declared Chee Choong Ng, Senior Vice President and Managing Director of DHL Express Hong Kong and Macau.

“These investments are testament to our continued confidence in the region. They are crucial not only in the near term as we expect to tackle an unusually strong peak season, but it will make sure that we are well-positioned in the long run to keep global trade running as e-commerce and cross-border trade grow,” said Ken Lee” said Ken Lee, CEO of DHL Express Asia Pacific. 

E-commerce growth

The growth of e-commerce in the last few years was driven in part by the COVID-19 pandemic. Lockdowns spurred those who had not explored online shopping to start buying products like groceries, electronics and other household items online. 

“The pandemic has caused unparalleled changes to the air cargo industry and it will likely take a long time for the industry to recover to pre-pandemic levels. But having a dedicated fleet and well-implemented contingency plans have helped to keep our network fully operational despite the overnight disappearance of commercial air belly cargo space. The growth in e-commerce shipment volumes will continue to outpace the available air cargo capacity in the industry, strengthening the case to invest in adding new dedicated aircraft to our fleet, open up new routes, and supplement our fleet with charter flights,” said Sean Wall, Executive Vice President, Network Operations & Aviation, DHL Express Asia Pacific.

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Central Asia Hub in Hong Kong

Statista reports that the share of retail in the Asia Pacific region is expected to grow by 10% by the year 2025, the largest expected increase compared to other regions like Europe or North America. DHL partnered with HKIA to set up the Central Asia Hub (CAH) in 2004, one of three global hubs for DHL. CAH connects with more than 70 DHL Express gateways in the region, and provides additional support for other DHL hubs in Asia Pacific, such as Shanghai and Singapore.

With a 12% year-on-year growth in shipping volume, plans to expand CAH were launched and are expected to be fully operational by the end of 2022. DHL Express invested a total of HK$2.9 billion for the expansion. The expanded hub will be equipped with an enhanced material handling system; and will be able to handle twice the amount of throughput capacity – from the current 75,000 pieces of shipments per hour to 125,000. The hub will handle six times more in terms of shipment volume than when it was first established in 2004. When handling at full capacity, the annual throughput of the expanded CAH is expected to go up by 50% to 1.06 million tonnes per annum.

Warehouse space was also increased by 50%, to handle a greater number of shipments. These expansion plans are timely and coincide with the completion of the Three-runway System as well as the surge in demand in the Pan-Pearl River Delta (PPRD) region.

Deliver Excellence in a Digital World

As part of Deutsche Post DHL Group’s Strategy 2025, DHL Express is investing €2 billion, implementing a range of smart technologies, such as IoT solutions, predictive analytics, drones and automated transport vehicles. These innovative solutions reduce supply and demand volatility, allow for more informed decisions to be made and offer speedier deliveries to consumers. DHL Express’ Advanced Quality Control Centre (AQCC) monitors flight departure and arrival times, as well as any delays and potential disruptions in real-time. With this, customers can be preempted about any changes to their flight timings immediately.

DHL Express also leverages robotics technology to enhance operational efficiency and to reduce manual tasks. For example, its ‘Follow-me Robot’ at the service centre in Tsing Yi reduces the physical load of staff, reducing costs and increasing productivity.

Partner with DHL Express Hong Kong

Evidently, DHL Express has geared up to handle the rapid increase in e-commerce orders, by future-proofing its processes. With a team of over 111,000 certified specialists operating in over 220 countries worldwide, we ensure you always deliver the best for your customers. Sign up for a DHL Express account today.