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Company background

Hong Kong Air Cargo Terminals Limited (HACTL) is one of the air cargo terminals in Hong Kong, playing a role as a major airfreight centre. With a 10-year extension handling franchise with the Airport Authority in 2015, HACTL signals long-term commitment and continues to unbiased service with its neutral air cargo terminal operator role at Hong Kong International Airport. This company has been operating since 1976 and welcoming its 41st anniversary year. Its latest initiative is to provide one-stop-shop for different stakeholders including charter, brokers and carriers for the facilitation of the air cargo business.

Visit flow

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The whole company visit had been arranged very smoothly.  What is more, the designed route had covered all the essential parts of the daily operations of the very bustling air cargo business.

First, we are brought to a conference room and videos of HACTL are shown. Then, we knew the background of HACTL. After then, we are brought to the G/F and see how different parts in the company could work together. The guides had then briefed the back storage system(BSS) and container storage system(CSS). After then, they explained very clearly about the handling of cargos, such as the temperature control and maximizing the space use in the plane. We walked through different floors of the building and knew thoroughly about the cargo handling.

For the G/F and 1/F, they are for the convenience of trucks to transmit goods. As for the 3/F -4/F, they are mostly for handling cargos, which means the loading and unloading of goods are all processed there.

All in all, the visit is very fruitful and the guides are nice and caring.

Question & Answer

1. What specific or unique innovative technologies do HACTL incorporate with its cargo terminal operations to sustain the global supply chain with the airline clients? 

For years, HACTL has been re-engineering its internal developed system to allow information sharing. This system is known as Community System for Air Cargo (COSAC). The company is currently using COSAC-Plus, the latest and third generation of the system. COSAC-Plus acts as an Internet platform and plays a role in sharing real-time information of cargo status with numerous stakeholders, including internal staff, airlines, freight forwarders, Hong Kong Airport Authority and Customs.

To sustain business with the airline clients, HACTL provides value-added services to help regular clients save time. For non-regular clients, HACTL will wait for their clients to inform the their cargo arriving timeframe on COSAC-Plus, then assign truck docks and staff to get ready for the upcoming cargo loading operations. However, for regular clients, HACTL retrieves cargo information and reserves specific truck docks and staff before cargos actually arrive. When the cargos come to the terminal in the pre-assigned time slot, truckers can immediately do the cargo collection and build-up operations, hence put them on planes.

2. What measures do HACTL take to ensure workplace safety?

In order to reduce the potential dangers when driving trucks, HACTL has tried hard to help drivers improve driving skills as well as raising workers’ safety awareness. It always regards staff as the most valuable asset. The Gold 13th annual Hong Kong Occupational Safety and Health Award that HACTL earned has proved the company has constructed a safe working environment.

3. What would you consider the building of the third runway as an opportunity or challenge for Hong Kong’s air cargo industry?

There are some opportunities mentioned by the company representative during the visit. As there are some cargoes arriving from passenger planes, HACTL is now using a runway with a tunnel to connect the cargo area and passenger area. The company plans to build another tunnel to link up the passenger area at far end, so as to save truckers’ time to go to ending point of the current tunnel and travel through the whole passenger area to get to the end. The company also plans to join Baltic Air Charter Association (BACA) to explore more business opportunities with carriers and brokers, the development of a third runway fits into the company’s enthusiastic business plan.

4. How does your company Container Storage System(CSS) and Back Storage System(BSS) work to facilitate cargo management?

The 2 system cooperates together and have got different practical functions.For the BSS system, it helps the custom inspection of bulk cargo when required. This system mainly facilitates the general import, export and those of transshipment cargo, which means HACTL replies heavily on the system during daily operations. The system provides accurate storage positions for cargos. What makes it so efficient is that, the system is actually connected to the Customs Examination Hall.

CSS stands for Container Storage System. The system operates on several floors in HACTL to help record all the data of the goods being handled. By then, all the cargos are being handled very efficiently, with the locations of cargos precisely known.

5. Knowing that HACTL also handles special cargos such as livestock and perishable goods, how does your company manage the complexity and optimize capacity?

First, there is temperature control for special cargos and goods. It makes good use of air-conditionings to ensure sensitive goods such as seafood, flowers and fruits are under good condition of storage.

Moreover, perishable goods would undergo a very efficient custom clearance procedure. For example, seafood such as urchin and fish take only 3 to 6 hours from loading off the plane to the plate of customers in a restaurant. Therefore, the freshness of goods could be maintained.

Thirdly, livestock handling centre are set up to ensure the safety when transferring the livestock from one place to another. Combining all these, HACTL has minimized the complexity of handling the goods.

6. Being the largest ground handler at the world’s busiest cargo airport, how will HACTL react to increasing air transportation demand given the shortage of available slots and space constraints at Hong Kong?

HACTL tries hard to maximize the use of space of each cargo and plane. The design of the cargo could best fit in a plane. There are some shapes for the upper deck and lower deck respectively. According to such arrangement, the amount of cargo to be put in a place would be the maximum.

7. What are HACTL’s biggest competitive advantages over Cathay Pacific Cargo?

HACTL has a much broader scope and number of service partners than Cathay Pacific Cargo. Stated in the company’s promotion video and newsletter, HACTL has been operating since 1976, serving more than 100 airline customers for 40 years. There are about 40 freight parking lots in Hong Kong, and HACTL is currently serving about 30 of them. Service ranges from dealing with cargoes like flowers, fruit and seafood that are easily perishable, to cargoes like pharmaceutical and ice-cream that need to be taken care of with strict temperature control. In 2013, HACTL even handled the largest ever horse shipment. The 3rd and 4th floor have air-conditioning to make sure cargoes are stored within customer’s’ temperature sets. Moreover, the 2nd floor is divided into three areas with different temperature ranges. All these are to allow broader scope of cargoes to be managed in HACTL.

8. With the third runway coming up, are there any strategies or expansions to cope with the increased cargo movement?

The information required to answer this question is not covered in the visit.

9.How does COSAC-Plus system help to increase the tracking efficiency?

COSAC-Plus provides a platform that allows facilitation of cargo loading operations. It supports two automated container systems – BSS (Box Storage System) and CSS (Container Storage System). During the visit, the company representative explained how BSS is used in actual operations. Bulk cargos are stored in company’s yellow boxes, which have their unique identification number and barcodes. When staff break down the cargoes, they will use hand-held devices to get real time information and recall specific cargoes from their boxes. Without any manual tracking that consumes much time, staff can simply ask the system to load cargoes for them. Within a short period of time, they can get a location generated by the system at the two sides of the automated systems. As COSAC-Plus is an Internet platform, real-time cargo status can also be shared to different stakeholders, including internal staff, airline staff, truckers and customs.

10. How does HACTL apply EDI to support B2B communication and enhance the services’ efficiency and effectiveness?

With Electronic Data Interchange (EDI), HACTL can get a quicker cargo access from customs by facilitating clearance operations. Although Hong Kong is a free port, customs still need to control the cargo inflows and outflows, and has the right to do examinations through random checking. When customs decide to perform clearance operations, terminal companies have to provide cargo information, including shipment numbers, airway bills, etc. There are two ways for customs to get needed information. First option is to wait for truckers to come and do examinations in front of the shipments’ owners. Second option is to ask teminal companies to deliver cargoes to customs’ checkpoint before customers arrive to pick up the cargos. HACTL applies EDI to speed up clearance operations. By not relying on hard copies of airway bills, the company needs not to wait for documents that are needed to be delivered to customs. Instead, as all information are stored and shared on the Internet, both the company and customs have the required documents before the arrival of cargoes. When cargoes are departed from outports, HACTL gets the cargo information and share them with customs. Customs will then decide whether to do customs check or not. If yes, HACTL will follow the second option (mentioned above). If no, customs will give notice through the system and HACTL can release cargoes to truckers upon cargoes’ arrival.

Learning Reflection 

The success of HACTL has aroused our curiosity towards the cargo terminals in other cities. Although HKIA is the world’s busiest cargo gateway, still, in terms of container ports in the world, Hong Kong is ranked the 5th in 2016. The ports in Shanghai, Singapore, Shenzhen and Ningbo are ranked higher than HK.

We then know that, the development of HK’s sea and air cargo industry is actually being affected by a mix of factor: policy, law, environment and economic. Since the custom procedures has been simplified recently, and due to the development of infrastructures, the put through rates in cities in China has been increased sharply.

For Singapore, although it is also a small port, since innovation in processes and technology is encouraged, in addition to the great connectivity built, these has made Singapore stand out.

In the future, in order to maintain the competitiveness, HK has to keep growing technologies and automation systems to facilitate the development of the logistic industry.
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