Technology holds the key to keep cargo moving

PUBLISHED : Friday, 05 July, 2002, 12:00am
UPDATED : Friday, 05 July, 2002, 12:00am

The impact of new technology on the dynamics of the air cargo industry will be the topic most on the minds of attendees at this year's International Air Cargo Forum and Exhibition, according to conference organisers.

Up to 1,000 delegates and 3,000 visitors are expected to attend the three-day event to be held at the Hong Kong Convention and Exhibition Centre in Wan Chai from September 17 to 20.

Speakers include an A-list of 40 prominent industry figures from around the world.

The impact of technology has a special significance for Hong Kong's domestic air freight industries, which are facing stiff competition from low-cost airport handling facilities across the border, says Hans Bakker, the Airport Authority's commercial director. The only way to compete, he says, is to use technology to improve service and cut costs.

'We have to win on efficiency,' Mr Bakker says. 'If we can improve our efficiency, then on the transaction basis we are cheaper than surrounding countries.'

Although all shippers are sensitive to price, the primary consideration for those using express air cargo services is the timely delivery of packages. Much of the demand in the sector is driven by shorter product-development cycles, spare-parts replacement, and the general trend towards minimal business inventory and just-in-time manufacturing models.

About 99 per cent of cargo shipped out of Hong Kong moves via ships on container transport. Only 1 per cent of cargo travels by air freight. But this category accounts for 27 per cent of the value of all cargo moves.

The express cargo sector is the fastest growing of all cargo categories, up 9 per cent last year, despite a 7.4 per cent decline in overall air cargo. In the first five months of this year, the express sector has grown 20 per cent, a growth rate averaging 1.5 times that of the general air cargo sector. Express cargo is generally defined as door-to-door shipments with the modality of air transport.

'Six or seven years ago nobody expected this little sector [express air cargo] to grow faster than the industry norm,' Mr Bakker says.

At present, Hong Kong ranks as the largest cargo hub in Asia, but its position as a strategic entrepot to China is under threat.

Mr Bakker says Hong Kong has a superior network and has maintained the edge, but it will have to adapt new technology, such as electronic billing. Regulatory changes, such as a 24-hour mainland border access, are essential to improve service to the key manufacturing centres.

'What we really want is to position ourselves as a logistics gateway to China, especially for high-value goods,' Mr Bakker says, 'We have the right balance with all the infrastructure.'

The conference is crucial to fostering dialogue among domestic industry stakeholders, and building consensus on establishing new standards.

'The key words are 'willingness to change',' Mr Bakker says.

Discussion forums will look at a range of industry issues. These include growth patterns, operational safety, technological advancements in equipment and facilities, political developments, and trends in world trade.

The International Air Cargo Association, the conference organiser, is recognised as the only world trade organisation representing the air cargo and express industry worldwide. It regularly acts as a catalyst and advocate in the air logistics industry.

Mr Bakker says a must at the conference is a presentation by FedEx chief executive Frederick Smith. The US executive is expected to offer hints on how to get the best efficiencies out of the express cargo industry.