Cost cuts vital to the HK economy
Costs have to be brought down if the airport is to continue competing in the long term, a leading player in the logistics industry has warned.
'I love the airport,' said Archie da Silva, managing director of Jet-Speed Air Cargo Forwarders. 'It is an incredibly good airport, and very efficient. But we have one problem - it's too expensive and the government should think of some way to bring down the terminal charges.'
One way of doing this, he said, was to lower the rents paid by the airport's two cargo terminal operators, Hong Kong Air Cargo Terminals and Asia Airfreight Terminal. Another was to extend their franchises from the current 20 years to 30 or even 40 years.
Mr da Silva estimates that charges are 30 per cent to 40 per cent higher than at airports in the Pearl River Delta.
In the past this was not a problem, because these airports lacked Hong Kong's incomparable efficiency and stellar infrastructure. But, as improvements are made at airports on the mainland, Hong Kong will find it increasingly difficult to maintain its edge.
'It will become very difficult to compete with Guangzhou and Shenzhen, where terminal charges are much cheaper,' Mr da Silva said. 'Customers are demanding lower FOB [free on board] charges despite the tremendous efficiency of the airport and its great facilities. Over the next few years we will see an eventual movement of freighter flights to Guangzhou and Shenzhen.'
The trend might already be under way. FedEx, which maintains its Asian hub in the Philippines, is considering Guangzhou and a second airport in the Philippines for a second hub in Asia.
Meanwhile, Shenzhen International Airport and Germany's Lufthansa Cargo have signed an initial agreement to set up a jointly-owned air cargo-handling centre at the airport with an eye to developing it into an international air-cargo hub for the Pearl River Delta.
With 10 freighter services a week to the mainland and four code-share flights with Air China, Lufthansa has announced it was thinking about adding flights to Shenzhen and Guangzhou when cargo capacity at Guangzhou Baiyun International Airport increases. Capacity will rise from 600,000 tonnes to one million tonnes when the facility is completed. To put that in context, Chek Lap Kok's annual cargo capacity is three million tonnes and it can ultimately be expanded to nine million.
'Shenzhen's problem was that they didn't have a proper infrastructure for cargo. But Lufthansa is now investing with Shenzhen authorities for a sophisticated freight terminal. When that happens, freight will start shifting to Shenzhen and Guangzhou.'
The impact on Hong Kong will be profound.
'Production is all being done in Dongguan, which is closer to Guangzhou and Shenzhen. They have only one border crossing while we have a double border crossing,' Mr da Silva said.
