Transport and logistics

Hong Kong retains air cargo advantages but squeeze is on, says UPS

Package-delivery company now has more flights using Shenzhen

PUBLISHED : Sunday, 10 April, 2016, 3:53pm
UPDATED : Wednesday, 13 April, 2016, 9:26am

UPS, the world’s largest package-delivery company, says Hong Kong remains very competitive when it comes to air cargo, but it is finding it hard to add flights here due to runway saturation and now has more flights to and from Shenzhen.

“Hong Kong’s air transportation is still one of the most efficient in the world,” the company’s managing director for Hong Kong and Macau, Steven Wong, said last week. “Many of our South China clients choose to ship their goods from Hong Kong instead of Shenzhen.”

Wong said Hong Kong’s free port position gave it great advantages in more efficient inspections and faster customs clearance as well as a more extensive global route network.

Many of our South China clients choose to ship their goods from Hong Kong instead of Shenzhen
Steven Wong, UPS

“A parcel picked up at Hong Kong Island at 4pm could be handed to the customer in the US and Europe the next morning,” Wong said.

But Hong Kong faces a growing challenge from Shenzhen, which replaced Hong Kong as the world’s third-busiest container port in 2013.

Wong said Hong Kong’s air transportation was still ahead of Shanghai or Shenzhen, but it was hard to increase flights to and from the city as “airport space is very tight”.

UPS has about 60 flights taking off or landing in Hong Kong every week, compared with more than 80 using Shenzhen.

And space concerns extend beyond the airport.

To cater to the growing demand for online shopping, UPS has installed lockers in office buildings, convenience stores in other markets so that packages can be dropped off or picked up at any time.

Wong said it had studied bringing such services to Hong Kong, but had found it was almost impossible as options such as convenience stores were too small to accommodate lockers.

But he said UPS’s Hong Kong business was set to benefit from Shenzhen’s dramatic development as a hi-tech hub.

“We have seen a quick growth of consumer electronics customers based in Shenzhen, such as drone and hi-tech glass makers,” he said.

UPS’s Hong Kong business had grown faster in the first quarter of this year than in the fourth quarter of last year, he said, with hi-tech and e-commerce companies making a significant contribution to growth.