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Bax Global, a US$1.8 billion global transport and supply-chain management company, has boosted its capacity at Hong Kong's Airport Freight Forwarding Centre (AFFC) by more than 66 per cent.

The company, which was leasing 30,000 square feet of space, has lifted its capacity to 50,000 sq ft to meet rising demand.

'We are taking up more space as we believe we will have stable growth,' Bax Global operations director Thomas Ho said.

He said the company, which recorded good results in the first half this year, also expected strong second-half results.

The company, which has its headquarters in Irvine, California, operates more than 500 offices in 121 countries around the world and has more than 7,600 employees. It offers multimodal freight forwarding to business-to-business shippers worldwide.

Bax Global has a 163,000 sq ft warehouse in Yau Tong, four sites covering 384,000 sq ft in Singapore and a 90,000 sq ft site in Xiamen.

Many of the world's largest companies use the company to manage their supply chain. It specialises in managing the movement of heavyweight cargo of all shapes and sizes.

It also offers specialised services for the aerospace, automotive, trade fair and exhibit, fashion, electronics and health care industries.

Bax Global handles 3,000 tonnes of export cargo monthly in Hong Kong, with import tonnage of about half that.

Last year, 70 per cent of exports were for the US market, while the rest went to Europe and Asia.

'This year, Bax Global is hoping to build up its European traffic, especially to Germany,' Mr Ho said.

According to Bax Global managing director William Tang, the Hong Kong Government must help the SAR air-freight industry or risk seeing firms relocate to free ports such as Singapore, as Hong Kong's operating costs continue to rise.

'In Singapore, the government provides land and also builds logistics centres to assist and encourage the industry,' he said.

But in Hong Kong, factors such as high rentals, high salaries, high operating costs and difficulties in getting experienced staff were making it difficult for companies to compete.

Mr Tang said firms had to monitor the Hong Kong property scene as an improved market meant salaries would rise, putting pressure on operating costs.

'If costs became too high [in Hong Kong], firms might as well go to Singapore as it is also a free port,' he said.

Asked about developments in the air-cargo business, Mr Tang said airlines had imposed 30 per cent to 40 per cent rises in freight rates from July this year, with charges of up to HK$30 per kilogram. They had lifted rates to meet high fuel costs and to offset the cost of flying partially loaded aircraft into Hong Kong due to weak imports.

Mr Tang said the rate rises, which were quite hefty, had come much too early this year, unlike previous years.

Bax operates its own North American aircraft fleet from a 279,000 sq ft facility in Toledo, Ohio. The company uses DC-8 and B727 cargo jets to reach business centres in the US, Canada and Mexico.

Internationally, Bax has one of the largest service networks in the industry.

The company offers expedited and standard air freight, ocean forwarding, customs brokerage, documentation and banking services.

Its Argus global communication and information-management system allows BAX offices and agents to keep in contact, and monitor shipments.



Supply-chain management firm backs growth by lifting capacity