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Joon San

Wong Joon San

Logistics activity is gathering speed at Sun Hung Kai Properties' Airport Freight Forwarding Centre (AFFC), judging by the number of inquiries directed at the management from existing and potential tenants.

According to AFFC general manager Ricky Leung, SHKP subsidiary ESCM (E-Supply Chain Management) and TNT Express Worldwide were among those expanding their operations at AFFC.

Nippon Express (HK) has doubled its capacity at AFFC recently to meet rising demand for pick- up and delivery services.

According to the company's Air Cargo branch general manager, Shinkichi Koike, the company had doubled its capacity at AFFC to 72,000 square feet.

'Our customers not only need  freight forwarding but also pick- up and delivery,' he said.

Nippon Express keeps the inventory for its clients and supplies the parts to their customers as they need them.

Mr Koike said the AFFC facility is for small volume customers, while those dealing in larger volume are served at its Kwai Chung facility where supply chain management and logistics services are provided.

Mr Leung said AFFC is also studying ways to speed up delivery, documentation and customs clearing procedures, and  is holding discussions with Hong Kong Air Cargo Terminals and Asia Airfreight Terminals.

He said AFFC's biggest advantage is the speed of turnaround time for logistics providers to Hong Kong International Airport's two air cargo terminals, compared with other off-airport site facilities.

AFFC serves the newly established Marine Cargo Terminal, operated by Chu Kong Air-Sea Union Transportation Co Ltd (CKSA), a joint venture between Chu Kong Shipping and Hactl's subsidiary Hacis.

AFFC is not an ordinary warehouse, as it is equipped with top- end communications hardware and IT facilities, enabling tenants to move into the e-logistics business, Mr Leung said.

'We are working to provide tenants with entire supply chain management requirements,' he said.

'These include third party logistics, inventory control, distribution planning, manufacturing logistics services, customisation and pick and pack services.'

Mr Leung said the ability to provide tenants with efficient ser vices set the company apart from other warehouse operators. AFFC provides tenants with a platform for conducting a supply chain management business.

Customers also have the option of having ESCM as their 3PL (third party logistics) providers at the site to lower their operation costs.

Mr Leung said the Hong Kong air cargo industry is experiencing some downturn, partly due to the sluggish US economy.

'However, things will get better in the second half of the year,' he said. The company is optimistic  conditions will improve once China enters the World Trade Organisation.

'We estimate cargo throughput to AFFC this year will remain at 400,000 to 500,000 tonnes,' he said.

Asked whether the increase in supply chain management and logistics activities would have an impact on AFFC's cargo throughout, Mr Leung said it could go either way.

'We strongly believe that if Hong Kong wants to maintain its competitive edge, the territory must go for top-end high value production,' he said.

This product segment requires better warehousing facilities: direct ramp access, private loading bays, high ceiling warehouses, a tight surveillance system, and good floor loading.

If companies realise AFFC possess all these elements, including its strategic location at the airport, then AFFC's throughput volume will increase.

Mr Leung said AFFC, which still had spare capacity, would provide tenants with whatever they could to meet their logistics requirements.



Turnaround time, top-end hardware set firm apart