The huge reduction in passenger flights to the mainland is putting cargo space at a premium, with freighter services unavailable to most cities. Some international shipments are being delayed by a day at Chek Lap Kok airport before being forwarded to mainland destinations and freight rates have increased by more than 10 per cent on some routes, according to a forwarder. Capacity was slashed last month by regional carriers after the Sars outbreak saw businesses and tourists shelving travel plans. 'The impact [on cargo flow] of the reduction in capacity is starting to emerge,' said Kelvin Leung Kai-yuen, the managing director (Hong Kong, Macau and South China) for DHL Danzas Air and Ocean. 'Transit times have increased for some short-haul destinations, especially those with no additional freighter services, such as to mainland cities.' Hong Kong Dragon Airlines, which relies heavily on regional operations for revenue, has slashed capacity by more than 50 per cent in the past month. It will operate three flights a day to Beijing this month, instead of four, and services to Shanghai have been cut by half to six flights a day. Mainland carriers have also reduced capacity. China Eastern Airlines said it had cut 30 per cent of its flights on Hong Kong and Japan routes. Hong Kong Shippers' Council executive director Sunny Ho Lap-kee said additional freighter services were not available to China because of the regulatory challenges to starting a new service. 'There is no additional service in China. If you want to operate a charter flight, you have to go through a lot of procedures, such as finding an agent to negotiate with the authorities,' Mr Ho said. More than 70 per cent of Hong Kong's imports are shipped to the mainland, according to an executive at Hongkong Air Cargo Terminals Ltd (Hactl), which handles 80 per cent of air cargo in Hong Kong. Hactl handled more than 182,000 tonnes of imports in the first quarter, or more than 1,500 tonnes to mainland destinations every day. That volume would require at least 15 B747 freighters, the largest carriers used by airlines, to move the cargo each day. Summit Chan, Hactl's marketing director, said there were some delays at Chek Lap Kok but no major disruptions. Preliminary figures showed cargo volume had dropped last month, Mr Chan said. 'The capacity was already tight in mainland routes before the reduction of passenger flights, as China cargo has always been shipped by narrow-body passenger aircraft,' he said. 'But the cargo volume is decreasing. In the week from April 21 to 27, volume dropped 7.5 per cent year on year because of the cancellations of trade fairs and plant visits.' Mr Chan said some shippers and forwarders had used road transport to move their goods to airports in Shenzhen and Guangzhou and send them out through domestic networks. 'It was demand [not a lack of capacity] which affected the cargo throughput. People can always find ways to send out their goods, although mainland airports are also suffering from capacity cuts,' he said. However, the capacity shortage is more likely to affect the smaller companies rather than big shippers which can leverage the volumes they move. A local executive for multinational Philips said the electronics manufacturer did not experience capacity shortages and ruled out an increase in freight rates as the company had signed service contracts with airlines earlier this year. 'I guess small shippers are facing more pressure,' he said. The Civil Aviation Department said no carriers had applied to raise their rates.
