Hong Kong targets high value cargo and e-commerce opportunities in ‘Airport City’ strategy

Hong Kong International Airport (HKIA) has identified three strategic areas for future development: capturing cross-boundary e-commerce opportunities, targeting high-end, high-value cargo, and enhancing cargo services for the region.

The plans are revealed in the airport authority’s “From City Airport to Airport City” report released today, which outlines “an ongoing transformation that integrates the airport with many functions surrounding it, turning it into a much bigger entity – an Airport City – that drives the economic growth of Hong Kong and the region, while further strengthening HKIA’s status as an international aviation hub”.

HKIA was ranked the world’s busiest cargo airport by Airports Council International in 2018, occupying the top spot for the ninth consecutive year, and the strategy aims to secure this leading position, says the authority.

“Our strategy of focusing on the high-growth areas of e-commerce and high-value cargo is a direct response to changing trends in global trade.”

It adds that e-commerce’s demand for timely delivery to consumers in different parts of the world can be met through HKIA’s extensive air network of 220 destinations worldwide, many of which are also hubs in their own or major cities served by frequent flights.

The airport authority notes that the rise of e-commerce coincides with the increasing demand for high-value goods, most notably in Asia. It lists electronic goods, fresh or perishable produce, and pharmaceuticals as falling into this broad category of high-value goods that are best served by air cargo.

“Increasingly, airlines are using the bellies of passenger planes to deliver the orders – many are small parcels of high value – in a timely manner, taking advantage of the frequency of passenger flights.”

Air cargo also plays a pivotal role in the supply chains for the manufacture of high-end products, which rely on increasingly globalised and specialised division of labour. “The manufacturing of a premium consumer electronic device, for instance, requires the supply of numerous parts made in a large number of locations spread across different continents.”

HKIA has previously announced plans to expand express and airmail facilities and the development of a premium logistics centre has already begun. Covering 5.3 hectares, with an expected gross floor area of 380,000 sq m, and designed to serve e-commerce, temperature-controlled airfreight and transhipment, the centre is due to open in 2023.

In March, HKIA obtained CEIV Fresh (IATA’s certification for perishable logistics) in addition to its CEIV Pharma certification for pharmaceutical products. The airport plans to foster closer collaboration with other major pharma hubs to develop a ‘Cold-Chain Corridor’ providing an end-to-end solution for temperature-controlled cargo.

The third focus of the strategy – enhancing cargo services for the region – includes studying the feasibility of building an intermodal air cargo handling facility at the new airside Eastern Support Area of the Three-Runway System to support land-sea and sea-air transhipment.

The Airport City report calls for the infrastructural and functional enhancements as well as “a flexible planning approach which allows the airport to be more responsive to market changes and trends, which in many ways are driven by new technology”.

The AA’s Airport City vision echoes the Outline Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) which has designated Hong Kong as the region’s international aviation hub, and is also in line with the Hong Kong Government’s Lantau Tomorrow Vision which aims to reinforce Lantau’s role as a ‘Double Gateway’ to the world and the GBA.