Hactl's Wilson Kwong: Recognising the power of people
31 / 07 / 2018
The people side of the air cargo industry is one that is often overlooked, but the subject is growing in importance as reports suggest that the sector could be facing a shortage of workers.
One company that says it has always taken employee engagement seriously is Hong Kong Air Cargo Terminals Ltd (Hactl). Chief executive Wilson Kwong tells Air Cargo News that since he took the reigns at the cargo handler in March, one of his most enjoyable moments — alongside winning new customers — has been handing out awards to 180 employees who have worked for the company for a significant period such as 20, 25 or 30 years.
“Giving the awards was one of my proudest moments,” says Kwong. “Of course winning new customers is important, talking to the authorities is important, but nothing pleases me more than talking to our colleagues on the front line, making sure that they get recognised.”
The pursuit of happiness
The need to keep employees happy has a particular significance for Hactl, as well as other companies based at Hong Kong International Airport (HKIA), because of the employment situation in the Chinese special administrative region.
Hong Kong’s unemployment rate currently stands at 2.8%, and with a long commute out to the airport and the need to work in all weather conditions, staff retention is important as it can be hard to find replacements.
Hactl boasts that it is the only handler at the airport that is run entirely with salaried staff and without the need for agency workers.
The company also takes staff development seriously and late last year introduced virtual reality (VR) training so new staff can gain experience before working in the challenging ramp environment.
The training makes use of the handler’s COSAC management system and provides users with an interactive, fully immersive, 360 degree, four-dimensional experience.
Hactl expects COSAC-VR to speed up the learning process, enable trainees to experience a wider variety of scenarios such as handling odd-sized cargo pallets and special loads, and enhance safety awareness.
The company boasts an entire floor dedicated to training, which is also an IATA dangerous goods regulation accredited centre.
Meanwhile, staff members, auditors and supervisors can check what training employees have completed through a mobile app, which also details the lunch menu for the day, health and safety updates, recognition of achievements, rosters, the Hactl staff magazine, payslips as well as a host of other features.
While giving out the awards has been a highlight for Kwong, his start at the company has also been “tinged with sadness”.
Shortly after joining the handler, the previous chief executive, Mark Whitehead, who had been kept on in an advisory position, unexpectedly passed away.
Kwong had worked with Whitehead before: Hactl is 41.7% owned by conglomerate Jardine Matheson Holdings, where executives regularly move around.
Kwong joined Jardines in 1998 from university and has worked in various areas of the company: business development, IT, mergers and acquisitions, passenger services, airport services, real estate, project development, mechanical engineering and as executive assistant to the managing director.
He worked with Whitehead during his time at Jardine’s real estate business, Hong Kong Land.
“I must say Hactl is a very well run company and credit is due to Mark, someone for whom I have a lot of respect,” says Kwong.
“When I first knew I was coming to Hactl, I was very excited to be taking up the portfolio that Mark had run very successfully over the past eight years.
“The plan was that he and I would work alongside each other, with him as an advisor. I was particularly sad when he passed away. I must say, the start of my stint at Hactl has been a little bit of a traumatic one with Mark’s passing.”
Kwong says one of the company’s strengths has been its commitment to “innovation, digitalisation and staying relevant and ahead of the game”.
“We are here to satisfy the shareholders, but we are also very committed to making sure that our customers — the airlines, the freight forwarding community, the shippers — are all being looked after, as well as our 2,400 colleagues.
“There are lots of opportunities for us to move ahead and we have exciting challenges ahead,” he says.
Kwong identifies three particular challenges facing the company: the development of a third runway at HKIA, the emergence of e-commerce and the integration of Hong Kong into the Greater Bay Area.
The three runway system, which will launch in 2024, will increase HKIA’s cargo capacity from around 5m tonnes each year to 9m tonnes.
Kwong says that Hactl has the space and capability to be able to handle the extra demand that should come as a result of the new runway.
The handler’s Super Terminal 1 (ST1) facility handled 1.8m tonnes in 2017 and has a total capacity of 3.5m tonnes.
Part of the reason for the spare capacity is Cathay Pacific’s 2013 decision to withdraw its volumes — at the time around 1.3m tonnes — to move into its own facility.
Last year saw another big customer, Hong Kong Airlines, move to Asia Airfreight Terminal (AAT) after the airline took a 35% stake in the handler.
“The capacity availability exists at Hactl,” says Kwong. “But I look at that quite positively because it gives us a lot of time and space to invest and modernise and to better fit future operations.
“Whilst ST1 was built 20 years ago with the future of air cargo in mind, there is always room for improvement and that is exactly what we have been doing — we have been investing in it, whether it is on the system side, the facility side, or the people side.
“On these three key aspects we have been putting in a lot of effort. One key example I can give is that we have two main systems — the Box Storage System and the Container Storage System — and these are run by the Logistics Control System.
“This year we actually are upgrading it to better fit our operations and make them even more efficient.
“We are also looking at all kinds of automation and we are looking to see how we can fit the e-commerce trade better because the size of the goods they carry, and the number of goods they carry, are slightly different from traditional volumes.
“All in all, from now until the opening of the third runway, you will see a lot of investment going into ST1.”
Kwong points out that Hactl has a performance enhancement team, whose sole job it is to look at ways to make operations more efficient through process or technological innovation.
It also has an information service department of 110 people, which develops new software for the company.
On the topic of e-commerce, there is one recent development that certainly does present an opportunity for Hactl as it looks to build on the business it handles for Hong Kong Post, amongst others.
In June, Airport Authority Hong Kong awarded a tender to develop and manage a premium logistics centre to a joint venture led by Cainiao Network, the logistics arm of Alibaba Group.
Other shareholders include China National Aviation Corporation and parcel airline YTO Express.
The centre, at Kwo Lo Wan in the South Cargo Precinct of the airport, will be able to handle around 1.7m tonnes of cargo per year, have a footprint of about 5.3 ha and an estimated gross floor area of 380,000 sq m, making it the third largest warehouse in Hong Kong.
Under the agreement, the joint venture will design, construct, finance and manage the centre but, with no airside access, there will be a need for a cargo handler.
Nothing has been decided yet, but Kwong is hopeful that Hactl will be able to play a role.
Says Kwong: “Alibaba wants to be able to deliver to anywhere in the world in 72 hours. Our role as a cargo handler is to see how we can be part of that process and how we can help them to fast track on that delivery target.
“Hong Kong is already a very efficient port, but we are not satisfied, we want to do better, and that is why we will be looking into what sort of adjustment or investments are necessary in order to do that.”
One factor that may be in Hactl’s favour is that China National Aviation Corporation is a 16.7% shareholder in the ground handler, while YTO Express is already a customer.
“A lot of things are still on the drawing board but watch this space. I do expect that there will be some developments,” Kwong says.
Shorter transport times
The final opportunity outlined by Kwong is the development of the Greater Bay Area, a government project which seeks to bring together Hong Kong, Macau and nine cities in the Guangdong province.
Part of the project is the development of the Hong Kong-Zhuai-Macau Bridge (HZMB), which should open later this year.
The bridge will shorten transport time between Hong Kong airport and the western Pearl River Delta (PRD) by around two-thirds to 30-40 minutes.
“Once the bridge is operational we will then draw a lot of goods from the western side of the PRD through the bridge into Hong Kong. Hactl, just like Hong Kong airport, will then benefit,” explains Kwong.
The company has already made some moves to prepare for the opening of the bridge — its Hacis road feeder subsidiary has announced it will partner with Chu Kong Shipping (CKS) to develop a new inland cargo depot in the Zhuhai Free Trade Zone.
The depot will serve both Macau and Zhuhai and will bring the number of Hacis depots in the south of mainland China to nine.
All Hacis depots are linked to the airport through scheduled express road feeder services.
The western PRD region is home to many electronics manufacturers and technology companies but several of these are heavy users of ocean, rather than airfreight shipping services.
Hacis and CKS are seeking to convert many of them to airfreight, piggybacking on the HZMB by enabling a faster and more cost-effective connection to HKIA.
No sign of a slowdown
Moving onto the current air cargo market, Kwong says that so far there is no sign of a slowdown in demand, despite fears of rising protectionist measures being implemented by various governments.
He points out that Hactl’s year-on-year comparisons are affected by the loss of Hong Kong Airlines. However, it has recently won contracts with Air Belgium, Western Global and YTO, as well as seeing the return of previous customer Eva Air.
On a 12-month rolling basis demand is up by around 1%, while if all new carriers and airlines that have moved on are stripped out, growth stands at around 4%.
This final figure is roughly in line with HKIA, which during the first five months has seen cargo demand increase by 4.1% year on year to 2m tonnes.
“I am quite positive for this year,” says Kwong, “Although I do worry a little bit about a potential trade war.
“In university I studied economics and in economics everyone says that trade wars are not beneficial to anyone. It is a lose-lose game,” he concludes.