Hong Kong International Airport has once again topped the list of China’s top 10 airports in terms of cargo throughput volume for 2014.

Hong Kong achieved a total throughout of approximately 4.38 million tonnes in 2014, a growth of 6% compared to 2013. This was the fifth year in a row in which Hong Kong was not only the busiest cargo airport in China, but also the world.

With four cargo terminals and more than 40 parking stands for cargo aircraft, Hong Kong is capable of handling 7.4 million tonnes per year. But the airport isn’t resting on its laurels.

“To maintain competitiveness and strengthen our leading position as an international and regional aviation centre, it is crucial for HKIA to continue to invest in infrastructure to expand its handling capacity,” says a spokesperson for the Airport Authority of Hong Kong. “Twenty eight new parking stands at the western side of the apron have recently been added, along with a new tunnel under the south runway connecting to the existing cargo terminals.”

Since its opening in 1998, traffic growth has grown by nearly 170%, according to the spokesperson. “Due to the faster-than-expected growth, the airport’s capacity is expected to be saturated between 2016 and 2017, one to three years earlier than forecast.”

The authority has been planning a third runway for years to meet the airport’s increasing long-term air traffic demands. The government has now given its approval for the project and, by 2030, the airport will be able to handle the IATA estimate of 8.9 million tonnes of cargo and 607,000 flight movements.

But the runway isn’t expected to be completed until at least 2023, according to the authority. This will inevitably affect airlines such as Hong Kong-based Cathay Pacific.

“The limited availability of additional slots will impact CX Cargo’s ability to mount additional freighter frequencies,” says James Woodrow, director of cargo at Cathay. “Having said that, CX already has an extensive passenger and freighter network that services all key markets. We will continue to look to add frequencies where the necessary demand is there and we can get the slots.”

Second on the list was Shanghai Pudong International Airport, whose throughput grew 8.6% to about 3.18 million tonnes. Almost 90% of the freight was international, making this the most important international air cargo hub in China.

“Approximately US$300 billion worth of goods move through the airport every year, including electronics, automobiles, textiles, pharmaceuticals, foods and other high-value products,” says Chen Hua, general manager of the Aviation Logistics Development Company at the Shanghai Airport Authority. “We serve more than 90 airlines flying to 250 destinations around the world. Of these, 39 are all-cargo airlines, with more than 800 flights a week to 98 destinations.”

The airport is looking for new ways to improve and innovate. Chen says that a logistics communications platform based on data and statistics is being planned, which will make air freight more transparent.

This is part of an initiative to computerize much of the air freight process. “In March 2015, we signed a proposal agreement with IATA, Shanghai Customs, the Inspection and Quarantine Bureau, China Eastern Airlines and the e-customs department to promote the digitalization of air freight,” says Chen. “By minimizing or even eliminating the use of paper, we can be more efficient and provide a better customer experience.”

In terms of infrastructure, Pudong has 58 freighter parking stands and the largest single cargo terminal in Asia. The airport, which was the first in Asia to have a dedicated freighter runway, also commenced operations on its fourth runway at the end of March 2015.

An extensive network of freight sources is what makes Pudong stand out from other airports in mainland China, according to Chen. “UPS and DHL have both built their own terminals here at Pudong, and FedEx’s international terminal is due for completion in 2017,” he says. “The fact that these three international integrators are investing to make Pudong their Asia-Pacific hub helps to strengthen our position in the region and benefits Shanghai’s competitiveness as a city.”

In order to address the issue of manufacturing gradually moving westwards, Chen says the airport’s strategy is to implement a hub for the wider Yangtze Delta area. “Pudong will take advantage of its dense route network to build a comprehensive air-to-air, air-to-ground, online and offline, international and domestic freight network. We’ll expand and improve our infrastructure, upgrade our IT systems and make our regional functions more complete in order to connect with the free-trade zone,” he says. “By launching a consolidated air cargo transit business, Pudong International Airport has not only raised its international transit efficiency, but also lowered its operational costs.”

With a total throughput of just under 1.85 million tonnes, Beijing’s Capital International Airport maintained its position of third in the country.

According to Meng Xian Wei, general manager of the aviation business department at Beijing Capital International Airport Company Limited, cargo growth was slower than passenger growth in 2014.

“We realize the issues that this will bring,” says Meng. “So we have been looking at opportunities to develop our air freight business.”

To develop the potential of air cargo, the airport has already completed several tasks. In 2014, a logistics development leadership group was formed to complete the overall planning for the airport. In December 2014, the airport signed a strategic partnership agreement with SF Express. In the same month, the airport was also granted certification from IATA for its e-freight operations.

Ongoing projects include the continuing implementation of the partnership with SF Express to grow the airport’s express catchment area, the planning and construction of a freighter apron on the western side of the airport’s south warehouse area, and further collaboration with airport customs.

“We have a long road ahead of us,” says Meng. “Firstly, we need to raise the quality of service and efficiency on the ground. There are currently only two ground service companies at Beijing. The lack of competition has caused a decline in efficiency and quality, which is one of the major reasons for the loss of business. Also, there is still room for improvement in the policy planning environment of the city of Beijing as a whole.”

Meng says that the airport regularly participates in the Airline Operators Committee to gain feedback from airlines so that it can improve. Additionally, it is working closely with customs departments to gain the support from government bodies so that trade can be made more convenient.

Meng adds that he thinks Chinese airports overall will maintain a steady rate of growth this year, although Beijing Capital Airport’s throughput is only expected to grow to a small degree.

Shenzhen Bao’an International Airport ranked fifth on the list. In 2014, it handled 964,000 tonnes of freight, which was a 5.5% growth. Express freight accounted for more than half of that, while 418,000 tonnes were carried by freighter aircraft.

Taiwan has been a major source of growth for the airport. In January 2015, SF Express launched a five-weekly freighter service from Shenzhen to Taipei, and China Airlines Cargo launched a B747F flight between the two cities in late March 2015. EVA Air Cargo is also planning its own freighter service to Shenzhen, according to a senior executive of the Shenzhen Airport Group.

The airport has been so successful that SF Express has decided to set up its hub here, investing in the construction of a transshipment centre which occupies an area of 73,000 square metres. The centre is expected to start operations later this year.

The executive says that Shenzhen Airport has a geographical advantage in that it is located near the Qianhai Free Trade Zone, which means that it can take advantage of the city’s rapid development of cross-border e-commerce. “Qianhai aims to attract high-end logistics companies, which will also help drive the airport’s growth,” says the executive. “In the future, Shenzhen Airport will form a multi-dimensional cross-border e-commerce business unit and this will become our main foundation for international air freight.”

The performance of Zhengzhou’s Xinzheng International Airport in Henan province was particularly noteworthy. While it didn’t make the top 10 in 2013, it jumped four places in 2014 to ninth, with a throughput of approximately 370,000 tonnes – a growth of 45%. Of the total throughput, about 206,000 tonnes were international, an increase of 83%. The volume of freight carried by freighter aircraft was 257,000 tonnes, a year-on-year growth of 81%. Overall, the growth at Zhengzhou was the highest among the country’s large airports.

Contributing to the impressive growth was the launch by Cargolux of a twice-weekly non-stop flight to Luxembourg with a Boeing 747-8 Freighter in June 2014. The service was ramped up to five times a week by the end of 2014, and has now grown to seven per week.

“Zhengzhou is in the ‘centre’ of China and is within close proximity to many major cities in the country,” says Kevin Shek, vice president and head of Asia and Pacific at Cargolux. “Furthermore, CGO is well known by our customers and therefore, ever since our launch into Zhengzhou, more and more customers are looking into this option, trucking cargo from surrounding cities into CGO to catch our flights.”

The development of Zhengzhou as a Cargolux hub is in line with a new strategy following the acquisition in April 2014 of a 35% holding in the airline by the Henan Civil Aviation and Investment Company.

More recently, in April 2015, Cargolux began a twice-weekly trans-Pacific flight between Zhengzhou and Chicago with a 747-8F, bringing the total number of freighter routes at Zhengzhou to 32.

“Customers, including both freight forwarders and shippers, are very satisfied with our direct flight service, as well as our on-forwarding trucking service to destinations beyond ORD,” says Shek. “With this LUX-CGO-ORD-CGO-LUX service, Cargolux is the first fifth-freedom right operator of this international freight route, which links Europe, China and US sectors.”

Kong Shu Xia, spokeswoman for the board of directors at Henan Airport Group, says that the airport will continue to attract cargo airlines, and to push current airline customers to boost their current routes and open new ones.

“Our strategy is to focus on freight more than passengers, and on international flights more than domestic ones,” says Kong. “In terms of network, we’re going to construct a hub at Zhengzhou by opening Africa, developing the US, stabilizing Europe and linking Asia. Because of Zhengzhou’s excellent location, 90% of China’s major economic centres can be accessed by road within 24 hours.”

As part of the expansion of Zhengzhou Airport, the second phase of construction is due to be completed at the end of 2015, according to Kong. “The work is aimed at handling 29 million passengers, 500,000 tonnes of freight and 236,000 aircraft movements annually by 2020,” she says. “There will be a new set of taxiways and a second runway which will be 3,600 metres long and 60 metres wide – raising the airport to category 4F. There will also be a new 45,000-square metre cargo terminal together with supporting facilities, which will make us a modern transfer hub with seamless connections.”

One underlying factor which may be playing a part in all of China’s major international airports is the improvement in the balance between eastbound and westbound cargo.

“Improved load factors back into Asia is a long term phenomenon,” says Woodrow. “As the middle class in Asia – and in particular, China – continues to grow, so will our liftings. Major drivers are not only luxury goods but also perishables be they fruit, vegetables, sea food, meat, as well as such items as milk powder.”

Woodrow is also not too concerned about the shift of manufacturing further inland and away from China altogether.

“Manufacturing will continue to move and we will continue to ensure that we are there to service the demand be it from the 3C’s (CGO, CKG and CTU), Vietnam or the sub-continent,” he says. “Cathay Pacific is lucky to have a fantastically located hub here in Hong Kong that is also a world leader in terms of efficiency.”

By Jeffrey Lee

Staff Writer | Hong Kong