How was business in 2020?
Our revenue was affected – no-one is immune from this pandemic. Volumes were down around 30 per cent. We were hit harder than our competitors at Hong Kong International Airport because our biggest customer, Cathay Pacific, carries most of its cargo on its passenger aircraft. With so many flights suspended and aircraft grounded, that made a big impact. We have a lot of fixed costs, so our productivity on a per tonne basis took a hit. Because we have good partners we managed to keep costs down and we sought some relief measures too. But even as we were doing that and trying to find new revenue streams, we had to escalate hygiene measures. On the positive side, it has been really encouraging to see such great teamwork both in the Cathay Pacific Cargo Terminal and with our business partners. Together we were able to accomplish some great things.
How did you respond to the changing market because of the virus?
Swiftly. To give you an example, when we saw a significant drop in Cathay Pacific’s belly capacity, we knew that would be problematic for all transhipments into the Chinese mainland. After the border closed, we liaised with our truck operator for our cross-border service, CBX, a product we offer to our airline customers for carrying transhipments from Hong Kong to various parts of Southern China. With no air access possible, we asked our CBX operator to truck shipments to more northern parts of the Chinese mainland too. This helped Cathay Pacific to clear some of its transhipments, and there were many trucks going over the border each day and also bringing in some cargo for export.
What were some of the other COVID-specific achievements?
Back in February, the virus was hitting Hong Kong and there were huge quantities of masks and hand sanitiser being sent here by concerned family and friends, and a lot of people buying online. There were tonnes and tonnes of boxes – the air mail centre at the airport had never handled so much before and the sheer volume meant that people were waiting weeks for their parcels. HongKong Post asked us for help. Within a couple of days we emptied an area in the terminal and made it a temporary mail-handling centre. We were able to help clear the backlog in a couple of weeks.
When Cathay Pacific started using passenger aircraft to handle cargo-only flights and converted some aircraft for cabin load, we helped to design the processes for safe loading.
We also helped with the approvals and clearances for other airlines that were running ad hoc charter flights filled with PPE but had never been to Hong Kong before. While this was an opportunity to generate revenue, we also wanted to play our part as much as possible on humanitarian grounds.
How have you prepared for vaccine shipments?
We’ve done a lot of preparatory work and established a task force that undertook a very thorough review of our capabilities. At that point, we estimated that we could handle 6.6 million doses of vaccine per day. We had already planned to expand our pharmaceutical room, so by the end of this year that will increase to around 8 million doses. We also have a very flexible design in the terminal and a lot of charging points for active containers and space for re-icing passive containers.
On the systems side, we have rolled out a monitoring system that records time and temperature of shipments. Originally this was designed for all specialist cargo, but it is in place in time for the vaccine shipments. The Special Cargo Handling System will work alongside Cathay Pacific’s Ultra Track.
Working with the Airport Authority to smooth processes, we will be able to release vaccines for Hong Kong in 15 minutes of them arriving at the terminal. We have people especially assigned to look after these shipments. And all our staff are already trained from CEIV Pharma accreditation.
Do you hold other accreditations?
Yes, we are one of the few cargo terminals to hold all three of IATA’s CEIV accreditations – Pharma, Fresh and Live Animals. We were certified for CEIV Live Animals in March, and then we were recertified for Pharma later last year.
On the safety side we have done a marvellous job and our hard work has been recognised with industry safety awards (see box below) and a reduction in workplace injuries.
We also won the AFLAS Best Green Air Cargo Terminal Operator, in Asia Cargo News’ annual awards.
What sustainability initiatives enabled that win?
We have a sustainability steering committee, which continuously analyses how we can reduce emissions and waste. For example, we have been collecting a proportion of the plastic wrap we use to be remade as wrap again. It’s not 100 per cent but we are recycling what we can. We have also installed a solar system on the roof, which generates some electricity, in a joint project with CLP, and use LED lighting systems as well.
What are the plans for this year and beyond?
Hong Kong has been the world’s number one air cargo hub for 10 consecutive years, so as a cargo terminal at HKIA we have a vital role in supporting the logistics industry to maintain that status as part of the overall Greater Bay Area plan.
This year the ICAO security screening directive will require 100 per cent of shipments to be screened from March. We are ready and have trained staff and installed 86 new cameras so that we can monitor screened cargo from our control centre.
Our only plan to develop infrastructure at this point is our pharma room expansion, but we are focusing on digitalisation of our processes and to make better use of the data that we collect, so that we can become more efficient at demand forecasting in order to manage our capacity and manpower. Despite the challenges of the past year, we have achieved a lot and our team continues to work hard to improve our capabilities and service.
Awards and accreditations
CPSL became the first and only air cargo terminal in Hong Kong to receive the Hong Kong Quality Assurance Agency (HKQAA) 5S Certification.
CPSL was recertified for CEIV Pharma, retains CEIV Fresh and was awarded CEIV Live Animals accreditation.
Awards in 2020
HKIA Safety Excellence Award – Gold
Aviation Logistics 2019/20 Safety Performance Award
Aviation Logistics Smart Safety Enhancement Champion
AFLAS Best Green Air Cargo Terminal Operator