For Cathay Cargo, the past seven months have been one typified by an upward curve. Where the year started as expected, which is not to say poorly nor well, the continuing momentum generated by surging consumer demand for e-commerce has brought the carrier to a point that Director Cargo, Tom Owen, tells Freightweek “no one expected”.
“What’s been very interesting is that there was always a season for e-commerce,” Owen continues. “But even looking at what I call ‘standard e-commerce fare’, we have just seen no sign of things slowing through the traditional weaker months. Compared to what we witnessed before the pandemic, it has become a sustained demand phenomenon that is well above expectations.”
Added to strong e-commerce demand, following last year’s infamous lack of peak, Owen is more confident that there will be one this year, “particularly on our long-haul routes”. Noting that while it has not yet begun – as some have otherwise suggested – the steady-state upward momentum, the state of inventories world-wide and possible concerns ahead of a US election to trading conditions leave it all but assured. But “it is not all rosy,” he adds.
“There are sectors in the air that are not faring as well,” he says. “We are seeing some weakness in consumer goods, IT and even new product releases. But this is more than being compensated for by the currently strong e-commerce demand. We are also seeing strength in the perishable produce sector, with a lot more flying around than had previously been the case.”
From Owen’s perspective, the reason behind these strengthening verticals is clear: increasing disposable income outside of the traditional markets. “It’s a reflection of the evolving global GDP,” he says. For Cathay, its location has left it in an enviable position to tap into the demand. Describing Hong Kong as “the world’s greatest air cargo hub”, Owen says the team have seen an increasing flow of goods from not only Australia, but Latin America, and the US to and through the hub. But he cautions against hubris. “Other cargo hubs are also improving and evolving, We do not have an inherent right to this leading position, and we have had to fight hard for it. We are continuing to improve what Hong Kong can offer to global air cargo customers, working alongside our partners in the Airport Authority Hong Kong and the wider Hong Kong logistics supply chain.”
It is hard however to suggest that Cathay Cargo is resting on its laurels. It has been particularly active in recent years – as has Hong Kong’s logistics sector in general – in moving towards futureproofing itself. This has included building a new pharmaceutical facility to keep it ahead of the demand that the post-Covid world has brought.
“Another area we have been successful in is building a sea-to-air hub in Dongguan” he says. “This allows cargo originating in the Greater Bay Area to be pre-screened and to clear both customs and security before being loaded onto sea barges bound for Hong Kong International Airport and onward carriage by Cathay Cargo to the final destination. This intermodal transport solution saves time and cost not only for us but for the forwarders and shippers that we work with. Having this controlled environment has also enhanced the security for cargo being moved and provided additional capacity to move cargo from the Greater Bay Area.”
At the present moment, when it comes to thinking ahead and maximising capacity, it is very hard to sidestep the digitisation, and especially the future usage of AI that has become part and parcel of discussions both around the conference and dinner tables. Owen is similarly enthused on the topic. “It is such an important and opportunistic area for all carriers,” he says. “We have been working on a detailed roadmap for a few years on the issue of digitalisation and have developed a frontline app through which our employees can do almost their entire job. We also have a stream around customer centric digitisation, through which we have linked many of our forwarders, that keeps them in the know on where their cargo is.
” There is further work underway on this front too, with the successful booking system “Click and Ship” set to be enhanced with additional functionality that enables customers to directly manage their cargo bookings once made and new search capabilities using Large Language Module AI algorithms, with Owen confident that this work on digitisation will serve to bring “a better quality of service and transparency” to Cathay Cargo’s customers. And what about future services? Well, he says that the biggest one on the horizon is the launch of the new “Cathay Courier” product.
“With Cathay Courier – which is to launch in the third quarter – our main intention is to bring the courier concept into the 21st Century and to really focus on the desire of moving goods quickly beyond domestic markets,” says Owen. “Businesses have small packages, and they want to send them from point A to point B very quickly. Cathay Courtier aims to achieve this. We will initially be rolling it out in our core markets – namely, Europe, Japan, and parts of Southeast Asia. The intention, really, is to take what is a very clunky, unsophisticated service and make it lean and easy to use.”
