Air freight still flows by freighter in and out of Hong Kong airport

THE two-day closure of Hong Kong International Airport (HKIA) had not greatly impacted air cargo movement though future delays appear inevitable

14 August 2019 - 19:00
THE two-day closure of Hong Kong International Airport (HKIA) had not greatly impacted air cargo movement though future delays appear inevitable.

By Wednesday only about 30 protesters remained at the airport and flights began taking off on a more regular basis, reported the UK Guardian.

The airport?s website showed dozens of flights taking off overnight and listed hundreds more which were scheduled to depart throughout the day, although many were delayed.

Check-in desks were operating normally as hundreds of delayed passengers queued up and airport staff scrubbed the terminals clean of blood and debris from overnight. Given the volume of freight that passes through the airport - 5.1 million tonnes in 2018 - any disruption of air traffic can hinder cargo departures, reported EPS News (Electronics, Purchasing Supply Chain), 30 miles south of Boston.

Air freight carriers, including Cathay Pacific, FedEx, Qatar Airways and Hong Kong Air Cargo were reporting on-time departures from Hong Kong. However, cargo is also shipped on passenger planes, and flights had been cancelled.

Hong Kong remains a major logistics hub for the electronics industry, and HKIA reported 58,000 cargo-related ?air traffic movements?in 2018. Since the US-China trade war has commenced, Hong Kong?s role as a ?middleman?in the electronics supply chain has grown in import.

The US ?first-sale?rule levies tariffs on the value of a transaction between a manufacturer and a middleman or distributor. These costs are usually lower than ?second sale?transactions to end-customers. If a Chinese company sells a product to a Hong Kong exporter, that's considered a first sale. Once a customer buys the product, that's a second sale.

A lot of commerce passes through HKIA. Although bulk electronics goods are generally transported by sea, air cargo is widely used for expedited shipments or orders that have already been delayed for some reason.

Delayed orders cascade upward in the supply chian. OEMs and EMS providers want their bills of material to arrive in factories just prior to assembly. If any part of that order is delayed, manufacturing lines remain idle. Factories could lose up to $10,000 per hour in downtime.

Electronics distributors are often called upon to fill these gaps or supply substitute devices. Air shipment is often the best transport option.

A good portion of those shipments are destined for China, which is served by HKIA. The airport has established cargo depots at strategic locations in China?s Pearl River Delta. This enables a better relationship with cargo sources and facilitates the flow of goods via Hong Kong, enhancing HKIA?s role as a key link in China?s supply chain.

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