With Covid-19 impacting travel and the passenger side of the aviation business, cargo has come a long way in building the resilience needed to combat any future pandemic. Digitization of processes in 2021 did away with the use of paper and is reaping benefits now, says Wilson Kwong, Chief Executive, Hactl.
Almost two years into the pandemic now, how has it impacted the air cargo sector either ways?
For Hactl, the most obvious manifestation is the current lack of belly-hold capacity resulting from suspension of several passenger flights globally. This has reduced traffic of passenger aircraft, but increased it for freighters, which now makes up for over 80 per cent of our business. The freighter services are a mix of continuing scheduled operations, increased scheduled frequencies, and ad hoc charters. We are still seeing some passenger-freighters, but thankfully, there are virtually no cargo-in-cabin operations.
While these were essential in the early days of the pandemic, and we fully supported them, they are labour-intensive, and we need to present cargo up to six hours earlier than usual. e-Commerce is continuing to boom, and it is clear that global shopping habits have changed forever. Our subsidiary, Hacis, has recently opened an e-Commerce fulfilment centre to help our customers attract and service this business.
What are the plans for the next year in making air cargo operations effective in these uncertain times?
Hactl has recognised early on its historically-high degree of automation, which reduced our reliance on a large manual workforce. It also gave us an advantage because we were able to continue operating even when there were issues with staff self-isolation and complying with increasing quarantine requirements. We took measures to equip our office staff to Work from Home — issuing note-pads, upgrading our servers and network resources, and increasing cyber security. We updated and digitized our processes to eradicate paper and make remote working more productive. We did most of the finessing work in 2021, and are now reaping the benefits for the future.
That said, “We are still interested in opportunities to automate areas such as ramp-towing and warehousing, where autonomous-guided vehicles could help to mitigate the current challenges of staff recruitment, enabling us to expand our business throughput without increasing staff levels. We are in the early stages of examining the possibilities.”
What possible steps can be initiated in bringing the air freight rates down?
As a handler, Hactl has no direct involvement in rates setting, nor is it a direct beneficiary, since we are paid on the volumes we handle. The question whether airfreight rates should reduce, or remain at current levels, is an interesting one. Many would argue that the industry has been under-pricing itself for decades, and that the current rate levels represent a fairer return on investment. I think we can all agree that the industry needs better profitability than in recent years, if it is to continue to meet the demand for modernisation and investment to accommodate e-Commerce, and commodities requiring special handling such as pharma.
Do you think air cargo be impacted with new COVID-19 variant creating ripples?
Continuing problems with the variants are to be expected; indeed, we may now live in an age where COVID-19 is a permanent (hopefully, less serious) presence. Obviously, the impact is on travel and the passenger side of the aviation business. As far as the cargo is concerned, we have come a long way in building the resilience needed to combat any future pandemic – additional freighter capacity, new working methods and so on. So the overall impact of any future variants, or even a new pandemic, should be less than in the past.