future of hong kong's air freight - university of hong...
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![Page 1: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/1.jpg)
The University of Hong Kong
Chow Chi Shing, Shing Leung Yuen Lam, LindaLi Fengting, TinaNg Cheuk Hei, TonyWong, Stephanie
Future of Hong Kong's Air FreightCase 4: Do you see a bright future for Hong Kong's air freight? What are the challenges ahead?
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Background
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Hong Kong Position as Logistics Hub
• Ranked 1st in airport cargo throughput in 2014• HKATL: 8.7% growth in goods throughput
Background Analysis Challenges and Opportunities Conclusion
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Hong Kong Position as Logistics Hub
Background Analysis Challenges and Opportunities Conclusion
• Continuous growth in Hong Kong’s trade• Around 3.5% annually• Drives growth in air freight industry
![Page 5: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/5.jpg)
Analysis
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1.StrengthsReputation
• 1st in world airport efficiency ranking in 2013
Background Analysis Challenges and Opportunities Conclusion
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• Logistics Performance index•Measure efficiency and quality of logistics service
•Ranked 3rd in Asia
Strengths
Background Analysis Challenges and Opportunities Conclusion
![Page 8: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/8.jpg)
Strengths2. China’s trade barriers to countries
•China’s protectionism policy•Exmaple: US auto and steel products•Foregin goods re‐export in Hong Kong•By‐pass China’s trade barriers
Background Analysis Challenges and Opportunities Conclusion
![Page 9: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/9.jpg)
Strengths3. Hong Kong tax and legal system
•No import tax for most goods•Trusted legal system and free economy•Favourable for doing business
Background Analysis Challenges and Opportunities Conclusion
![Page 10: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/10.jpg)
Strengths4. Geographic location
Background Analysis Challenges and Opportunities Conclusion
• Short distance form major internation and regional hubs
![Page 11: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/11.jpg)
Weakness1. Expensive air freight rate•Higher rate in Hong Kong due to higher operating cost•Such as higher rent and wage•e.g. Rate from Hong Kong to Europe 4X Guangzhou to Europe
Background Analysis Challenges and Opportunities Conclusion
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Weakness2. Re‐export inconvenience •Go through custom from Hong Kong to China or vice versa•More convenient for airports in China
Background Analysis Challenges and Opportunities Conclusion
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Weakness3. Airport service satuation and expansion difficulties
•Current capacity: 70 flights/hour in 2015•Forecast satuate in 2017•Limit growth of the air freight sector
Background Analysis Challenges and Opportunities Conclusion
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Challenges
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Intensified Competition
Analysis Challenges and Opportunities ConclusionBackground
Rising APAC Competitiors ● China: Guang Zhou, Shang Hai,
Beijing● Singapore: Changi● Japan: Tokyo● Korea: Seoul
● Improved facilities● Increasing capabilities● Enhanced regulation and
management
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Intensified Competition
Fast development of PRC logistics hubs● Strong investment
suportted by government● Opening market ● More transparent system● Large capacity
Analysis Challenges and Opportunities ConclusionBackground
![Page 17: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/17.jpg)
Declined Investment in PRC Manufacturing
● Main Business: ○ export ○ re-export
● Main supplier PRC
Analysis Challenges and Opportunities ConclusionBackground
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Declined Investment in PRC Manufacturing
● Declined Manufacturing Investment
● Declined trandes & logistics through HK
Analysis Challenges and Opportunities ConclusionBackground
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Removed Barriers between PRC & TW
●PRC & TW: No direct trade due to polical issue●Transhipment through HK -> Large proportion of business
Previously Now & Future
●Barriers in between removed○ Weekly flights: 370 -> 616○ PRC(41) & TW(9) airports
opened ●Lost proportion of transhipment business
Analysis Challenges and Opportunities ConclusionBackground
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Opportunities
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OpportunityThree Runway System
Background Analysis Challenges and Opportunities Conclusion
Solve the Saturation Problem of the Existing Two Runways
![Page 22: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/22.jpg)
OpportunityInspection
• Good Reputation• Quality Audit Provider• Service Provide:
•Pick Up•Inspection•Customer Declaration
Background Analysis Challenges and Opportunities Conclusion
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OpportunityHuge Increase in Demand of Cargo Industry
Background Analysis Challenges and Opportunities Conclusion
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OpportunityAirbridges Extention
Background Analysis Challenges and Opportunities Conclusion
![Page 25: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/25.jpg)
OpportunityAirline Alliance
Example: •Hangzhou•Date: 2005
•Goal: •enhance flow of people and goods•enhance trade cooperation and exchange•develop economy
Background Analysis Challenges and Opportunities Conclusion
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Conclusion
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Conclusion
Background Analysis Challenges and Opportunities Conclusion
Opportunities ChallengesAirport expansion China manufacturing decline
Good reputation in inspection Competition between Nearby logistics hub
Airport strategic alliances Barriers between PRC and Taiwan removed
![Page 28: Future of Hong Kong's Air Freight - University of Hong Kongwp2.cedars.hku.hk/prize/wp-content/uploads/sites/6/... · The University of Hong Kong Chow Chi Shing, Shing Leung Yuen Lam,](https://reader034.vdocument.in/reader034/viewer/2022050307/5f6f61a327811a20084ceb55/html5/thumbnails/28.jpg)
Q&A