You rejoined Cathay Cargo in the summer. What have been your first impressions?
My first impressions have been of a wonderful team of very hardworking, passionate, caring forward-looking and innovative professionals who genuinely strive to reflect our ambition to be the most customer-centric air-cargo service brand. During my first month, we hosted an event for customers who were attending the Asia Fruit Logistica trade show in Hong Kong and during the evening, a customer asked me a simple but important question – ‘why should I send my produce on Cathay?’
It just so happened that a week before, there had been a typhoon and over the course of the weekend when the typhoon hit, I saw Cathay Cargo people working tirelessly on rebooking and protections, as well as adapting to operational challenges. What struck me was the dedication and focus the entire team put on handling the situation in the interest of our customers. It allowed me to respond to the question “why Cathay?” with a real example of what I consider to be a key differentiator – our people. With Cathay Cargo, you will have our teams across the world absolutely focused on delivering for the customer. We’ve got a fair amount of typhoon handling experience and whether it’s rainstorms and typhoons here in Hong Kong, or snow disruption somewhere in our network, there will be Cathay Cargo people working hard and all hours to make right all the difficult situations we’re faced with. So to me, when we say ‘We Know How’, it reflects what I’ve seen – people who really care, with an incredible can-do attitude.
How had the business changed in your absence?
A lot. We’re a far bigger cargo carrier now. Cathay Cargo’s fleet has grown, Air Hong Kong is very different now and HK Express is an exciting new area of opportunity for us. But what’s really struck me is that while much has changed, there remain the core culture and values in Cathay Cargo that I experienced when I first joined.
There have also been major leaps in technology, access to the greater availability of information. Our infrastructure and services have improved, enabled to a large degree by Cathay Cargo Terminal. And we are far more solutions-focused than when I was last here. We focus on solutions that our customers really care about and value and we apply a digital mindset to our solutions and experience design too.
How has the year gone in commercial terms?
While Cathay’s efforts and plans to rebuild have focused largely on the passenger side of the business, Cargo has been performing well. We are adjusting, just like the rest of the industry and 2023 has, to my mind, been a ‘normalisation’ or transitionary year following the exceptional period for the industry during the pandemic.
If you’re comparing rates in 2023 to the peak of the peak in the pandemic, then, yes, they’re lower. However, we have most definitely experienced a peak this year in quarter four, and the outlook is encouraging. Previously subdued forecasts were replaced by greater optimism based on the strength of demand for e-commerce and I’m optimistic as we look ahead to 2024. There is such high demand for e-commerce and Cathay Cargo is ideally positioned in the Greater Bay Area with a great network and with capacity growth plans for 2024.
What is the future for e-commerce?
I read the same industry news that our customers read and many of the conversations I’ve been having over these past few months have been on this very topic. What we are seeing now is continuing high demand for e-commerce and the growth trajectories are significant. Online retail growth is forecast to vastly outstrip traditional retail and if that’s the case, then that’s a very bullish outlook for air cargo.
What are the long term aims for Cathay Cargo?
The big news recently has been about our order for six new Airbus A350F freighters and the rights to acquire 20 more aircraft. These new, state-of-the-art freighters will allow us to grow and further connect Hong Kong and the Chinese Mainland with long-haul destinations in North and South America, as well as Europe.
These new aircraft will offer other advantages in terms of operating efficiencies and contribute to our sustainability goals. The order also recognises that freighters are a differentiator for us and our freighter-only network. I’m very confident in the outlook for cargo demand from Hong Kong and the GBA and I’m looking forward to these new aircraft arriving from 2027.
How will digitalisation feature next year for the Commercial Team?
We’re future focused in terms of all the initiatives we’ve got going on. It’s about bringing cargo up to the mark as it relates to the digital expectations of our customers. Building the APIs (application programming interfaces) this year so that our customers can access Click & Ship on their own systems has been a big development, and we want to develop and accelerate this model with more of our partners. We want to provide more control to our customers so we’re better positioned to have those value conversations about specific or specialised solutions that are in increasing demand from our customers.
How is the integration with Greater Bay Area performing?
We remain passionate believers in the ongoing strength of Hong Kong and rest of the GBA. We are incredibly lucky to have developed over the decades a great network, fleet, expertise and experience, and a suite of solutions so that we can be the GBA air-cargo gateway. We have had trucking capabilities into the GBA for many years and this year has seen the launch of the HKIA Logistics Park in Dongguan.
We also have new infrastructure in the Cathay Cargo Terminal, to support our Cathay Pharma solution and our own upstream base in the GBA for intermodal shipments in the HKIA Logistics Park in Dongguan. The exciting news is that we can now accept imports into the Logistics Park too. As well as its export strength, particularly e-commerce, the GBA is also a phenomenal consumer market, and I can see high-quality perishables, for example, benefiting from these routes in.
What is your message to customers?
At the year-end, our teams across the regions have made sure to connect with our customers to toast them and thank them for their support. It’s so important that we express our heartfelt gratitude for the year past and to look forward to the year ahead. There have been events taking place these past weeks, including here in Hong Kong and after a few disrupted years, it has been lovely to reconnect in person again..
The entire Cathay Cargo commercial team is so grateful to all our customers and partners and as we approach the festive season, may I wish everyone “Happy Holidays”!