AAT reports robust organic growth

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Asia Airfreight Terminal (AAT), a cargo services provider at Hong Kong International Airport (HKIA), operates on a franchise basis awarded by the Airport Authority Hong Kong. It is owned by a consortium that includes SATS and FedEx as well as three other shareholders from outside the aviation industry. Since the recession hit, it has seen magnificent recovery in cargo volumes, driven especially by the Asian market. Jo Murray speaks to Nelson Lee, AAT’s General Manager, Corporate Development

“We have seen robust organic growth (through increased frequency and capacity of existing customer airlines) at 7.5% in 2010,” says Lee. “Twelve airlines appointed AAT to be their ground handling agent for their cargo between April 2010 and January 2011.” Of particular significance was the award of handling contracts to AAT by Jet Airways and Etihad Cargo at HKIA.

For the rest of this year, AAT expects to see 5.5% organic growth – this is a slower growth compared with 2010 as the base from which it is now working is much higher than that of 2009. Lee expects a fair level of organic growth to continue.

He lists drivers for growth as Hong Kong’s status as the first in the list of the top five fastest growing international freight markets over the 2009-2014 period. Cargo growth in Hong Kong has been benchmarked at the rate of 12.3% on average according to IATA. He also notes that intra- Asia and Indian market growth has been increasingly strong. “Most of our Asia-based carriers have increased the frequency of their flights.” he points out.

But the doldrums of 2009 are not far behind us. For some, these quiet days were cause for despair; but for others they provided an opportunity to invest, train and implement new techniques. AAT falls into the latter camp. Lee says AAT used this time to enhance AAT’s Cargo Management System (CMS) functions for greater flexibility and transparency. “CMS is our self-developed cargo inventory and documentation system that serves as a community system as well as an information source for the entire shipping public through the internet,” says Lee.

AAT also revamped the service product offered by Asia Airfreight Services (AAS), a wholly owned subsidiary of AAT, to offer an expedited and economical bonded truck service for cross -boundary cargo transportation between Hong Kong and its hinterland.

At the same time, staff were provided with frequent Basic Cargo Training, Special Cargo Training and DG Training to prepare for the recovery in cargo volumes in 2010. “We also redefined our vision and mission as well as re-organised our management team to deliver the four thrusts: customer intimacy; operations excellence; products and innovation; and growth,” he says.

When asked about the ways in which AAT proves the quality it offers through working with regulators and industry bodies, Lee points to AAT’s ISO 9001:2008 certificate on Quality Management System (QMS). “This has ensured that AAT has maintained a high awareness of service quality among its staff,” he says. “We have also acquired Occupational Health and Safety Assessment Series (OHSAS) 18001:2007. It is a standard which enables AAT to control its risks and improve its performance on staff safety. By complying with the standard, AAT adopts a systematic approach to identifying hazards, and either eliminate or reduce the associated risks.”

Lee continues: “AAT also has a security programme, acquiring the standards of the Transported Asset and Protection Association (TAPA), to safeguard AAT’s aviation operation against acts of unlawful interference.  Since2010, AAT has also been a member of Cargo 2000, which measures our effectiveness in delivering committed service standards.”

Of course nothing stays the same for long and the same is true of the handling situation at HKIA. Cathay Pacific has announced a decision to proceed with the development of its own air cargo terminal at HKIA but will this have implications for AAT? “In 2010, Hong Kong became the cargo leader in the world by 4.17 million tonnes of cargo volume,” says Lee. “The market is expected to grow even more progressively following keen competition in 2013 with the new joiner Cathay Pacific.”

He continues: “Market players, including AAT, will introduce different types of value-added services to attract new customers and, more importantly, to sustain long-term partnership with current customers. The higher service standards and more advanced development by service providers will prepare HKIA to reach expected cargo volumes of 5.3 million tonnes [according to IATA figures] by 2014.”

Of course up-keeping the service is often the key and AAT has been active on three fronts. From March 1, 2010, e-CAN (e- cargo arrival notification) was introduced to automatically send out emails to registered users for efficient cargo collection at AAT. This has facilitated instant communication with consignees. In mid-2010, mOFS (mobile Outbound Flight Sheet) was developed to enhance the overall efficiency of export cargo handover by electronic messages to shorten processing time. Finally, Quick-Link was introduced in 2011 to effect efficient ramp operations coordinated between AAT and SATSHK.

And it is not just shippers that have to be satisfied with AAT’s services; freight forwarders have plenty to say too. “We constantly evaluate the satisfaction levels of freight forwarders through the Annual Air Cargo Terminal Users Survey in terms of IT, safety and customer services, etc,” says Lee. “We also actively involved freight forwarders’ participation in the AAT Cargo Forum 2010 in order to provide more customer-oriented cargo handling solutions catering for special needs.”

So, looking forward, is it possible to export AAT’s expertise outside Hong Kong? Lee responds: “AAT has been looking for business opportunities on mainland China for continuous corporate development. We are open to market interests and we welcome any cooperation opportunities in cargo handling, bonded truck services (AAS) and other complementary services.”

More tangible and immediate future development focuses on two areas of activity. The first is iPhone apps in order to check a shipment’s status and flight information. This will be launched by Q3 of 2011. It is aimed at agents, airlines, and truckers, and offers the unique opportunity to check shipment details immediately and with no geographical limit.

Finally, AAT is putting in place a telephone enquiry handling system. It will be automated, available 24/7, able to handle air waybill and flight enquiries through interactive voice response technology.

There is no stopping progress and, with Hong Kong’s importance to world as a leading freight hub set to continue, there is plenty of reason to invest, redefine processes and train.