Savannah's International Business News Source
Mon, Oct. 15, 2012
Mark Michaels, center, gives Damco USA's perspective on Hong Kong as a logistics gateway to Asia.

With all the talk of a slowdown in China and plodding recovery around the world, you'd think logistics providers would be sitting on their hands, biding their time until the economic picture clears up. 

But instead of shrinking back, some of the biggest names in cargo are investing in new assets, confident that an upswing is around the corner.

"This is a blip, but we know it's just a blip. We've gone through this before and it won't be the last time either," said Fred Ruggiero, vice president of cargo in the Americas for Cathay Pacific Airways.

The Hong Kong-based airline has already purchased seven new Boeing 747-8 wide-body freighters, the most fuel-efficient cargo jet in the skies. The planes have climate-controlled sections suited for high-value goods like pharmaceuticals, Mr. Ruggiero said at a Hong Kong forum in Atlanta Oct. 4.

Cathay is also expecting delivery of one more 747-8 this month and two more in 2013.

At the same time, the airline is building a new $700 million cargo facility at Hong Kong International Airport that can process freight in less than one hour.

"There are airports in the world that cannot transit people in less than 60 minutes," Mr. Ruggiero said.

While overall growth rates are down in China, all you have to do is look at the long lines in Asian shopping malls to understand that a new consumer class is rising in countries previously seen only as sources of cheap labor, said Mark Michaels, chief commercial officer at Damco USA Inc.

"They have a desire to buy Western brands and Western goods, and it creates a tremendous opportunity in all of those countries," said Mr. Michaels.

He added that Hong Kong is an ideal base for the Asia cargo operations of Damco, a subsidiary of Denmark's AP Moller - Maersk Group.

Switzerland's Panalpina Group, another logistics powerhouse, is also buying new freighters and bolstering its warehouses in the Southeast U.S. and in Hong Kong, said Mark Wills, the company's Miami-based head of sales and marketing for the Americas.

Panalpina has 350,000 square feet of space at the ATL Logistics Center on the Hong Kong harbor. Closer to Atlanta, Panalpina has had a major air cargo presence in Huntsville, Ala., since 1990, helping the city's international airport become a regional cargo hub.

He cited Nashville-based Griffin Technology, a provider of cases and accessories for Apple Inc. products, as a beneficiary of direct routes between Hong Kong and Huntsville.

Because Apple is secretive about its new designs, even with its closest partners, Griffin must hustle to get products from factories in China's Pearl River Delta to U.S. consumers ahead of competitors when new devices like the iPhone 5 are released. Without streamlined logistics, it would be harder for the company to remain competitive, Mr. Wills said.

Related Countries: China, Hong Kong
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