The 10th Asian Logistics, Maritime and Aviation Conference (ALMAC), jointly organized by the Government of the Hong Kong Special Administrative Region (HKSAR) and the Hong Kong Trade Development Council (HKTDC), concluded its live program on 18 November. More than 60 leaders from the logistics, maritime and aviation sectors around the world shared their insights in 35 topical sessions at the event. ALMAC had its debut as an online event (ALMAC Online) this year and industries continued to show their support with more than 10,000 viewers from close to 60 countries and regions joining the global live streaming, including many from Hong Kong, Mainland China and nine out of 10 countries in the Association of Southeast Asian Nations (ASEAN) bloc, along with newcomers from Austria, Brunei, Brazil, the Czech Republic, Egypt, Hungary, Rwanda, Slovakia and Uzbekistan and more, highlighting how the online format offered networking opportunities spanning the globe.
ALMAC Online provided several interactive channels to connect different industry players, helping to expand business connections and build opportunities. Attendees could pair up with business partners easily through one-on-one virtual meetings and exchanging business contacts. The service created easy communication between potential business partners, generating more than 5,300 connections. Insight Exchange, Meet the Experts and Meet the Shippers sessions helped participants search for leading service providers of innovation technology and solutions. In addition, representatives from key trade associations provided complimentary advisory services, covering areas such as regional supply chains under the pandemic, changing trade flows and logistics technology.
The HKTDC worked with 100 international chambers of commerce and other organizations to set up 10 sub-conference venues in areas with a low COVID-19 risk, connecting global logistics groups simultaneously. Numerous business-matching meetings and virtual roundtable sessions were organized for delegations from France, Germany and Italy, connecting them with industry players from Hong Kong and the mainland to capture business opportunities.
Preparing for COVID-19 vaccine air logistics
The pandemic has brought unprecedented challenges to many sectors, including the air cargo industry. In the Air Freight Forum of the conference, co-organized with Airport Authority Hong Kong, air cargo community stakeholders discussed the industry’s outlook and outlined a roadmap for business in the current environment.
Frédéric Léger, Director APCS Products, International Air Transport Association (IATA), said the major issue faced by the industry now is the reduction in air cargo capacity. Globally, the grounding of about two-thirds of passenger fleets and absence of non-stop freighters in some regions had a significant impact on the air freight industry. Hong Kong has been less impacted by the capacity crunch because of its hub status and the continued flow of freighter traffic.
Mr Léger also spoke about preparing for the shipment of COVID-19 vaccines. Around 80 potential vaccines are currently in development, with some being ready for shipping by the end of the year. The shipment of vaccines will create significant supply-chain challenges since it’s estimated that providing one dose for each of the world’s 7.8 billion people would require cargo capacity equivalent to 8,000 Boeing 747 cargo aircraft.
“The key factors depend on where the vaccines will be produced, where they are going, where they will transit, how many doses per person, and the time between injections,” Mr Léger explained. Infrastructure and staffing requirements should also be considered. For example, transporting vaccines requires storing at ultra-low temperatures of minus 80 degrees Celsius, and there must be appropriate tracking and handling procedures, facilities, equipment, packaging and extra capacity on the ground. At the same time, air crews and ground staff must be authorized to support vaccine transport, with sufficient training on risk, quality and handling procedures to deal with time- and temperature-sensitive pharma products. Mr Léger said collaboration between governments would be crucial, suggesting authorities work to arrange fast-track vaccine delivery, expediting the release and clearance of goods to avoid bottlenecks at borders.
Alaina Shum, General Manager, Aviation Logistics, Airport Authority Hong Kong, said COVID-19 vaccines would generate about 65,000 tonnes of air freight but with challenging requirements such as ultra-cold storage, cool dollies, apron shelters and airport-wide IATA certification. She said Hong Kong International Airport (HKIA) was already fully equipped to meet these requirements well before the pandemic outbreak.
Nevertheless, Ms Shum said strict procedures to reduce risks during the pandemic would affect airlines’ ability to efficiently deploy crews, leading to additional costs and, in some cases, flight cancellations. She said Hong Kong authorities and HKIA had launched relief measures to help airlines keep flying, while HKIA was working with the Civil Aviation Department to increase capacity out of Hong Kong by expanding slot approvals for chartered flights, especially on high-demand routes carrying medical supplies. This resulted in a 25% year-on-year increase in freighter capacity from March to September this year, with some airlines refitting passenger aircraft to operate them for all-cargo services.
Expanded role of e-commerce during pandemic
Ms Shum said the pandemic had led to rapid growth in medical-supply shipments, including personal protective equipment, while the increase in work-from-home arrangements had boosted demand for e-commerce electronic products. Overall, she said, the pandemic had accelerated the shift to online shopping, which would have a long-lasting effect.
William Xiong, Chief Strategist and General Manager for Export & Global Logistics, Cainiao Network, discussed the growth of e-commerce during the pandemic. He said Cainiao, a mainland logistics firm, could handle 400 million packages a day with its global delivery network and has also helped international brands and companies leverage the power of big data to allocate their inventories intelligently and cut costs. Demand for such services had increased more than 10-fold in recent months, he explained.
Mr Xiong said the company had already handled more than 130 million medical-supply shipments this year, serving about 150 countries and regions as well as many international organizations such as the United Nations.
He mentioned that prices for freight had fluctuated heavily during the pandemic, and Cainiao looks forward to prices stabilizing in the future. The company is expanding its capacity and building connections in cooperation with partners to boost its existing capacity and expertise. By 2021, the firm intends to add 3,000 more chartered flights and expand scheduled aviation services with a 72-hour turnaround time. With this move, Cainiao aims to reduce costs through digitization and optimization for more affordable and accessible services that contribute to the industry’s development.
Hong Kong as an International Maritime Centre
The pandemic has also created concerns for the maritime industry. During the Maritime Forum, held in the afternoon on day one of the conference, Kitack Lim, Secretary-General, International Maritime Organization, shared his thoughts on business prospects and said the industry faces two major challenges – digitization and carbon-dioxide emissions reduction. The industry could not avoid the issue of energy transition and the reduction of greenhouse-gas emissions, and had to meet the Paris Agreement target of halving fossil-fuel usage. Mr Lim said investment in research and development and infrastructure is one of the solutions, adding that innovations through digitization and artificial intelligence (AI) were also necessary.
Several leading maritime industry players gave their insights at a session titled “Maritime Forum – A Catalyst for Change”. Vincent Clerc, CEO of Ocean and Logistics, A.P. Moller –Maersk, said the shipping industry had begun to rebound at the end of the second quarter of 2020 and demand from October to November had even exceeded expectations. Mr Clerc said most relevant services and technologies had been digitized for some time but the COVID-19 pandemic has accelerated the process with customers also looking for more digital solutions. Digitization standards in the industry presented problems and digitization involved large investments – and not all corporations could afford to adopt such solutions. Mr Clerc said A.P. Moller – Maersk was working hard to establish related standards for the industry. The company has decided to make full use of digitization as it is beneficial to both corporates and customers and opens up more possibilities.
Mr Clerc believed the industry has already achieved higher standards than required by the International Maritime Organization in terms of sustainable development and carbon emissions reduction. He added that A.P. Moller – Maersk would fulfill more commitments in response to customers' requirements and expectations, resolving climate change and carbon emission issues gradually.
Chaired by Patrick Lau, Deputy Executive Director, HKTDC, speakers in the Power Dialogue session titled "Asian Connectivity under the “New Normal” included Grom Alexey Nikolaevich, CEO, Chairman of the Board, United Transport and Logistics Company – Eurasian Rail Alliance (UTLC ERA), and Zheng Shuangli, Director of Operations, Chengdu International Railway Port Investment & Development (Group) Co., Ltd. Mr Nikolaevich said the pandemic had shown that railway was the most reliable means of transport because of the absence of delays, and the present situation made this advantage obvious. His company had seen a significant increase in transport volume to 500,000 twenty-foot equivalent units (TEUs) this year, with an average of one railway service departing from mainland or European borders every 45 minutes.
WTO addresses industry recovery
Co-organized with The Hang Seng University of Hong Kong, the Closing Plenary session invited Yonov Frederick Agah, Deputy Director-General of the World Trade Organization (WTO), to share his views in a keynote address, “World Trade Organization Outlook for Charting Recovery”. The pandemic has severely impacted the global economy and daily life, with global trade dropping drastically, he said. Forecasts showed that the decline in global trade might exceed the drop resulting from the 2008 financial crisis. The impact of the pandemic on the logistics industry has been widespread, with global air-freight and ocean-freight volumes shrinking substantially amid land border closures, along with a halt to business travel that is crucial for connecting trade and managing global value chains. “There is an unusually high level of economic uncertainty right now. If the second wave of COVID-19 is better managed and vaccines are available soon, it could add three percentage points to trade growth,” said Dr Agah. “The pandemic has also accelerated economic and lifestyle changes, from working from home to booming e-commerce, that can accelerate trade reforms.”
Dr Agah’s address was followed by a series of panel discussions. Leaders from different sectors shared views on the topic "Leading Through a New Paradigm of Global Logistics Risks under Uncertain Trading Environment and Cyber Disruptions”, exploring the challenges confronting globalization in an era of geopolitical tensions and trade protectionism. “Better transport connectivity results in better trade and increased productivity. Intra-regional benefits from trade agreements have been bolstered further by the pandemic,” remarked Jan Hoffmann, Chief, Trade Logistics Branch, United Nations Conference on Trade and Development.
The conference hosted two Supply Chain Management Forums, covering “Adopting Automation, Robotics and AI in Logistics and Supply Chains” and “Shaking up Supply Chain Management from E-commerce to Social Commerce”. Power Dialogue sessions examined Asian connectivity under the new normal, the digitization of the supply chain, digital cargo and other topics. Launched last year, InnoTalks and MarketTalks both returned in 2020. The InnoTalks sessions featured innovative solutions to help conference participants keep abreast of technological developments in the logistics industry and generate new impetus in their business. MarketTalks featured key industry players from Mainland China, India, Malaysia, Thailand and the United Arab Emirates, who led attendees in exploring regional opportunities through logistics ecosystems.
The conference sessions are now available for viewing through video-on-demand on the ALMAC Online website until 17 December 2020.
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The Hong Kong Trade Development Council (HKTDC) is a statutory body established in 1966 to promote, assist and develop Hong Kong's trade. With 50 offices globally, including 13 in Mainland China, the HKTDC promotes Hong Kong as a two-way global investment and business hub. The HKTDC organises international exhibitions, conferences and business missions to create business opportunities for companies, particularly small and medium-sized enterprises (SMEs), in the mainland and international markets. The HKTDC also provides up-to-date market insights and product information via trade publications, research reports and digital news channels. For more information, please visit: www.hktdc.com/aboutus
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