Twenty years young

posted on 11th September 2018

Two decades since opening, Hactl’s remarkable ‘SuperTerminal 1’ remains one of the world’s most advanced air cargo terminals. And the company is determined to keep it at the cutting edge, CEO Wilson Kwong tells Megan Ramsay

 

The fourth quarter of 2017 was a challenging period for air freight handling at several of Europe’s largest cargo airports, with bigger-than-expected volumes of traffic coupled with a shortage of labour and other complicating factors triggering congestion, backlogs and in some cases, operational chaos.
It seems extraordinary that this year is the 20th anniversary of the opening of Hong Kong Air Cargo Terminals Ltd’s ground-breaking US$1 billion ‘SuperTerminal 1’ facility, created to accommodate Hactl’s move to the brand-new, ‘greenfield’ Hong Kong Chek Lap Kok airport.
And 20 years on, it remains one of the most technically advanced and highest-capacity air cargo terminals in the world, according to the cargo handling specialist’s new CEO Wilson Kwong, who took over the reins in March, when former CEO Mark Whitehead retired.
Whitehead’s subsequent death just weeks into his retirement was a tremendously sad moment for Hactl, Hong Kong’s air cargo community, and for the industry. Whitehead had successfully steered Hactl through a difficult period that included the loss of the company’s shareholder and biggest customer, Cathay Pacific − which had also become a major cargo-handling competitor.
Having negotiated these challenges, the company is committed to looking forward and building on the strong legacy of the past, Kwong says.
“We can’t stand still; twenty years ago, Hactl opened a great facility. Now, it’s about how to continue to invest in it so that it will last us more than another 20 years,” Kwong notes.

Setting the standard
He believes the 395,000 sqm SuperTerminal 1 (ST1) and its accompanying infrastructure is not just an exceptionally strong foundation to build on, it has also set the standard for multi-storey, highly automated air cargo terminals around the world.
“When Hactl’s SuperTerminal 1 was opened in 1998, it was light years ahead of any other air cargo handling facility globally,” says Kwong. “The Sir Norman Foster architecture itself − incorporating viewing windows in our offices looking over the huge handling system, a partially glass roof to reduce lighting energy consumption, a sports facility and many other features − was unique. In the intervening years, it has been a must-see attraction for tens of thousands of visitors from all over the world: overseas representatives of our airline customers, other handlers, logistics students, and even members of foreign governments.”
These visits are a daily event, and ST1’s sheer scale and complexity never cease to impress, he says.
“Inevitably, some of those visitors have taken our ideas away with them. If you were designing a brand new cargo handling facility of any great size, it would be unwise to do so without first taking a look at what we have here in Hong Kong. So, today, some of our terminal’s design features are to be found in other handling facilities. We welcome that; we have always taken a leadership position in air cargo handling efficiency, and if others can adopt our ideas to the benefit of the wider air cargo industry, that is good for all of us.”
Hactl believes it has played the major role in putting Hong Kong where it is today, as the world’s number one air cargo hub – with SuperTerminal 1 having been a key factor in that.
“Remarkably, 20 years later, our terminal is probably still the most advanced in the industry – possibly with the exception of some integrator hubs, but that is because they need special features that are not necessary in general cargo handling,” says Kwong. “That is partly because it really was so revolutionary, but also because our programme of enhancements and upgrades is constant and never-ending.”
For example, Hactl is just finishing a two-year programme of totally replacing the IT systems that drive ST1’s Container Storage System (CSS) and Box Storage System (BSS) – the massive mechanical handling systems at the heart of SuperTerminal 1.
“The new IT systems are not only based on future-proof, scalable architecture, but also pave the way for greater automation and even use of artificial intelligence and machine learning,” Kwong says. “Right at this moment, our Performance Enhancement team – our innovation lab – is working on several projects, such as the installation of a new system to speed up location of loose cargo in our huge facility.”
Designed to handle 3.5 million tonnes of cargo per annum, ST1 has a 3,500-bay, multi-level container storage system, served by 40 fully automated driverless automated transfer vehicles, or ATVs (also variously known as ETVs − elevating transfer vehicles − or container cranes), with additional storage for 1,573 empty units. Unusually, Hactl’s ATVs are driverless and receive their commands from the CCS Logistics Control System, which determines which station they should park ULDs in, and then remembers this for retrieval.
Its six floors also include a 10,000-bay automated box-storage system for loose cargo, more than 466 pallet workstations, and 313 truck docks.
Besides its infrastructure for handling general cargo, ST1 has dedicated areas and facilities for processing livestock and bloodstock, perishables − for which there are 30 dedicated truck docks − valuables (with a dedicated zone for handling nine armoured vehicles simultaneously), and hazardous or radioactive cargo.
“SuperTerminal 1 is highly automated, enabling a level of productivity per capita that is beyond all but the very latest and largest facilities; it also combines this with a capacity that is still probably the largest of any facility worldwide,” notes Kwong. “So, it’s certainly in the top 5 (worldwide), but we believe it is still the overall number one. That is a huge testament to the vision of its designers, and to the hard work of those whose later innovations have helped maintain its technological lead.”

People power
But it is not just about the technology. Keeping all of this running smoothly are 2,400 “colleagues”. Having joined the Jardine Matheson Group in 1998, Kwong worked within Jardine Aviation Services, the Jardine Matheson Head Office, and Hongkong Land, before moving to his most-recent role as chief executive of Jardine Engineering Corporation. And Kwong says that in all his 20 years with Jardine, he has concluded that successful business “is all about people management”.
This means that foremost in his mind is the need to look after the whole Hactl team. “To manage an operation with 2,400 people in a highly automated system where we still need a lot of staff to move things around, this business is no different from others – it’s a people business,” he says.
One illustration of the company’s recognition of this is Hactl’s recent awards ceremony recognising employees with 20 years’ service – or longer. Each of these colleagues received a personalised gold medal. And Kwong notes that some employees have even been with the company since it began terminal operations way back in 1976.
He points out that Hactl is the only handler in Hong Kong to operate with a 100% salaried workforce – that is, not relying on manpower agencies on a day-to-day basis – and its staff turnover rate is “negligible”. This dedication contributes to high operating standards, as long-serving staff accumulate valuable experience, Kwong claims, adding: “Our 2,400 people are the real asset of Hactl.”
But the handler is not immune to the difficulties of attracting new blood. Kwong says: “Our biggest challenge at Hactl going forward is how to attract younger talent into the industry.”

Alternative resources
With Hong Kong’s unemployment rate currently standing at just 2.8%, the problem is not unique to air cargo, he says, although the airport environment and the requirement to work shifts in all weathers may put off young jobseekers – especially as a larger proportion of the population now opts for a university education.
Faced with this shift in attitudes, the solution is not just to improve staff retention − something Hactl already seems to have pretty much nailed. At some point, even the most loyal colleague will retire, and if younger recruits are not there to fill the gap, then the company must look elsewhere to ensure it can continue to provide the services its customers require.
Kwong is definitely of the camp that sees increased automation as a solution to the air cargo industry’s recruitment issue. But he is keen to point out that automation is not a means of enabling a mass reduction in the labour force.
“When we have fewer people coming into the trade, we have to look at alternatives,” he notes. “We need to ask how we can automate more of our processes,” with robotics, automated guided vehicles and driverless trucks being just some of the possibilities under consideration.
This will not happen overnight, of course. Some of these technologies are not yet properly suited to air cargo handling tasks. Robotic arms, for instance, may be able to perform repetitive functions in an automotive factory, but building up a pallet comprising items with different shapes and qualities, and that lack of uniformity makes pallet building a complex operation that robotic technology cannot yet carry out.
“When the technology advances, we will see what more we can do to leverage it in the terminal,” Kwong says.

Proactive upgrades
This is indicative of Hactl’s ongoing efforts to stay on top in an ever-changing world. The company carries out upgrades every year, for instance.
“It is important to keep on investing in upgrading the facilities,” Kwong notes. “The way we look at Hactl is threefold: facilities, which includes the various systems we have in place; the people; and the IT systems, which are the backbone of everything we do at ST1.
“Having a 20-year-old facility is fine so long as you keep upgrading it, investing in it and making sure it’s relevant and ahead of the game.”
Right now, Hactl is investing in its Logistics Control System, the IT system that controls ST1’s box storage system and container storage system. It is also upgrading one of its cargo elevators.

Evolving technology
Overall, ST1’s original design has served the company well, but the use of technology in fulfilling its functions has evolved dramatically over the last two decades.
Perhaps the most notable example is mobile telephony. “Twenty years ago our phones, if we had one, were not suited to do all the tasks we do now,” Kwong highlights. “Wifi technology has become very mature and therefore we can now put in QR codes here and there, and we are thinking of putting in RFID tags in various places to track where our goods are.”
This is an area that Hactl’s dedicated Performance Enhancement Team is investigating. The team’s sole purpose is to question current practices and find ways to improve on them, and the seven members of the group bring experience from backgrounds including engineering, information systems, and air cargo handling operations.
Already, Kwong says frontline employees communicate with each other and with the control centre via mobile phones or PDAs rather than the walkie-talkies or paper documents of the fairly recent past. Apps tell staff when goods are delivered and QR codes indicate the location of goods within the terminal.
“We also use big data to help us analyse trends to allocate truck docks, and decide where to deploy people and resources,” he adds. With over 2,000 trucks coming in and out of the facility each day, that data is vital in helping to ease congestion and maximise efficiency.
And then there’s virtual reality, which is used extensively in Hactl’s training courses to ensure employees know how to handle different types of aircraft that may not be physically present during a training event, and in different conditions − some of which may not occur frequently − before they get out onto the ramp to practise their skills.
Kwong believes robotics, artificial intelligence and autonomous guided vehicles will dominate industry discussions going forward. Other developments, such as the Internet of Things (IoT) or blockchain are also worth watching to see how they could benefit air cargo.

Maintaining a vision
While such technologies may revolutionise air cargo, what Kwong wants across the industry in the near future is much simpler – and yet, is proving very hard to achieve.
“I would definitely like to see higher utilisation of e-air waybills,” he explains. “As an industry, we are quite slow and one does wonder why.
“One of our departments handles air cargo documentation and there is a lot of paper, with many duplicates. We have to have a lot of people working on it. There is bound to be a better way of handling that documentation.”
Most importantly, he notes: “What I want is more standardisation in terms of the data we transmit. Once we do that, whether it’s the e-air waybill or whatever, data will flow more seamlessly and that will help everyone in the industry,” by minimising the human resources required to vet information, improving accuracy and enabling better systems integration within and between members of the global air cargo community.
Kwong says Hactl’s focus on technology, on constant investment, and on its people is in the company’s DNA: rather than waiting for a problem to arise, or for customers or regulators to prompt improvements, Hactl has always sought to be proactive – and that is unlikely to change.
“One has to be an optimist when in a leadership position,” he notes. “Of course, you always have to plan for different contingencies, but you must have a vision that the company will still exist and you know that in order to exist and to do well, these are the things you have to do – and that’s precisely what we’re doing right now.”