No Major Rate Swings Expected For Air Cargo Amid Protests At Hong Kong Airport

As protests continue at Hong Kong International Airport (HKIA), the disruption has not caused major delays in air cargo shipments or dramatic increases in rates, experts told FreightWaves.

Protests at Hong Kong's airport continued on Tuesday, August 13, causing a second day of mayhem for travelers at one of the world's busiest hubs. Hundreds of departing passenger flights were canceled. 

Most air cargo shipments at Hong Kong airport have not been affected by the cancelled flights and protests. 

Hong Kong International Airport was the busiest air cargo hub in the world last year, handling 5.1 million metric tons of cargo in 2018, according to Airports Council International.

"I'm told most of the freighter-dominant carriers are unaffected," said Peter Stallion, air cargo derivatives broker at Freight Investor Services. "However, most of the passenger aircraft are affected."

Air cargo is in its low season with most freighters still running smoothly. The continued cancellations probably will not have a catastrophic effect on cargo, freight forwarders said. 

Brian Wu, chairman of the Hong Kong Association of Freight Forwarding, stated, "since it is not the peak season at this moment, I hope the backlog will be relieved very soon."

However, air freight shipments scheduled as belly cargo on passenger flights is taking a hit. 

Cathay Pacific, Hong Kong's flagship carrier, cancelled flights Tuesday and advised passengers to postpone all non-essential travel because of the anti-government demonstrations

"It is a pretty dire situation for Cathay, which has a lot of freight scheduled to leave Hong Kong," Stallion said. "I can't really assume too much regarding prices; some of the mainland Chinese airports will pick up a bit more cargo as a result. However, it is really up to the carriers to see how they want to play with the spot rates."

Stallion also said it would not seem to make sense "for the Shanghai rates to sink lower given the immediate situation out of Hong Kong." 

DHL, which uses HKIA as a major hub with both freighters and bellyhold cargo, stated "DHL's business divisions operating in Hong Kong have business contingency plans in place to minimize impact to our operations and customers. We are closely monitoring the situation, with staff safety and maintaining quality services as our top priorities."

The Hong Kong protests began more than two months ago against a Chinese extradition bill. It has expanded into calls for democratic reforms. Hong Kong authorities have denounced the demonstrators as rioters.

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