HACTL H ong Kong A ir C argo T erminals L imited

1. HACTLHong Kong Air Cargo Terminals Limited April 2011 R. Ho (A briefing to prepare SHCC students for visit to HACTL)

2. HACTL Overview • Background information • The significance of the air cargo business • What services HACTL offers to its customers • Cargo handling • Value-added services • Services on the Internet • The facilities in SuperTerminal 1 • Cargo handling • Special cargo handling • Customer interaction points • The Express Center • Security • The automated operations and driving technology • Glossary

3. HACTL Overview • World’s largest and the most technologically-advanced air cargo terminal operator • Located in SuperTerminal 1, HK International Airport, Chep Lap Kok • Also has a network of Inland Cargo Depots in southern China • (thru subsidiary Hong Kong Air Cargo Industry Services Limited (HACIS)) • Serving over 90 airlines and 1,000 freight forwarders • Operations began in 1976 at Kai Tak Airport • Cargo handling • 80% of Hong Kong’s air cargo • 70% of air cargo originated or destined for China • 1976 – 135,368 tonnes • 2010 – 3.35 million tonnes • (HK had a total of 4.1 million tonnes in 2010 per Airports Council International ACI)

4. HACTL Chep Lap Kok, Hong Kong

5. Hactl is jointly owned by four major corporations in Hong Kong. These are: Who owns HACTL?

6. Background • Why the air cargo industry is so significant? • A global business of approximately US$60 billion • Transports 35% of the value of goods traded internationally • A critical part of the airline business • The heart of a value chain that supports 32 million jobs and • US$3.5 trillion of economic activity • An important industry that is critical to global business • In 2010, the Hong Kong International Airport ranks #1 worldwide in the volume of air cargo handled ... a total of 4.1 million tonnes.

7. What services HACTL offers to customers • Physical cargo handling • General o Express o Perishable • Vulnerable o Dangerous o Valuable • Live animals o Outsized cargo o Mini shipment • Ramp handling • Aircraft loading and unloading • Load control • Flight operations • Crew administration • Crew transportation between aircraft and airport terminals • All documentation for ramp handling services

8. What services HACTL offers to customers (cont’d) • Import and export cargo documentation • Checking, accepting and issuing air waybills • Collecting charges • Processing manifests • Load estimates Import • Arrival notification • Document release • Customs clearance • Express discharge of special cargo

9. Other value-added services HACTL offers to customers • Import and export services • Clear customs for cargoes before they arrive • (PACCO – Pre-Arrival Customs Clearance) • Sort and breakdown cargoes for freight forwarders’ collection at pre-scheduled • time to reduce the forwarders’ waiting/transportation time and cost • Express handling of priority outbound cargoes for airline customers (HactlSpeed) • Provide X-ray and physical checking of cargo to ensure compliance with • the cargo security standards • Store and consolidate bulk cargoes before onward forwarding • Re-labelling and re-packaging • Assemble and release of approved empty Unit Load Devices (ULD) for collection by • freight operators to maximize the efficiency of the latter’s operation

10. Other value-added services HACTL offers to customers • Logistics services • Superlink China Direct Service (thru HACIS) • Link airlines and shippers from around the world to southern China • A seamless network of air-road and air-sea logistics systems • Provide cross-boundary truck services • Customs bonded consolidation trucks • Chartered trucks • Provide cross-boundary barge services • A Marine Cargo Terminal (MCT) at the HK Airport • 14,000 sq. meters • 450 meter of quay front for berthing • Minimum water depth of 4 feet • Support a number of barges at the same time • Air-sea coverage:

11. Other value-added services offered by HACTL to customers (cont’d) • Logistics services (cont’d) • Airport Direct service • Tailor make solutions for airlines and freight forwarders to ship goods • into HK to eliminate their hassle • Solution covers airport to warehouse • Warehousing & Processing • Customs Clearance • Physical Examination • Document Examination • Crane Lorry Hire • Delivery

12. Other value-added services offered by HACTL to customers (cont’d) • Accredited training services • Accredited by IATA (International Air Transport Association) to conduct • IATA Dangerous Goods Regulations (DGR) certification courses • These courses • meet ICAO technical instructions requirement on Safe Transport of • Dangerous Goods by Air • comply with the regulations of the Hong Kong Civil Aviation • Department

13. What services HACTL offers to customers over the Internet • Provide tools for customers to • Track their own cargo • Find out what is the storage charge of any shipment • Provide customers with guidelines and useful information over the Web: • How to collect cargo • How to ship cargo • IATA air cargo physical handling • International codes on everything from airline to airport • Unit Loading Device specifications, dimensions, weight for different • airlines • What items are prohibited in what airlines • Industry jargons • Links to worldwide public holidays, global time, local weather, local • traffic condition • Airline directory • Freight forwarder directory

14. Cargo Handling To handle cargo, HACTL has 7 airside interface areas; 1 dedicated for perishables and 4 with covers to protect cargo in adverse weather 28 cargo hoists to move ULDs between airside and workstations Over 300 workstations in the Main Terminal Building to build up and break down cargoes for import and export Over 140 truck docks to deliver and collect bulk cargoes and linked to the Box Storage System (BSS); Over 50 truck docks equipped with scissor lifts for pre-packed cargoes

15. Special cargo handling • Perishable goods • Dedicated customs examinations facilities to allow for fast release of goods • Direct airside interface for prompt handling of cargo • More than 40 truck docks dedicated for fast collection and delivery of • perishables • Dangerous and radioactive goods • Advanced fire prevention facilities • Tight access control system • 3 dangerous goods stores licensed to handle dangerous goods • from Category 2 to Category 9 • 1 radioactive goods store for storing radioactive goods • Personnel licensed and trained to handle dangerous goods • Refrigerated cargo • Dedicated facilities to help cargoes stay fresh • A bulk cargo refrigeration centre with a total floor area of over 750 sq. m. • A unitised cargo refrigeration centre with a capacity for 50 standard • Unit Loading Device (ULD) positions • 4 half-size ULD positions, the equivalent of one and a half B747 freighters

16. Special cargo handling (cont’d) • Valuable cargo • An ultra-secure, custom-designed centre to handle valuable cargo • Dedicated armoured vehicle zone for 9 vehicles • Armoured vehicle docking facility for 4 armoured vehicles at any one time • Round-the-clock security checking by surveillance and monitoring systems • Live stock • 2 livestock rooms featuring • Temperature controlled environment • Wash-down/ grooming facilities • Dedicated area for release and acceptance of live animals • Mini-Shipment Centre • Located on the ground floor of the South Office Block for customers’ convenience • Accepts consignments of under 3 pieces and not more than 75 Kg in total • Outsized cargo • A twenty-foot container handling centre to handle outsized items such as • automobiles and aircraft engines • The Cargo Storage System can cater for 140 twenty-foot ULDs

17. Service Points HACTL provides the following facilities to customers and the airline community to speed up the cargo and document processes: Customer Service Hall for airlines and freight forwarders to hand in import/export documents, make payments and do enquiries Customs Inspection Hall for the Hong Kong Customs and Excise Department to conduct customs inspection on cargoes. Customs inspection facilities are also present in the Perishable Cargo Center and Express Center Office Space is provided to airlines, freight forwarders and government departments for communication purpose

18. The Express Center HACTL has a dedicated 2-storey Express Center to handle express cargo: • Over 40,000 square metres • Handling capacity of over 400,000 tonnes of express cargo a year • Dedicated customs clearance facility, allowing fast customs • clearance service • Designed to allow direct truck and airside access offering • maximum efficiency

19. Security HACTL has water-tight security: Over 1,000 close circuit TV (CCTV) to monitor activities in and outside SuperTerminal 1 from the Security Control Center 250 trained security guards to patron ramps and SuperTerminal 1 Security access control to entrances and exits of tenants restricted areas. Over 100 control panels.

20. The automated operations • Container Storage System (CSS) • Multi-floor • Direct and covered interface with the airside to transfer unit load • devices (ULD’s) from the tarmac straight into the system • Fully automated with more than 3,500 storage positions , • 12 computer-controlled stacker cranes to move cargo efficiently • Link with workstations in the terminal by 72 overhead bridges • located on 2/F, 3/F and 4/F • Box Storage System (BSS) • Computer-controlled storage positions for cargo awaiting import, • export and transhipment in one location • 2 parallel BSS with some 10,000 storage positions • Each system has 6 aisles and 2 stacker cranes in each aisle to • provide fail-safe back-up • Directly linked to the Customs Examination Hall to facilitate • efficient cargo retrieval for customs personnel • A customs-bonded area with maximum security

21. The automated operations (cont’d) • Bulk Cargo Distribution System (BCDS) • A computer controlled 'sushi-bar' style conveyor loop system • to move cargoes between floors and over 300 workstations • within the Main Terminal Building • Direct linkage to Customs Examination Hall, Workstations and • Import and Export Truck docks • Workstations • More than 300 computer-controlled general workstations on • 3/F and 4/F of SuperTerminal 1 for build-up and breakdown of • import and export ULDS.

22. The driving technology The COSAC “Community System for Air Cargo” • A home-grown system • Drives every procedure of the cargo handling operations • Links airlines, freight forwarders, government authorities, customs, shippers • and consignees with a common database, allowing them to • exchange information • track cargo • clear customs • generate neutral air waybill • receive automated notification • access cargo information

23. The driving technology (cont’d) The Hex “Hacis E-Logistics Xystem” • An e-logistics platform designed to facilitate cargo information flow along the supply chain • A warehouse and order management system – down to the air waybill level • Provides cargo status in real-time – connects to COSAC • Displays complete inventory records including discrepancies and damaged • cargo; information of cargo carried by individual trucks • Lists GPS summary for SuperLink China Direct and local consignments • while in transit • Provides cargo tonnage statistics and reports

24. Glossary • Some acronyms and terminology • IATA – International Air Transport Association • ULD – Unit Loading Devices • Air Waybill number – to identify a cargo • RAR – Regulated Agent Regime – a security standard on cargoes • PACCO – Pre-Arrival Customs Clearance • Mini shipment – no more than 3 pieces per consignment and under (or equal) • 75 kilograms in total • Outsized cargo – examples are automobile, aircraft engines • Twenty-foot container for the outsized cargoes

25. Some food for thought..... • Is HACTL an organization you like to work in? • Would you like to be a strategic planning personnel or a manager on the shop • floor? Why? • Are there other positions in the company you’d like to work in? Name them. • What do you think are the challenges in each of these jobs? • Do you know what qualifies you for these jobs? • What is your plan to acquire these skills and qualifications? • What do you think are the challenges HACTL and/or the Hong Kong air cargo • industry is facing? • If you were to overcome these challenges for HACTL or the HK air cargo • industry, what would you do?