Freight volumes between Hong Kong and China are gradually returning to normal. Mainland production is beginning to stabilize after weeks of freezing due to the Covid-19 outbreak. Data from Hong Kong Air Cargo Terminals Limited (Hactl) confirm that Hong Kong continues to facilitate imports and exports between China and the rest of the world, even though heavy flight cancellations remain in effect.
While volumes are gradually improving, predicting a lasting recovery remains difficult because large parts of the world face ongoing lockdowns. Airlines initially canceled over 200,000 flights to and from China due to the virus. Subsequently, the worldwide spread of the epidemic forced airlines to halt most operations elsewhere as well.
Hactl, Hong Kong’s largest independent cargo handler, noted that no restrictions currently block the movement of air goods from Hong Kong. Instead, cargo carriers are offering more air capacity to compensate for reduced passenger services. However, the overall picture remains complex. Chinese exports continue to fall because industries resumed work late. Despite this, traffic through Hong Kong appears to be increasing due to severe cuts in passenger flights and belly capacity.
Air freight shipments are growing as governments and businesses hurry to transport necessary medical supplies from China. Many operators argue that a clear transition from sea to air transport is underway. Importers around the world are taking urgent steps to replenish stocks after months of inactivity.
In January, freight transit volume at Hong Kong International Airport (HKIA) declined 10.4% year-on-year. This drop followed the closure of factories and businesses in mainland China during the Chinese New Year holidays. During this period, imports decreased by 15%, transhipments fell by 10%, and exports dropped by 9% due to the strong impact on Asian and North American traffic.
In February, volumes in Hong Kong dropped further by 8.9% due to the pandemic and the slow restart of mainland factories. This time, North American and European markets saw the most significant declines.
Overall, Hong Kong experienced a drop in traffic, but the numbers were better than expected. All sectors of the supply chain are attempting to restore global networks. Manufacturing activities in China have resumed and reached 80% capacity. However, the supply chain remains weak because the supply of parts and raw materials remains uncertain.
Currently, delays, supply chain interruptions, and order cancellations affect almost 95% of exported goods. Furthermore, freight rates surged by more than 30%, making services highly unreliable.
Since mainland China began its lockdown in late January, regional passenger traffic suffered first. This caused a severe failure in the belly capacity of passenger flights, which play a vital role within Asia. Long-haul charter flights, however, did not experience major disruptions.
At the beginning of March, the pandemic and subsequent global blockades forced Western buyers to freeze shipments and cancel orders. Many refused to collect arrived goods or requested longer credit periods. New orders remain weak, raising the risk of a further drop in the near future.
