Jun 2017

The changing shape of mail... and what it takes to grab a slice of this fast-growing market

Mail has always been a significant and lucrative element of the air cargo industry. Many years ago, one of the busiest (and most anxious) times in the carrier year was when the major postal contracts were due for re-negotiation.

Winning mail contracts on major routes made a huge difference to traffic levels and revenues; it was a high stakes game with big rewards.

Of course, the mail is still there today. But the dizzying growth of email, and its acceptance as a legally valid alternative to many traditional hard copy documents, has robbed the world’s postal services of their traditional mainstay traffic.

Today’s mail is of a different kind, and it literally takes a different shape: small packages. It’s all part of the global e-commerce revolution which touches every one of us. And it provides a few headaches for those involved in its transportation across continents.

A changing air cargo landscape

Part of the problem is the change in the air cargo industry landscape. Where ground handling was once performed by the airlines themselves, and most major carriers had their own handling facilities at their major gateways, the trend towards outsourcing handling which began in the 1990s is now universal.

As one result, airlines have gradually divested themselves of the in-house ground handling competence they once possessed. Handling today is seen less as an inherent part of their service, and more as an external process and cost. This has nurtured a reluctance to commit to large volumes of traffic that requires special handling, when the carrier may feel he has less than total control over the service he is selling.

This reluctance is particularly seen in the ballooning e-commerce sector that now makes up so much of all international mail. A large proportion of this traffic comprises electronic items, containing batteries. That, alone, is enough to strike fear into the heart of many an airline sales person!

Recognising the limitations faced by Chinese exporters using mail services – bottleneck on scanning process and restricted direct air services at many airports - Hacis now provides a viable alternative route for China’s e-commerce mail.

Restoring lucrative business to airlines

It was to facilitate such traffic, and restore lucrative business to its carrier customers, that Hacis entered into a service partnership with the postal authorities in February 2012. The partnership proved successful, and grew with an agreement to develop the business of handling mail shipments originating from China. In the years that have followed, Hacis’ well-developed operational model has enabled it to cater for the rapid growth of this business, and extend the coverage for mail shipments from the USA only, to worldwide.

Recognising the limitations faced by Chinese exporters using mail services – bottleneck on scanning process and restricted direct air services at many airports - Hacis now provides a viable alternative route for China’s e-commerce mail. It’s trucked over the border into Hong Kong, using a fast-track lane that avoids any queuing. At the Hacis facility, the trucks are unloaded, X-ray screened using state-of-the-art equipment, and cleared for carriage by air. The mail bags are sorted by destination, placed into ULDs under the direct supervision of the postal authorities (which have staff permanently stationed within Hacis) and loaded onto the flights by Hactl.

This major business did not come about by chance: Hacis proactively went to the aid of the postal authorities – identifying their challenges, and then working with Hactl’s airline customers to identify and secure the capacity needed to move the mail. Hacis then crafted a seamless, one-stop solution that took care of all processes and complied with all regulations

We’ve taken the headache out of carrying mail.

Vivien Lau

Managing Director of Hacis

Win-win for postal services and carriers

“We’ve taken the headache out of carrying mail,” says Vivien Lau, Managing Director of Hacis. “Many carriers want to carry mail, but are concerned about safety and security, given the frequent inclusion of items containing batteries. Hacis has provided a packaged service that enables them to confidently accept it again. It’s a win-win situation: the postal authorities can now move their growing e-commerce volumes, and the carriers handled by Hactl are gaining a new and attractive revenue stream."

”Air mail tonnage grew by around 25% in Hactl in 2016, underscoring its burgeoning importance to the air cargo industry. Today, Hacis has a large, dedicated mail team working around the clock, typically processing 1,000 mail bags daily; four years ago, it was little more than 10% of that figure. Now, Hacis is actively promoting the service to more of its airline customers and targeting realistic double-digit growth for 2017.

“It’s all about confidence,” adds Vivien. “We provide Hactl’s airline customers with a fully-compliant, trouble-free, all-inclusive mail service that they can confidently offer to the mail market. At the same time, we leverage the unrivalled capacity levels and range of destinations that Hactl’s carrier family collectively provides. We have everything the mail services need, under one roof.”

She concludes: “Hacis and Hong Kong provide a very strong proposition for handling mail. Our well-established partnership with the postal authorities, our core competences, and our successful 5 year track record in mail handling are combined with the unrivalled Hactl terminal facilities, and the comprehensive global network of its 100 airline customers and their 1,000 freight forwarder customers. This presents us with an exciting opportunity for the future development of Hong Kong International Airport as the definitive transit hub for mailed e-commerce shipments."