RISING TO THE CHALLENGE
Taoyuan International Airport was one of the fastest growing cargo hubs in Asia-Pacific in 2018, writes Joe Bates.
Having climbed its way into the top five busiest cargo gateways in Asia-Pacific in the last year, Taoyuan International Airport (TPE) is determined to stay there by enhancing its services and facilities to ensure the even faster and more efficient handling of freight shipments.
Without doubt, 2018 was a good year for TPE, which in handling a record 2.3 million tonnes of freight (+2.4%) overtook Tokyo Narita to become the region’s fifth biggest and fastest growing Top 5 cargo hub.
Operator, Taoyuan International Airport Corporation (TIAC), attributes last year’s upturn in volumes to a “reshuffling of the supply chain” which saw a significant increase in the number of goods being manufactured in Southeast Asia, as opposed to China, and shipped through TPE.
The change in dynamics meant that although exports from Chinese Taipei were down, imports grew and TPE handled more transfer shipments than ever before, particularly cross-border e-commerce consignments, many of which were handled at TPE’s state-of-the-art Express Handling Unit.
In terms of dedicated freight facilities, TPE has four cargo terminals operated by TACT (a subsidiary of China Airlines); EGAC (Eva Air’s cargo subsidiary); Farglory FTZ; and Everterminal Co Ltd (Everter) respectively, which between them are capable of handling around 2.6 million tons of import, export and transfer cargo annually.
The airport is also served by integrators FedEx, UPS and DHL, which boast their own on-site facilities, while TIAS and EGAS provide ground handling services for cargo operations.
TPE’s long-term cargo development plans include proposals to open a huge new cargo area with bonded warehouses for cross border logistics on a 48-hectare site and a second Free Trade Zone on land yet to be acquired by TIAC as part of its highly ambitious Taoyuan Aerotropolis project.
But it is not resting on its laurels until then as TIAC is currently working with TACT and Taipei Customs to jointly develop a new automated e-commerce handling area which is expected to be ready within two years.
It previously worked with EGAC to expand its e-commerce trans-shipment area and Jimmy Liu, deputy director of TPE’s Cargo Department, admits that more improvements might be need to ensure that TPE is equipped to cope with the continued rise in demand for e-commerce shipments.
“It’s not an easy task for us to meet the enormous rise in demand from the e-commerce industry because ideally they require dedicated, high-efficiency facilities with sizeable working spaces,” says Liu.
He notes that the airport is also working hard to make improvements to existing processes and procedures in a bid to speed up handling times to meet the needs of shippers while also fulfilling government security and customs requirements.
TIAC’s ultimate goal is for TPE to become the leading gateway for e-commerce shipments between ASEAN countries and the US and between Australia/New Zealand and Europe.
Another growing trend at Taoyuan International Airport is the rise in demand for temperature controlled products ranging from fresh fruit and cut flowers to pharmaceuticals.
In fact such is the demand for pharma products that the airport formed the Taoyuan Cargo Community last year and began working with IATA to conduct CEIV training in order for TPE’s different cargo operators to gain CEIV Pharma certification.
China Airlines is the first to become IATA CEIV Pharma certified while the process is still ongoing for the other five companies in the Taoyuan Cargo Community – Taiwan Air Cargo Terminal Limited (TACT); Eva Airways; Evergreen Air Cargo Services Corp (EGAC); Evergreen Airline Services Corp; and Farglory Free Trade Zone Corp.
Liu notes that the accreditation process is important as IATA expects biopharma sales globally to grow by up to 5% per annum from 2020, a trend that will result in cold chain logistics spending growing fastest in Asia and North America.
“We expect some positive feedback and cargo traffic from the industry once our cool chain facilities are significantly improved,” says Liu.
Despite all the good news, Liu anticipates that 2019 will be a tough year for TPE and most of the region’s big cargo hitters due to the negative impact of the trade war between China and US.
He notes that TPE could be hit particularly hard as TIAC has invested a lot of effort on extending its route network to Mainland China, which now extends to 458 weekly flights to 54 destinations.
And his fears appear to be justified at the moment as cargo volumes at TPE in the first five months of this year are 7.5% down to 856,457 tonnes, compared to the same period a year ago.
“If the trade war persists, cargo traffic with China will be inevitably lessened,” says Liu, noting that in response to the dispute, Taipei’s Civil Aeronautics Administration is working with the country’s national carriers to extend their route networks to ASEAN countries south of Chinese Taipei.
“We are aware that some of the supply chains are moving to ASEAN countries as a back-up plan for the concerning trade war, and this potentially presents us with some new opportunities for trans-shipment traffic due to our geographical location at the centre of East Asia,” enthuses Liu.