International cargo companies beef up services, to rake in greater dividends in GBA

The Guangdong-Hong Kong-Macao Greater Bay Area (GBA), a region with robust economic vitality and the highest degree of openness in China, is witnessing a growingly extensive, interconnected transportation network, supported by government policies.

On Thursday, a long-awaited three-runway system at Hong Kong International Airport was inaugurated, a milestone in enhancing the port city's position as a leading global transportation and shipping hub.

By around 2035, the Hong Kong airport is expected to increase its passenger handling capacity by 50 percent from the current standard, reaching an annual capacity of handling 120 million passengers, while its cargo volume will double from 5 million tons to 10 million tons.

Cargo companies in the region revealed that connectivity and integration among the GBA cities will continue to improve, which will generate more opportunities in the region and sustain its prosperity.

Experts said that the economically dynamic GBA region is now home to a massive manufacturing sector. Additionally, cross-border e-commerce, cold chain logistics, and technological innovation have driven both cargo volume and the development of logistics in the GBA.

Transportation hub

"GBA is a crucial hub for cargo. I think one of the key reasons for that is really a key manufacturing hub for China. If you look at Hong Kong's exports, what is shipped out of Hong Kong is not trans-shipment, it's not imports. Actually, over 90 percent of that comes from the GBA's manufacturers in the GBA," Mark Watts, Chief Operating Officer of Cathay Cargo Terminal told the Global Times in a recent interview.

For a long time, Cathay has been driving closer air connection between GBA and the world via the Hong Kong Special Administrative Region (SAR), with more flights linking Guangzhou and other major cities in the region. Lately, a trucking network operated by Cathay Cargo went into operation.

"It means we can pick up cargo from all sorts of destinations in the GBA region and ship them across the border efficiently into Hong Kong International Airport, and then ship them out into the rest of the world," he said.

The opening of the Hong Kong-Zhuhai-Macao Bridge years ago also presents good opportunities to bring fresh perishable cargo from the western part of the GBA into Hong Kong and to the rest of the world, he added.

Cathay's own data showed that, by the end of October, there was a 10.4-percent increase in cargo throughput so far this year if compared with last year on Cathay Cargo.

Such comments came amid the background as the Chinese government is taking concrete measures to lift the connectivity.

The Shenzhen-Zhongshan Link, a massive cross-sea passage in South China that features two bridges, two artificial islands, and an underwater tunnel, had recorded over 10 million vehicle trips by October 25 since its opening on June 30, or a daily average of 84,700 vehicle trips, data from Guangdong's transport department showed.

The Shenzhen-Zhongshan Link is another large-scale infrastructure project in the GBA, following the construction of the Hong Kong-Zhuhai-Macao Bridge, which is located approximately 31 kilometers south of the new passage.

Comprising the Hong Kong SAR, the Macao SAR, and nine major cities in the Pearl River Delta led by Shenzhen and Guangzhou, the GBA is rapidly becoming a global economic powerhouse.

The total economic output of the GBA exceeded 14 trillion yuan ($1.93 trillion) in 2023, accounting for one-ninth of China's total, but with only 0.6 percent of the country's landmass, local authorities have revealed, according to the Xinhua News Agency.

The GDP of the GBA region is equivalent to that of many medium-sized developed economies such as Italy. It is one of the most economically dynamic and open regions in China, Financial Secretary of the HKSAR government Paul Chan said at the Guangdong-Hong Kong-Macao Greater Bay Area Listed Companies Summit 2024 on November 25.

Future opportunities

The GBA has made noticeable progress in enhancing the connectivity of infrastructure projects, creating a robust transportation and information sharing network that has accelerated the formation of a "one-hour living circle" there, Wang Guowen, director of the center for logistics and supply chain management at the China Development Institute, a Shenzhen-based think tank, told the Global Times on Monday.

The integration of the logistics sector in the GBA, spurred by improved transportation infrastructure, has opened up new possibilities, Wang said, adding that the region's strategic location and thriving manufacturing make it a very attractive hub for international investors and traders.

The booming trade in the region has boosted market demand for modern logistics, which propels the rapid development of the services sector there.

"We have cargo, shipped in from Europe, America, China, Southeast Asia, and other regions. We will see more growth in different areas in this region. For example, China and Southeast Asia are very much integrated in e-commerce and high-tech electronic goods," said Watts from Cathay Cargo Terminal.

The GBA has become one of the critical leverages for FedEx's business development. Infrastructure development, service capacity enhancement, smart and sustainable supply chains have been the pillars that support the company's growth momentum in this region, according to information FedEx sent to the Global Times.

FedEx has been developing in tandem with China's thriving market. The company has established and continued to expand and improve its network infrastructure in Guangzhou, Shenzhen, and Hong Kong. In March this year, it completed upgrades to its gateway facility in Shenzhen, one of China's most enterprising cities.

"As transportation infrastructure becomes increasingly sophisticated and cross-border customs clearance becomes more efficient, the logistics industry in the GBA has shown its great potential, which helps strengthen the region's industrial competitiveness," Wang noted.