Amidst the bad news related to the economy that we have been hearing lately, it’s nice to note some occasional good news coming our way, especially when Texas is a key focal point.
On March 6, a new trade avenue opens when Cathay Pacific Airways launches its newest cargo route which will include stops at the George Bush Intercontinental Airport. The trip will emanate from Hong Kong and land in Anchorage, Miami, and Houston three times a week.
The new operation is designed to mine new markets for growth between Texas and Asia, an effort which is also being enhanced by improvements in the Panama Canal. Moreover, because of the Miami linkage, it will also create new synergies and more connections into the emerging markets in Central and South America.
Hong Kong is one of China’s most important international finance and trade centers, and this opportunity is projected to substantially advance Texas trade in that part of the world. Because of the increasingly complex linkages in the world, such initiatives are critical to the overall long-term progress of the Texas economy.
For several years, Texas (the nation’s leading export state) has sought to compete with California and ports in Mexico in cargo transportation by sea. Adding this air cargo service will expand the volume capacity for a variety of industries in the state while also complementing the traditional ship transportation efforts.
Groundbreaking was held in September for a new transportation terminal in Hong Kong to more effectively manage the expected increases in cargo shipments along with the variety of products. Cathay Pacific has also purchased several new fuel-efficient airplanes with greater cargo capacity and the capability of traveling longer distances.
By adding Anchorage, Miami, and Houston to its freight routes, Cathay Pacific Airways is expanding its US hubs beyond their current operations in New York, Chicago, Atlanta, Los Angeles, San Francisco, and Dallas-Fort Worth.
Miami, the eastern point on the new trade route, is the nation’s busiest airport for international cargo. Dallas/Fort Worth International Airport handles some 60% of all air cargo in Texas (48% of which is associated with Asian trade) and has been ranked as “The Best Cargo Airport in the World” by Air Cargo World. The George Bush Intercontinental Airport is already the 11th largest gateway in the US in terms of international air cargo. Approximately 23% of the cargo trade handled in this facility is related to commerce with Asian nations. In 2007 (latest data), air cargo trade between Houston and Hong Kong totaled more than $24 million. The Bush Cargo Center, which opened in 2003, is capable of handling up to 20 wide-body aircraft simultaneously.
Don’t expect miracles immediately. The economy is what it is, and global conditions have certainly impacted worldwide cargo shipments recently—eight consecutive months of contraction. Asia Pacific carriers, which handle approximately 43% of the world cargo market, reported a 28% year-on-year drop in February. European carriers experienced a 23% decline, while North American operations suffered a 19% loss. Even so, major firms continue to seek ways to boost operations and increase revenue through various commercial ventures, especially those that create stronger ties with potential major markets.
In this light, the new Hong Kong-Houston connection is quite significant. In addition to the anticipated potential for financial gain through this cooperative partnership, the timing of the new operation is important as it provides a much needed positive impetus during this unique economic slowdown, and secures a competitive advantage for decades to come.