Freight ground handler Shanghai Pudong Int'l Airport Cargo Terminal Co., Ltd. (PACTL) is eager to set up subsidiaries at other Chinese airports or even abroad to foster its growth. Investments in under serviced locations outside the company’s home turf are part of the strategy.
In fact, the first step to set PACTL’s footprint outside of Shanghai has already been taken: on December 28, 2016, executives of the Sino-German ground-handling agent signed a contract with
officials of Nantong Xingdong Airport, in China’s Jiangsu province, to set up a joint venture named PACTL Nantong. Despite the fact that the place isn’t really the navel of the aviation world, it
is an investment that seems to make sense.
Firstly, because of China’s rapidly growing air traffic sector, that promises fast rising passenger and cargo figures not only at relevant hubs like Beijing, Guangzhou or Shanghai, but also at secondary locations of the Nantong category. After all, around 7.8 million inhabitants live in the city located a stone’s throw away from Shanghai, separated only by the Yangtze River.
Secondly, the move could pay off in due time since PACTL Nantong is the only local provider of ground handling services at NTG, this way enjoying a comparatively comfortable position.
Strong cargo growth predicted
There, work starts practically from scratch measured by the fact that in 2016, only 29,000 tons of cargo/mail were handled, a rather unimpressive figure. However, things seem to pick up fast, with throughput leaping almost 50 percent, reaching 43,000 tons this year, estimates Christian Haug, PACT’s VP Production, IT, Sales and Marketing. In the years ahead, the manager expects a continuous rise of volumes, speaking of “70,000 tons we plan to process in 2019.”
Christian adds to this that narrow body freighters contribute 70 percent of the current freight consignments handled at NTG while the difference is flown in or out in the holds of passenger aircraft.
NTG as testing ground
What Xingdong Airport still misses are international connections. So far, all flights are operated on domestic routes, except for a single service to Thailand.
Leaving this traffic aspect aside it seems that the PACTL Nantong JV is turning into a testing ground, gaining the status as model for similar projects at other airports. Manager Haug confirms: “We eye locations both within and outside China, like Southeast Asia, Europe and America.” Important flanking conditions are needed to take this step and avoid pitfalls: “Political stability must be given as well as a cultural environment that fits PACTL’s business, and the market must offer growth perspectives.”
Asked about the organizational layout he says that PACTL prefers establishing joint ventures with local airport operators, airlines, and/or logistics service providers, all depending on given circumstances.
Keeping eyes wide open
Takeovers are not part of PACTL’s expansion plans, he stresses.
He does not reveal which airports are standing on his company’s shortlist for investing into ground handling services. “We keep our eyes wide open,” is all he says. Christian also refrains from commenting on any specific timeframe for setting up the next joint venture following the Nantong investment.
Paperless era starts soon
PACTL was incepted in 1999 by the three shareholders Shanghai Airport Group (51%), Lufthansa Cargo (29%) and forwarding agent JHJ Logistics Management (20%). Last year, the agent handled 1.7 million tons of cargo at Pudong International, an increase of 5 percent to 2015.
As of this summer, PACTL will introduce their ePlatform, an electronic tool that fully dispenses with traditional paperwork in air freight.