Dear HAFFA Members, 

Over the past year, our economy and people’s livelihoods continue to hit hard by the pandemic as Hong Kong reached a critical point in its fight against coronavirus in March. The Association welcomes the Government’s measures, particularly the many businesses including Members facing liquidity constraints, the additional financial relief measures will be a lifeline in the coming months. Employment Support Scheme, HK$10,000 per targeted citizens, reducing profits tax, waiving business registration fees, utilities and rates, will ease some of their burden. However, the biggest hurdle remains the closure of our borders.  We believe that dealing with the current outbreak is the number one priority, but as soon as the situation is under control together with ideal level of vaccination, the border reopening will be a key common goal and the beginning of the path back to normality.  You may see all industry-related pandemic e-updates through our dedicated COVID-19 corner.  The Association has worked tirelessly to reflect Members’ voices at Government-level consultation meetings as you can see our efforts being made in this annual report including sub-committee reports.

BREAKTHOUGHS– WE FOUGHT FOR MEMBERS SUCCESSFULLY!!

(1)      CAD’s Regulated Cargo Fuel Surcharge (CFS)Mechanism Extended to 30 June 2024

For many years the CAD’s CFS mechanism provided a regulated fuel index-based price adjustment system which enabled the industry to make precise provisions for fluctuations in fuel prices. The removal of the such mechanism would leave our industry without a regulated system to accommodate fluctuations in oil prices. HAFFA being the only Association expressed to CAD our strong objection to the removal of CFS mechanism and detailed its highly-adverse impact on the aviation industry and the serious repercussions it created.  With the system set to expire soon on 30June 2022, HAFFA has been liaising closely with Government officials and officially wrote to THB to urge for its continuation. This is to protect the interests of Members and uphold the HAFFA position. There were many tough discussions with various stakeholders.  HAFFA again successfully fought for Members as we are gratified to learn that the Government heard and responded positively to our concerns, and announced on16 March 2022 that the Government decided to impose a moratorium on the liberalization of CFS for two years, i.e. between 1 July 2022 and 30 June 2024.The arrangement for airlines to levy cargo fuel surcharge based on the current CFS Mechanism of the CAD for flights originating from Hong Kong will be extended to the end of June 2024.

(2)   Revised Mechanism of Handling Deficiencies Committed by RA / RACSF

(3)      Implementation of Enhanced Control, Surveillance and Inspection Measures for Safe Transport of Dangerous Goods by Air

Last year CAD first brought out a proposal of tightening the deficiency handling mechanism under the RAR and RACSF Scheme in view of the implementation of the ICAO 2021 Policy being an international requirement with effect from 01July 2021. Later another CAD proposal of further enhancing the effectiveness of the control and surveillance DG measures was issued.  It remains a key role of HAFFA to represent Members’ interests especially in the area of cargo operations; concerns received are treated constructively and HAFFA then counter proposed other enhanced measures with a view to striking a balance between the aviation security and safeguarding the room of survival for Members.  About point (2), we submitted the letter to CAD on 25 May 2021, a face-to-face meeting with CAD was conducted on 28 May2021 for views exchange. HAFFA successfully fought for Members that CAD has taken into consideration our suggestions and revised the handling mechanism for deficiencies committed by RA / RACSF.  About point (3), one of CAD’s original proposed ideas regarding 100% check at individual package/parcel level was changed to Random Check at individual package level, this was achieved after HAFFA liaised with CAD to strive for Members’ interest in the adjustment to the existing Scheme in order to gain a balance between safety and the operational needs.

(4)      IATA to collect 1 BG to cover sales under both CASS Import & Export in Hong Kong

IATA Central BG (bank guarantee) only covered CASS Export shipments. Therefore, subject to individual airline’s policy, IATA Agents is required to submit a separate BG to individual airline for Import shipments in case they would like to continue enjoying credit with effect from 01 July 2021. However, previously forwarders only need to submit 1 BG to the airlines to cover both Export and Import shipments. Hence, HAFFA raised concerns to IATA over such change as it may result in more bank fee and administrative burden.  HAFFA successfully fought for Members that IATA and Airlines have taken into consideration our proposal which was adopted by the IATA CASS Policy Group (CPG), for IATA to collect 1 BG to cover sales of both CASS Export & Import in Hong Kong.

Taking this opportunity, we would like to thank Members for a number of milestone events:

(I)      HAFFA Annual General Meeting 2021

The first-ever HAFFA AGM on-line election was successfully held on 22April 2021 with a high participation rate of 93% from registered Voters, a big thanks for Members’ support to the Association who took time out from their busy schedule to participate in the on-line voting.  The e-AGM also voted for the new HAFFA Executive Committee, to welcome some new/familiar faces which will no doubt further invigorate the work of HAFFA with their fresh expertise and diversity, that will be integral to strengthen HAFFA going forward and ensure it remains a relevant, professional and dynamic organization.

(II)   HAFFA Annual Luncheon 2021

The 21st HAFFA Annual Luncheon for the Senior Executives under “Vaccine Bubble” arrangement was successfully held on 9December 2021. With the tremendous and enthusiastic support from Members and industry fellows, we thanked them for making our luncheon a record-breaking event on many levels, and a memorable experience at that. The luncheon sold out very fast and it hit a new record of 140 seats. What’s even more impressive was the diversity of the audience that came from all across Members, Airlines, Cargo Terminal Operators, Airport Authority Hong Kong and others. All joined our event for a fabulous time of networking. We are very glad to receive good feedbacks as they see HAFFA as a strong and united forwarders community! 

(III)  HAFFA’s opinions are widely reported by the media

Over the past year, the resilience that distinguishes Hong Kong’s forwarders and logistics service providers has again been put to the test. As leaders in the cargo supply chain, HAFFA Members play a vital role in helping raise the level of business confidence and in 2021, there was a record-breaking of 12.5%growth in air freight (5,026,000 Tonnes)! As a major contributor to the SAR’s GDP, and designated one of Hong Kong’s Four Key Industries, the strength of the trading and logistics sector is of vital importance to the economic prosperity of the city. The 14th Five Year Plan expressly supports Hong Kong in developing high value-added maritime services, and enhancing its status as an International Aviation Hub (first FYP to specifically mention Hong Kong’s reinforced role as IAH).  While the COVID-19 epidemic has greatly increased the demand for air transportation, HAFFA was invited by the media for a record-breaking number of interviews on various issues. In making comments, I adopt a factual, objective approach with the interest of HAFFA members being our first priority. 

https://www.haffa.com.hk/portal/Page/Index.aspx?id=5

For details of the above, and the activities of the many sub-committees, please refer to the solid reports in the annual report. We welcome Members to share their opinions/ suggestions with us, members of the HAFFA Committee and secretariat, which we shall do our best to reflect to the Government as HAFFA will continue to play an effective role as the bond and bridge between Government, trade bodies and our Members. 

The coming months of 2022 will be a very challenging time for us all as we are facing unprecedented pressures from fluctuating pandemic.  Due to increasing COVID-19 cases among the Hong Kong truck drivers, the Shenzhen Government Port of Entry and Exit Office has, since mid-February 2022, issued a series of tough measures on cross-border truck operations, resulting in severe shortage of trucking capacity. Since the implementation of a new rule where the drivers have only been allowed to pick up goods at designated border checkpoints from mid-March 2022, our business has plummeted by 30% - 50% and the airport’s late-March data also showed that the cargo volume has decreased by around 30% compared with the same period last year. 

Even some Members have diverted cargo to the water routes, due to its high cost, low efficiency, and complicated customs clearance procedures, this alternative is in fact not a viable solution. More importantly, the problems of high cost and long processing time have caused 30% of shippers chose to export their goods directly from the Mainland China, that has adversely impacted Hong Kong’s status as a regional logistics hub. As we know, cross-border trucking is the lifeblood of our airfreight industry. HAFFA has actively channeled our views to the THB and the Liaison Office of the Central People’s Government in the HKSAR(中聯辦)since February 2022. On 4 April 2022, HAFFA joined with Hon. Frankie Yick (Legislative Councilor under Transport Constituency) and 8 other industrial bodies to organize an online Press Conference, urging the Government to address the issues and gave recommendations such as implement a closed-loop arrangement for Hong Kong cross-border truckers in order to boost mainland authorities’ confidence. In an exceptional time, the Government should take a forward-looking approach to reviewing and enhancing Hong Kong’s operating environment. and revive the lifeblood of our airfreight industry.  Many media attended the online press conference.

Trust our Members would maintain close communications with their carriers and shippers, and keep themselves up-to-date on the market situation through HAFFA News, news and business reports.  The best way we can move forward is by supporting one another in unity and sharing our insights so as to protect businesses, protect jobs and help people cope with adversity under the impact of COVID-19 on supply and demand chains. 

Last but not least, HAFFA presented our views to the authorities and forged ever closer relationships, in particular with THB, CAD, AAHK, TDC, Customs, IATA, FIATA and FAPAA. we hope to continue work together in UNITY preventing, mitigating and resolving the issues will be key to maintaining trust – with Government, shippers, carriers, CTOs and all stakeholders to make new contributions to the sustained development of the international freight forwarding industry in Hong Kong, in the Asia Pacific Region and indeed throughout the world.  I would like to express my pride and appreciation for the strong support we have received from you and every HAFFA Member, the most devoted HAFFA Committee Members, the secretariat staff, our Government and industry partners.