What impact could the Hong Kong protests have on supply chains?
Hundreds of flights at Hong Kong International Airport were cancelled earlier this week amidst political protests, which became violet. Yesterday saw a resuming of operations, but not because the protesters demands have been met, rather due to stricter security in the airport terminals.
So what impact might this have on the global supply chain?
Hong Kong International Airport is the busiest cargo hub in the world. Last year it handled 5.1 million metric tons of cargo. The hub serves as a major transition point for intra-Asia flights, as well as Transpacific travel between Asia and North America.
Hong Kong has also played a vital role in serving manufacturing hubs in Southeast Asia, which have grown in light of the ongoing trade war between the U.S. and China.
Even though only passenger flights were affected by the protests, about 40% of air cargo volume through Hong Kong still goes in the belly of the planes.
Since the disruptions are relatively localized and contained within the belly air cargo, in the short term, the protests won’t have a significant impact on air freight capacity. Shippers and freight forwarders would likely look to reroute belly cargo onto freighters, which in turn could strain capacity on freighter flights. That could also result in rolled cargo due to a lack of available supply.
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