Trumping logistics challenges in HK

Well-positioned HK

According to Mark Millar, a thought leader and popular speaker, moderator and chairman at various international conferences, despite the global economic challenges, Hong Kong seems well positioned to continue demonstrating its leadership in logistics, thus empowering global commerce.

The world-class infrastructure and free port status are significant ingredients in Hong Kong's enduring success as a leading logistics hub. Long established as a regional trading hub and global sourcing center, "trade and logistics" is the largest of Hong Kong's four economic pillars, accounting for 24.1 percent of GDP and 24 percent of employment.

The import and export trade employs over 440,000 people, more than any other business sector. In 2012, Hong Kong International Airport (HKIA) handled over four million tons of air freight, maintaining its global leadership as the world's largest air-cargo hub, whilst the container port maintained its global number three ranking, handling 23 million teu (twenty foot equivalent) of containers. A teu is a standard unit for describing a ship’s capacity.

HAFFA wants greater priority for logistics

The Hongkong Association of Freight Forwarding and Logistics Ltd (HAFFA) urged the government to give higher priority to solving the logistics industry's challenges.

Regarding HAFFA's proposals to the government, the first is related to Global Security Compliance and it wants the government to facilitate investment in and building of the airfreight container freight station (CFS) warehouse facilities for the industry, particularly for small- and medium-sized enterprises (SMEs) at Hong Kong International Airport (HKIA) or at a site close to it to give immediate access to time-critical logistics businesses.

Besides proposing the government approach the US and the EU to expedite mutual recognition to address cargo security and facilitation, HAFFA also wants the government to initiate and host an open, stable, secure and trusted common e-Platform to facilitate trade information flow along the city's entire supply chain, and to establish a secured e-link to the world, to cope with the impending global trend of e-freight and other international requirements (e.g. WCO and International Civil Aviation Organization - ICAO).

The existence of the common e-Platform will greatly enhance the IT capability of small players, increase productivity and save costs as this is the holistic total supply chain approach, which in turn will benefit Hong Kong's overall economy and demonstrate that the city is indeed a leading e-freight force in the world.

Regarding HAFFA's third proposal to introduce a Transshipment Ordinance, Chairman Paul Tsui says: "While Hong Kong is positioning itself as a regional transshipment hub and a gateway for South China, we are gravely concerned that there is no Transshipment Ordinance, but only the Import and Export Ordinance in place. Only shipments with through-waybills are considered transshipments.

"This rigidity of the Import and Export Ordinance does not allow any transshipments be broken down for partial re-export to different on-forwarding destinations. As a result, shipments are required to be declared as import or export within 14 days and this leads to the bearing of the cost of stamp duties. This makes the regional distribution center (RDC) type of warehouse operations very expensive to run.

"Consequently, we are losing out to Singapore and gradually to the various Bonded Ports in China like Guangzhou, which are positioned to imitate the free-port status of Hong Kong," Tsui says.

HAFFA's fourth proposal is to establish a "Co-location Customs Clearance" mechanism at a bonded area in which Hong Kong freight forwarding and logistics companies can perform customs brokerage for all import cargoes to the mainland.

The 345-member association, which was established in 1966, is responsible for setting industry standards as well as providing educational courses which enhance the professional standards of the freight forwarders and logistics providers in Hong Kong.