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Logistics development: Enhancing the port's 'added value'

Willy Lin

Everyone in the industry should feel the dynamics of the Logistics Development Council by now. Over the past two months, numerous meetings have been conducted and proposals presented. Indeed, it was a moving moment to see prominent figures in the industry devoting their efforts to the unified goal of making Hong Kong the preferred logistics centre. It is a fine demonstration of team spirit and how the private and public sectors work together in Hong Kong to achieve a common aim. The Logistics Development

Council will meet for the second time on March 14 and details of the master action plan will be announced. I wish the Logistics Development Council every success.

However, while efforts are directed at providing 'added value' to users of the Hong Kong port, emphasis must also be placed on resolving the basic weaknesses of the port, i.e., the high operating costs. In January 2002, container throughput at Shenzhen ports increased 47%, which compares sharply with the -4% decrease at the Hong Kong port. Shippers are using the Shenzhen ports because of the lower haulage costs and Terminal Handling Charges. In Hong Kong, efforts must be made to bring down both. The Hong Kong Shippers' Council appeals to the shipping lines and container terminal operators to lower their charges which is critical for the continued success of the Hong Kong port. We cannot consider operational efficiency only but also costs. The Port of Singapore, where throughput is likely to be strained further this year as Evergreen Line has announced its shift to the PTP port in Malaysia, is a good illustration.

There is also constant debate on whether Hong Kong would perform best as both a physical hub and a virtual hub, or just the latter only. Our belief is that without cargo physically moving through Hong Kong, it would not take long for Hong Kong to lose its status as a cargo management centre. It may not be easy to rival Hong Kong's position as a financial centre, or as a professional services centre for legal, insurance, arbitration, etc. However, it is simply a fact that closer proximity to cargo operations means more effective logistics management. People and know-how could be very mobile too. Therefore, it is important to maintain cargo operations in Hong Kong if Hong Kong wishes to continue to be a logistics hub. Indeed, the free port status and a simple, well defined customs system have given Hong Kong special advantages in fulfilling this function. It is an important role that we should maintain and not give up.

In this light, we call for the speeding up of the implementation of the full 24-hour boundary crossing services for cargo; further simplification of the processing of trucks, drivers and cargo crossing the boundary; as well as construction of an expressway connecting Hong Kong with the Western Pearl River Delta. We also call for the improvement of facilities for private cars moving across the boundary. There have been a lot of discussions on these items lately and we hope our practical proposals would be put into practice soon.