This year’s Asia Logistics and Maritime Conference (ALMC 2017) is devoting six sessions aimed specifically at logistics. From the Belt and Road Initiative to supply-chain management; from online shopping to niche services such as halal and food and beverage logistics, ALMC 2017 (Hong Kong Convention and Exhibition Centre 23-24 November 2017) is the event that all logistics providers should attend. Book your place now: http://www.hktdc.com/ncs/almc2017/en/s/part-details.html
Meanwhile, discover below why Hong Kong is North Asia’s premier logistics centre.
Hong Kong’s position at the heart of global logistics has never been more critical than now as it builds on traditional strengths while evolving to meet the needs of the new world of e-commerce and faster-paced shipments.
The freight forwarding industry has helped make Hong Kong one of the world’s most trade-oriented economies, with the city ranking globally as the 8th largest merchandise trading entity in 2015.
The industry is responding to customers’ needs by providing more value-added services such as warehousing, packing, sorting, distribution, total logistics and supply chain management solutions.
Meanwhile, as the logistics industry becomes more digitized, the city is at the forefront of efforts to develop innovative new ways of meeting the needs of the new digital world. These efforts are being led by a host of new startup companies that are exploring new ways of doing things.
These include companies that provide customized delivery and logistics solutions for smaller and niche businesses as well as others that handle Storage, Piece-pick and shipping for the same SME market, meeting the needs of the smaller entrepreneurs that make up a large part of the new digital economy, and providing services that previously were only offered by large third party logistics providers to other large companies.
Many of these companies have started their operations in Hong Kong, but are using the city as a base to expand to the region as well as entering the Chinese market.
Of course this does not detract from the city’s essential role as a logistics hub for the Asia Pacific region and super-connector between Mainland China and the rest of the world.
Geography and electronic networks
Hong Kong’s advantages as a well-connected city with a long history of being an accessible port of entry to China as well as Northeast and Southeast Asia remain relevant in an increasingly interconnected and digitized world. With its unique geographical location and well-developed economy and infrastructure it remains the springboard from which companies can reach the region and beyond.
World’s No 1 airport
The logistics industry has benefited from its world-class infrastructure. Total freight handled in 2016, amounted to some 283m tonnes, and Hong Kong International Airport (HKIA) tops the world in terms of international air cargo throughput, while Hong Kong Port is the world’s sixth busiest container port.
In 2016, there were 1,314 air cargo forwarders and 2,272 sea cargo forwarders both employing over 17,000 people each. Total seaborne freight amounted to 164m tonnes while 4.5m tonnes of airfreight was moved during the same period.
Hong Kong is within five hours flight of major Asian cities and half of the world’s population. Connectivity is among the best, with more than 100 airlines operating about 1,100 flights daily, linking the HKIA to about 190 destinations worldwide including about 40 on the Chinese mainland. Excellent air connectivity enables same-day shipments to major Asian cities and to Europe within the next day.
Airfreight, particularly for high-value, time-sensitive products, remains a key part of the logistics industry, with intra-Asia load factors rising. The sector has grown as a proportion of Hong Kong’s trade over the years, and accounted for 38% and 43% of Hong Kong’s total exports and imports in 2016. In value terms airfreight exports reached HK$1.36trn while imports totalled HK$1.72 trn.
One of the world’s busiest container ports
Hong Kong remains one of the world’s top container ports. About 70 shipping lines provide over 350 container line services per week, connecting Hong Kong to more than 510 destinations worldwide. Hong Kong’s container terminals offer some of the most efficient transshipment services in the world.
Hong Kong thrives in its role as gateway to Mainland China and constantly seeks to improve. The use of the latest technology such as automated storage/retrieval and distribution systems enables timely, precise and efficient distribution to various regions.
Many of the top multinational logistics companies have operations in Hong Kong and bring global connections with them. With their international expertise and connections, they can help mainland enterprises find solutions to export their products to a global market. For example, goods can be consolidated in Hong Kong for onward transportation by air and vice-versa.
Likewise, with enhancements under the Closer Economic Partnership Agreement between Hong Kong and the mainland, further liberalization of services trade is expected to boost the city’s position as a logistics hub.
Essentially, Hong Kong companies are now able to set up wholly-owned subsidiaries on the mainland to provide a range of services from freight forwarding and marine transport to road freight.
Leveraging on its traditional close commercial ties with Mainland China, especially with the Pearl River Delta manufacturing hub, Hong Kong is working to boost cooperation further with its plans to develop the Greater Pearl River Delta region.
Key cross-border infrastructure projects such as the Guangzhou-Shenzhen-Hong Kong Express Rail Link and the Hong Kong-Zhuhai-Macau Bridge will cut the travel time between Hong Kong and neighbouring cities like Shenzhen and Guangzhou.
The completion of these infrastructure projects in the Greater Pearl River Delta will boost the flow of capital, people, goods and services. For example, travel time from HKIA to Zhuhai will be cut from four hours to about 45 minutes, which will help boost cargo flow from the region’s western reaches.
Looking further afield, Hong Kong also has a pivotal role to play in China’s Belt and Road initiative, where its connectivity once again can help ease business for the import-export sectors. For example, among the approximately 60 countries involved in the programme, Hong Kong has marine cargo movements with 45 of them, and air services agreements or international air transit agreements with 40.
Hong Kong has worked hard to achieve its position as one of the world’s top logistics hubs. However it is not resting on its laurels and continues to innovate as well as make other improvements to ensure it keeps its lead.