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Transport Hub Meets 21st-Century Needs ( Transport, Courier & Logistics )(HKTDC Hong Kong Trade Services, Vol 01,2001)

Vol 1, 2001



Transport Hub Meets 21st-Century Needs

Easy Flow Of Goods

On The Move


Transport Hub Meets 21st-Century Needs

Hong Kong is frequently the world's busiest sea-cargo centre.

ALTHOUGH blessed with a natural deep-water harbour and other geographical advantages, Hong Kong relies on innovation and ingenuity to remain a world-class centre serving the needs of SMEs in terms of transport, cargo-handling and logistics.

Hong Kong Airport Authority general manager for planning and coordination Dora Kay vows to capture more high-value, time-sensitive air freight by continuing to develop the Hong Kong International Airport as a multi-modal hub.

One new initiative is a marine-cargo terminal to handle bulk or container-laden barges from 18 ports in the Pearl River Delta. "Goods are conveniently shipped directly from a plant to the airport. Savings in time and cost are very attractive," says Kay. A high-speed passenger ferry service is also planned.

Another air-cargo initiative is the first in a series of low-rise, high-ceiling warehouse, storage and logistics centres still under construction.

The airport serves as a solutions integrator. "We stay in close contact with all transport players and with respective government departments and organizations interested in trade and commerce. Our development as an air-cargo centre is bound to market needs: namely, shippers and buyers."

Hong Kong Dragon Airlines Ltd offers SMEs a wide range of cargo services between Hong Kong and the Chinese mainland. An Internet tracking facility can allow clients to access the most up-to-date information on their shipments.

Dragonair chief executive officer Stanley Hui is bullish on the Chinese mainland's entry to the World Trade Organization (WTO). "It seems at last that the Chinese mainland can realize its true potential as an economic powerhouse. Dragonair is well placed for the growth opportunities this will bring."

Among courier services, DHL Int'l Hong Kong Ltd is implementing a massive 10-year infrastructure plan to cope with expected increased business.

In 2000, DHL opened a Central Asia hub facility that occupies 6,200 square metres at Hong Kong Int'l Airport and is the nerve centre of its Asian Air Network.

"In June 2001, at a cost of US$10m, we opened a 100,000-square-foot Kowloon Central Service Centre. This is the largest of its kind in Hong Kong with capacity to process up to 16,000 shipments per hour," says DHL general manager Kelly Yu.

Hong Kong has the world's busiest sea-trade infrastructure, also important to SMEs.

Hong Kong Container Terminal Operators Association chairman Eric Ip expects the Port Community System (PCS) developed by the Kwai Chung Container Terminal Operators to enhance information flow and exchange.

DHL Int'l Hong Kong Ltd has a 10-year infrastructure plan to cope with expected new business.
Before the end of 2001, PCS should swing into operation. "Strongly supported by government, it will improve the efficiency of business and technology processes at Kwai Chung, enhancing benefits to the port community, transport industry and Hong Kong," Ip says.

PCS recognizes that SMEs lack capital and manpower for complicated transportation procedures. "It improves transparency and efficiency. Through the Internet, relatively small shippers can fully update themselves on sailing schedules, status of shipments and other transportation matters. This gives them access to data now available only to firms operating their own large computer systems. We see PCS becoming a one-stop-shop for all shippers," Ip enthuses.

Another plus is sailing frequency. "Hong Kong sailings are 10 times more frequent than those from Pearl River Delta ports. Goods arriving in the morning can be shipped that afternoon or the next day, and SMEs can process bank documents much faster. Our customs clearance procedures are efficient, and it is easier to follow shipment progress and handle legal or insurance-related claims."

The Chinese mainland's entry into the WTO should enhance two-way shipping. "Asia is a net exporter, and shipping lines must return empty containers to Hong Kong. When the mainland consumer market takes off, the number of containers passing through Hong Kong will increase and fewer empty boxes will return," Ip notes.

Rail is another crucial factor in Hong Kong's transport equation. Kowloon-Canton Railway Corp (KCRC) manager of intermodal freight Louise Ng says the KCRC expects an expanded role as a commercial facilitator.

The transport needs of SMEs helped inspire a rapidly- growing Hong Kong-based logistics industry.

Logistics Information Network Enterprise Ltd (LINE) chief executive Aaron Mak says Hong Kong, with its strategic location and slick infrastructure, is ideally positioned to serve an expanding e-logistics market.

"We work in a constantly evolving environment. Our challenge is to stay at the cutting edge of innovation in e-logistics. For SMEs, one emerging issue is access to technology, which is why most of our solutions are Web-based. SMEs do not need a large capital investment to streamline logistics processes. All they require are desktop computers, modems and Internet access," Mak says.

SMEs know they dare not wait for buyers to make the first move. "Suppliers understand they cannot operate in isolation. Margins are so thin a delayed shipment or change in order specifications could have dire consequences. By cooperating and sharing information, the whole community has better survival chances," Mak adds.



Easy Flow Of Goods

ANY discussion of supply chain management (SCM) leads to related issues, like bar coding, point-of-sale scanning, quick response or efficient consumer response. Danger lurks in any misconception that these are technologies strictly for big companies, that they are too expensive or that the training is too difficult.

"These new technologies and practices are long-term investment, a means of survival, a way to enhance competitiveness and not necessarily expensive," says Hong Kong Article Numbering Assn chief executive Anna Lin.

A typical supply chain involves material suppliers, manufacturers, distributors, retailers, logistics-service providers, government, banks and consumers. With SCM, trade partners along the supply chain work closely to move goods with minimum cost and time.

One HKANA study in 1996 found that SCM concepts led to savings for Hong Kong's domestic industry of up to HK$5bn, mainly from lower operating and inventory costs.

A study involving textiles, toys and consumer electronics in 1997 showed SCM practices and enabling technologies could shorten product-cycle times and that Hong Kong export industries could enjoy annual savings projected at HK$9.2bn.

Among the benefits are:

  • Time savings, improved efficiency, shorter lead times and
  • warehousing costs up to 25% lower;
  • Up to three times higher sales growth;
  • Savings on inventory, logistics and production;
  • Lower costs as fast, accurate global communications accelerate the trading cycle;
  • More on-time deliveries due to global distribution; and
  • Improved service and customer satisfaction.
  • Key SCM elements include electronic commerce, business-process improvement and business collaboration.

Moving Forward

THE process of shifting goods between locations, usually from manufacturers to consumers, is called logistics.

But as Sun Logistics Co Ltd executive assistant Jenny Wong says, logistics services involve "everything in supply-chain management", not merely transport.

Effective supply-chain management involves strategic and systematic provision of the precise merchandise customers need when they need it. Supply chains are becoming more complex and tightening all the time. Customers must buy closer to the market to take advantage of changing consumer trends and to minimize mark-down costs. Meeting such demands is a challenge, which is why the services of logistics specialists can prove valuable.

Hong Kong logistics enterprises offer established client networks, cutting-edge technology and a pivotal location. They create value-added services allowing clients to reduce inventory and purchasing staff, boost profits and secure supplies faster.

Outsourcing logistics can improve efficiency and heighten competitiveness through the use of expert staff and new technology like online order placing, auto-tracking and online inventory verification.

Sun Logistics focuses on Hong Kong with a reciprocal "share-network" extending to Shenzhen, Zhuhai and other areas on the Chinese mainland. Its value-added benefits include warehouse management, distribution, packaging, labeling and shrink-wrapping.

Another company, Power Logistics Ltd, serves Hong Kong, Taiwan and the Chinese mainland with value-added services like large-scale PC installation, set-up, invoicing and payment, all in a single visit.

Useful Contact(s)

The Hong Kong Article Numbering Assn
Tel: 2861-2819
Fax: 2861-2423
E-mail: info@hkana.org
Website: www.hkana.org

Hongkong Assn of Freight Forwarding Agents Ltd
Tel: 2796-3121
Fax: 2796-3719, 2754-8926
E-mail: enquiry@haffa.com.hk
Website: www.haffa.com.hk

Hong Kong CFS and Logistics Assn Ltd
Tel: 2409-5271
Fax: 2480-1041
E-mail: joansiu@sagawa-hk.com

Hong Kong Container Terminal Operators Assn Ltd
Tel: 3126-9471
Fax: 3126-9472
E-mail: enquiry@hkctoa.com
Website: www.hkctoa.com

The Hong Kong Int'l Courier Assn
Tel: 2400-3987
Fax: 2361-0860
E-mail: pcheung@hk.dhl.com

Hong Kong Logistics Assn
Tel: 2777-9656
Fax: 2900-6262
E-mail: secretary@hkla.org.hk
Website: www.hkla.org.hk

The Hong Kong Sea Transport Assn Ltd
Tel: 2544-9037
Fax: 2544-6104
E-mail: info@hkseatransport.com
Website: www.hkseatransport.com

The Hong Kong Shippers' Council
Tel: 2834-0010
Fax: 2891-9787
E-mail: shippers@hkshippers.org.hk
Website: www.hkshippers.org.hk

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