Picking up the pieces for logistics players

Reviving shipping industry
Industry stakeholders and logistics experts agree that coordinated development, institutional revamp, nurturing talent, cutting costs and technological investment are needed to revive Hong Kong's sea freight business.

For coordinated development, Ho suggests that the central government coordinate with the SAR in preventing disorderly and wasteful expansion of container ports in the GBA. As low value-added manufacturing activities relocate to Southeast Asia and Mexico, the volume of international trade is not growing expeditiously as it has been in the past two or three decades, and the profits of many government-initiated port investments in the GBA are up in the air. "When cargo throughput at GBA container ports increases drastically, there will be vicious business competition. This is just a zero-sum game from the perspective of a region's port cluster. The issue here is how to prevent a waste of resources," Ho says.

Ip says the central government can help strengthen cooperation and form an alliance among Hong Kong and other GBA ports. "With coordinated development, the market mechanism would result in an efficient distribution of cargo and shipping transport prices."
Wong, who is also the director of HSU's Policy Research Institute of the Global Supply Chain, believes the SAR government and industry stakeholders can explore creating a statutory body to develop the maritime industry. He points to Hong Kong's air cargo industry already having a statutory body - the Airport Authority Hong Kong - as well as an international airport for boosting the air freight business in areas like talent cultivation, infrastructure development, technology application and airport operations.
"While Hong Kong Science Park nurtures technology startups, our shipping industry lacks the physical space for planning maritime development, advancing operation processes, and cultivating logistics technologies to accelerate the commercial operations and technological development of the shipping business," he says.