Picking up the pieces for logistics players

Wong suggests that Hong Kong can consider making the existing Hong Kong Maritime and Port Board a statutory body. "If there is such a statutory body, it can liaise with similar mainland organizations in promoting the integrated development of the sea freight sector. It may also offer policy incentives for promoting container and business operations of the sea freight trade, attracting shipping companies to relocate their businesses back to Hong Kong, and nurturing industry talents."

Ip warns that the performance disparity in Hong Kong's aviation and shipping operations could result in a "winner-take-all" scenario, where talents and resources in the logistics sector turn to aviation, and the shipping segment is left out in the cold.
"The perception of shipping has to be changed, with greater efforts needed to promote the development of high value-added maritime services. Stronger partnerships have to be built among local academic institutions, industry organizations and nonlocal institutions to provide clear career development paths and industry-relevant skills," Ip suggests.

As for reducing operating costs, Ho says Hong Kong should mull easing current restrictions on cross-boundary land transport, such as allowing mainland trailers to transport goods to Hong Kong to cut costs. "The average cost of each container handled at Hong Kong container port is HK$2,000 ($250). This is higher than that charged by mainland container ports due to the cost of cross-boundary land transport and the handling fee levied by Hong Kong's container port."

In his view, logistics players need to be green, smart and innovative. Hong Kong's container ports are mainly controlled by private enterprises, and when they hesitate to invest in port technology, the city's container port would be less competitive than mainland and overseas ports in terms of digitalization. The problem is that Hong Kong does not have a statutory maritime port authority to propel the digitalization of port operations. "Industry stakeholders would like the government to take the lead in driving the digitalization of port administration. The success rate would not be high if ports are controlled by private companies. Hence, the government should consider taking a mandatory approach," says Ho.

The decline in Hong Kong's container throughput can be attributed to various factors, such as manufacturing activities gradually being relocated out of the mainland, thus curtailing vessel-to-vessel transshipments through Hong Kong; port authorities, such as Yantian and Nansha in the GBA, actively adopting policies to attract shipping companies to dock their vessels at their terminals; Hong Kong lagging behind in developing freight railways; the city's high logistics operation costs; and the negative effect the COVID-19 pandemic had created on land transport between the city and the mainland.

Contact the writer at oswald@chinadailyhk.com