• Sun
  • Oct 26, 2014
  • Updated: 12:36pm

Sector on the move

PUBLISHED : Saturday, 23 December, 2006, 12:00am
UPDATED : Saturday, 23 December, 2006, 12:00am
 

HONG KONG'S POSITION as the sole gateway to China is a thing of the past. Today, exports from the 'world's factory' are shipped through a wide range of ports and new airports.


Not only are there more alternatives, but port handling charges are cheaper on the mainland, allowing exporters to save up to a third on shipping costs.


As a result, market share of cargo shipped from the Pearl River Delta has slipped from


90 per cent to about 50 per cent, with growth stalling to marginal levels.


But Hong Kong remains a premier logistics hub, despite Singapore claiming the title of the world's busiest container port this year, with Shanghai and Shenzhen in third and fourth places.


On the strength of port rankings, some analysts have been quick to assume a down-trend in Hong Kong's logistics industry.


But if the logistics industry is declining, no one has noticed at Kerry Logistics, which was honoured as the most outstanding local operator in last year's inaugural Hong Kong Logistics Awards.


Newly rebranded as Kerry EAS Logistics, one of Hong Kong's biggest logistics providers, it provides a striking example of how statistics may tell one side of a story, but not all of it.


In stark contrast to Kwai Chung's declining cargo, Kerry's turnover leapt from just under HK$2billion in 1994 to top HK$5billion last year. This year it is expected to exceed HK$6.6billion.


This stunning growth is a result of Hong Kong's logistics industry doing what comes naturally - moving closer to its cargo and a vast new market.


Three years ago, Kerry Logistics bought into China's biggest logistics operation, EAS, inheriting a workforce of 4,000 and a network of 120 offices and more than 1,000 trucks. It is now the logistics leader in both Hong Kong and on the mainland, with a global network extending to 150 cities and 13 countries.


'In the past six years alone our global workforce has expanded from 2,000 to 6,000 full-time staff,' said Ivy Wong, head of human resources.


'We are a fast-growing company with many prospects for logistics professionals and a lot of chances for promotion.'


Kerry EAS Logistics is not alone in expanding into the mainland. With Hong Kong also overseeing South China and Macau operations, global logistics giant Kuehne + Nagel is booming with double-digit growth. The 600-strong workforce in Hong Kong is supplemented by 1,400 across the border.


One of the earliest logistics players to open a representative office in Beijing, and the first to be licensed by the Ministry of Commerce as being 100 per cent foreign-owned, Kuehne + Nagel has extended its China network to a total of 31 offices. The company plans to set up 10 more offices in the next 18 months.


'We don't see Hong Kong declining at all,' said Joerg Bull, managing director for Hong Kong, Macau and South China.


'We see an increase in business in Hong Kong and South China. We have ambitious targets for further development, with staff numbers increasing in both Hong Kong and on the mainland, as well as permanent job opportunities to cope with the increased demand.'


Especially sought after are managers and local specialists for China operations.


Market leaders such as Kerry EAS Logistics and Kuehne + Nagel's long-term recruitment drives in Hong Kong do not suggest an industry in decline.


Hong Kong's second-biggest port operator, Modern Terminals (MTL), recently announced it was taking a 65 per cent stake in the second phase of expanding Shenzhen's Dachan Bay container terminal, starting next year.


The plain fact is that Hong Kong largely runs the Pearl River Delta ports it is supposedly competing against, while Hong Kong is also well on the way to dominating China's logistics industry.


Meanwhile, logistics providers are migrating across the border. But like the multinationals relocating their manufacturing to the mainland's 'world factory', their operations are still largely run from Hong Kong.


So Hong Kong's logistics industry is not losing out to China at all. Quite the reverse, it is taking over in China, largely as a result of sophisticated state-of-the-art logistics expertise with global networks, the financial clout to expand, international-style management and its reputation as a reliable base from which to do business.


Hong Kong accounts for more than 100 of some 450 foreign freight forwarders in China.


Hong Kong Logistics Association chairman Raymond Leung Chi-man believes local operators are well placed to become 'major players' in China's relatively unstructured logistics industry - especially when it fully opens up to foreign competition over the next few years


in line with World


Trade Organisation commitments.


Opportunities are therefore abundant for anyone choosing to make


a career in the industry.


The only difference is that many are increasingly finding themselves based on the mainland.


Key players


Distribution / logistics manager


Freight forwarder


Port manager


Rail operations manager


Transport manager


Transport planner


Customer service manager


Warehouse manager


Systems designer


jargon


3PL Third-party logistics by specialist contractor


B/L Abbreviation for 'bill of lading', multi-use documents essential to conduct transport operations


Airside Airport movement of cargo to aircraft after security checks


Bonded Warehouse Warehouse authorised by Customs authorities for storing goods on which payment of duties is deferred until the goods are removed


ATM Air Transport Movement - for cargo shipped by air


CFS Container freight station, large and sophisticated warehousing system adapted to modern-day container shipments


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