Logistics industry urges government for more support

Trade groups call for land supply to help city thrive as a regional hub in an industry seen as one of the four pillars of the economy

PUBLISHED : Tuesday, 30 October, 2012, 12:00am
UPDATED : Tuesday, 30 October, 2012, 4:25am

The government should give more support to the logistics sector if the city is to thrive as a regional distribution hub, industry trade groups say.

Their call comes amid growing industry concern that buildings in Kowloon used for logistics purposes are being demolished and the sites redeveloped as upmarket offices, putting further pressure on supply.

Dr Paul Tsui Hon-yan, the chairman of the Hong Kong Association of Freight Forwarding & Logistics, said the logistics industry had urged the government to consider releasing more land dedicated for logistic operations. But only two sites in Kwai Chung had been earmarked and tendered for development.

Tsui said both sites were being built as single rather than multiple-user projects, which only put more pressure on small and medium-sized logistics companies because they could not use the buildings.

He said that before the administration of Chief Executive Leung Chun-ying took office, the Transport and Housing Bureau was looking at other locations such as Tuen Mun to provide more land to the industry.

But "it looks like it was not able to get anything from Planning Department and Lands Department", he added.

Sunny Ho Lap-kee, the executive director of the Hong Kong Shippers' Council, said shipping and logistics, according to the government, was one of the four pillars of the Hong Kong economy and therefore it should be given adequate support. "Otherwise, Hong Kong's interest as a whole will be hurt."

Ho said there needed to be "commitment at the top and policy support in order to get more land for the industry".

He conceded that it was "a hurdle for the government to give favourable treatment for an industry, or sector of the economy, given the current political climate".

But he added: "If Hong Kong is designed to develop itself as a regional distribution hub, new infrastructure is needed."

While old industrial buildings were being lost, they could also barely meet the modern requirements of the industry, which needed high ceilings, big loading bays, lifts and sufficient truck parking, Ho said.

The comments came after Agility Logistics officially opened a new 13,000 square metre logistics centre in Tin Shui Wai that will act as a regional distribution centre across Asia for high-technology and retail companies.

James Gagne, Agility's chief executive for greater China, said it took more than a year for the company's logistics team to find a site for the complex.

The facility will be used to lure new business as well as consolidate operations from five other Agility locations in Hong Kong.

Gagne expects the centre, about 10 to 15 per cent full since the soft opening last month, to be 70-75 per cent full by the first quarter of next year.

He also said Hong Kong, as a free port, still offered advantages over the mainland for companies looking to set up a regional distribution centre. They included more connectivity to the region and few export restrictions, unlike the mainland, where there were customs issues despite free trade zones in places such as Shenzhen.

Ben Au Chung-kit, Agility's deputy general manager for domestic integrated logistics, said one electronics manufacturer in Dongguan was using the facility to store products.

When the gadgets were sold, technicians at the facility would load the latest software and make other technical enhancements to the product before shipping to the company's customer.

This offered a quicker and more cost-effective solution than doing it in Dongguan, Au said.