Multinational consortium hopes technological precedent will provide opportunities in other markets If it strikes you as odd that a consortium of the globe's leading technology companies, with combined profits that annually reach into the tens of billions, would propose to operate a not-for-profit digital trade transport network (DTTN), you're not alone. While companies such as Microsoft and Cisco Systems are to be admired for some of the traits that propelled them to the tops of their respective fields, an altruistic drive for the common good is not one of them. So when a high-powered consortium such as that led by Electronic Data Systems throws its weight behind a community model of DTTN that ploughs profits back into the industry, it's probably for a good reason. The community model is the best for Hong Kong because it will most closely deliver the operational requirements of Accenture's $5 million DTTN report: neutrality, openness and transparency. The winner of Hong Kong's DTTN award will be paid market value for building the technical environment, and the government may also outsource day-to-day operations to the firm. But the real value for any group building a community DTTN for Hong Kong is that it is an unprecedented project. As such, the formula will have unprecedented marketing and sales potential in those countries/regions that wish to follow the example. Also, as multinationals, groups such as Descartes and PCCW have many clients already in the Hong Kong logistics industry that will benefit from more efficient trade management here. Even outside a pure transport service logistics industry, some southern branches of China Customs already use Microsoft applications and would benefit from being connected to the world's most vibrant logistics hub. The neutral management of a community model is its key, but so is the accessibility brought by the lower cost of a not-for-profit model. It would bring small and medium-sized enterprises into the technology loop. For example, the black hole for technology in the local logistics industry has long been the hard-working trucker. But if the DTTN is constructed as Accenture envisions, a mobile phone is all a cross-border trucker will need to be part of the network. A trucker stuck in traffic in Dongguan with a vessel departure at Kwai Chung would be able to rebook a space and later departure time, and notify the exporter, importer and Customs authorities - all on his mobile. The network would help relieve border and gate congestion at the terminals, improve space utilisation levels for carriers, and inject a higher degree of predictability, and therefore efficiency, into south China's supply chain. Those watching the emergence of the DTTN realise operational neutrality will come at a cost. A state-owned community model will probably require more cash from the government; the private sector can hardly be expected to foot the lion's share of the bill for a project they won't control or turn a direct profit from. The benefits from improvements in operational efficiency are expected to save the logistics industry $11.8 billion over its first 17 years, according to Accenture's report, which the government says is its basic framework. But those kinds of intangible benefits - those not attributable on balance sheets to specific deals - are usually scoffed at by prudent shareholders when asked to approve spending. So it is becoming increasingly clear that if the government wants a high degree of operational neutrality in Hong Kong's DTTN, it will have to buy it; the degree of the DTTN's neutrality will be largely proportional to the state capital invested in it. It is hardly surprising that the e-logistics project team was perplexed by the not-for-profit community models in recent presentations. Community models are unprecedented in Hong Kong's business community. In many respects, a community model is a brave new world for Hong Kong - kind of like the DTTN. And given that it is a world where the flow of US$400 billion a year in goods can be managed online, it is somewhere Hong Kong should stake its claim.