'Cross-docking' facility would apply finishing touches to mainland shipments DHL Express may add to its portfolio of Hong Kong logistics facilities by building a consolidation and distribution centre in Tsing Yi, catering to the increasingly complex needs of the vehicle, electronics and fashion industries. Kelly Yu, DHL general manager for Hong Kong, said it was 'highly probable' it would proceed with the project in Tsing Yi, an ideal location due to its proximity to the port, airport and highways to south China's manufacturing heartland. 'I think DHL has shown that if it's a viable economic proposition, we are willing to take the risks,' Mr Yu said. 'We did that with our spare-part management concept and we reaped the rewards - more than 25 companies ... signed on.' Mr Yu offered few details on the project, which he described as a 'cross-docking' facility, other than to say it would be a 'meaningful' size. Another senior executive within the DHL group yesterday described the project as still being a 'primitive' concept but conceded that Tsing Yi had been earmarked as a suitable location. DHL yesterday released its Pearl River Delta Supply Chain Study, which echoed earlier reports in finding that the comparatively high cost of moving goods through Hong Kong continued to jeopardise its role as the gateway to south China's retail production centres. As with recent studies on the maritime trade sector, the report - conducted by the Chinese University's Centre of Cyber Logistics - found higher trucking costs were eroding Hong Kong's competitiveness as a conduit for air freight. Trucking a 5,000kg shipment direct from the delta was about $1,600 cheaper. But the study also turned its sights on the high terminal handling charges at the airport, finding that it cost $6,000 to send a 5,000kg shipment through the cargo centres at Chek Lap Kok. 'If you are shipping a smaller shipment then the terminal fees may not make that much difference,' said Professor Cheung Waiman, who led the research. 'But if you are moving larger shipments, the terminal handling charge becomes a greater disincentive than the trucking costs.' The study found opportunities for Hong Kong's logistics industry in providing 'cross-docking' service centres such as the one being vetted by DHL. Such facilities typically are involved in last-minute, value-adding activities such as sorting, labelling, bar-coding, spare-parts assembly and putting the finishing touches on high-fashion garments. Some of these activities require advanced infrastructure and a skilled workforce. But, often more importantly, they also allow exporters to fulfil manufacturing requirements that help them to exploit Hong Kong's comparatively lower profit taxes - 17 per cent against 40 per cent on the mainland. The report also suggested that specialised cargo-handling centres, such as for perishables like flowers and seafood, would be another area of opportunity. 'The objective is to offer comprehensive services which can offset the relatively higher cost of shipping through Hong Kong,' said Mr Yu. 'If we leave things as they are, more and more of the cargo will go direct from China.'