Hong Kong logistics companies are proving their resilience to tough competition, surging fuel prices and economic woes afflicting the North American market.
'I am pretty optimistic about logistics services in Hong Kong and South China,' said Walther Nahr, vice-chairman of the Hong Kong Association of Freight Forwarding and Logistics (Haffa). 'From what we see demand from customers is still growing on the export side.'
He attributed this in part to buyers in the United States and elsewhere changing shipment terms from free on board (FOB) to delivered duty paid (DDP). The net result was that, rather than running their own shipping departments, these companies were leaving suppliers to arrange everything related to transport and delivery. And they were appointing third-party service providers with an international network and the scope of operations to handle everything from bar coding and shrink wrapping to online tracking, customs clearance and a choice of sea and air freight connections.
'Fashion houses, for example, are saying to their suppliers 'you get this from the factory to the store or DC [distribution centre] overseas',' Mr Nahr said.
He said it was encouraging to see the government's plans to establish a dedicated facility in the Kwai Chung area for small and medium-sized logistics companies. This would make it easier to co-ordinate different services at one location and was definitely 'a move in the right direction'.
Despite the somewhat gloomy forecasts emanating from other quarters, Mr Nahr, who is also corporate vice-president of AGI Logistics (HK), said there was no reason to be downbeat about prospects for this year. Overall export volumes, which largely determined the health of the local logistics sector, were still growing, and even if the annual rate of expansion for air and ocean traffic was no longer in double digits, anything close to a 5 per cent yearly increase was impressive.
He noted too that, even though there were signs of a slight slowdown in the United States economy, if you judged things by the recent cargo statistics, there was no indication of recession, and business to Europe was well on track.