Modern international trade would be impossible without the extensive transport networks and supply chain services provided by the global logistics industry. With the introduction of new technology, those services continue to get more sophisticated, giving Hong Kong the chance to maintain a vital competitive edge within the sector.
Danny Chan, managing director of BAX Global for Hong Kong and Southern China, expects the industry to keep evolving. "The mainland's strong economic growth and Hong Kong's position as a gateway to Southern China mean that the prospects for logistics are definitely good," he says.
Mr Chan believes that the implementation of high-tech solutions has pushed the industry forward. These developments have helped to meet ever-increasing customer demands, and made Hong Kong, together with Singapore, the leading logistics hub in Asia.
He notes that the company has made a considerable investment in IT and has R&D centres in Dongguan, Nanjing and Singapore. One ongoing project is the introduction of RFID (radio frequency identification). This will make it possible to "tag" individual items with a small device and subsequently track them until they are safely delivered to the final receiver.
Besides that, a new loading optimisation system will soon be launched. The programme will use information about airline services and goods for shipment to determine the optimal route and alternative costs to deliver cargo. It will take account of customer requirements concerning things such as lead time, urgency and cost parameters.
Around HK$1.5 million has been invested on this programme but, according to Mr Chan, it will prove to be very effective in terms of the shipment booking efficiency and cost control.
The company's other high-tech tools for managing the supply chain include "Exceeds" for inventory control and "Apollo" for online tracking and event management. They also have a comprehensive security system with GPS-enabled trucks, remote accessible CCTV, motion detectors and perimeter alarms. The intention is to comply with the highest international standards and, in particular, with C-TPAT (Customs-Trade Partnership Against Terrorism).
However, being equipped in this way is a major advantage in attracting customers who want their inventory expertly managed from the point of production in China, but do not want to incur the expense or taxes involved in setting up their own facilities.
Mr Chan adds that for Hong Kong to maintain a leading position, it is essential to devote sufficient resources to staff development. BAX therefore has a management development programme to provide the necessary technical knowledge and soft skills. They also plan to launch a similar scheme for sales staff, which will promote all-round abilities.
Meanwhile, headcount has grown from 300 to the current figure of almost 700 in little more than three years. Catherine Tam, regional human resources director for North East Asia, expects a further 15 to 20 per cent increase in numbers for Hong Kong and Southern China in 2006.
She points out that middle to senior managers with relevant experience are in short supply. Whenever possible, however, the company encourages promotion from within. She also emphasises that behaviour and core competencies are an important element in the selection and development process. Ms Tam highlights that younger recruits should be energetic, enthusiastic and ready to become part of a learning culture.
Pros and cons for Hong Kong's logistics sector
- Strong mainland economy
- Strategic position for China
- Technologically advanced
- Unrestricted trade
- Simple and transparent customs procedures
Essential qualities for logistics professionals
- High rental charges
- High labour costs
- Rise of global oil prices
- Perceived lack of government support
- Limited supply of available land
- Have passion for the business and show initiative
- Good communication and presentation skills
- Willing to learn and commit to self-development
- Professional qualification or relevant degree
- Preferably five years' experience or above