LCQ19: Helping logistics industry enhance competitiveness

     Following is a question by the Hon Chan Han-pan and a written reply by the Secretary for Transport and Logistics, Mr Lam Sai-hung, in the Legislative Council today (July 6):
     Amid the fifth wave of the Coronavirus Disease 2019 epidemic, Hong Kong's sea, land and air freight has been affected in varying degree. On the other hand, some members of the logistics industry are of the view that the Government should enhance the international competitiveness of Hong Kong's logistics industry. In this connection, will the Government inform this Council:
(1) whether new targeted measures are in place to assist cross-boundary freight vehicle drivers who have been affected by the fifth wave of the epidemic and have to stop working;
(2) as it is learnt that over the past two years, the epidemic has led to a standstill of the cross-boundary land freight and a loss in Hong Kong's transhipment business, whether the Government has put in place new measures to facilitate the recovery of the cross-boundary land freight sector;
(3) as it is learnt that Hong Kong's air freight volume has dropped substantially amid the epidemic, whether the Government has put in place new measures to enhance the competitiveness of Hong Kong's air freight sector; and
(4) whether, in the long run, the Government will comprehensively consolidate and enhance the logistics industry, including considering the relocation of the Kwai Tsing Container Terminals and driving the logistics industry to fully adopt automation technology, so as to enhance the international competitiveness of Hong Kong's logistics industry; if so, of the details and timetable; if not, the reasons for that?
     The Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Long-Range Objectives Through the Year 2035 (14th Five-Year Plan) clearly supports Hong Kong to enhance its role as an international maritime centre and international aviation hub, as well as supports the development of the Hong Kong's services sector towards a high-end and high value-added direction so as to integrate into the national development. The Outline Development Plan for Guangdong-Hong Kong-Macao Greater Bay Area also clearly states that Hong Kong's advantages as an international maritime centre should be leveraged to form a world-class port cluster and international maritime logistics hub with other Greater Bay Area (GBA) cities, and strengthen overall international competitiveness; Hong Kong's status as an international aviation hub should also be consolidated and enhanced.
     The Government attaches great importance to the development of the logistics industry, and has been enhancing Hong Kong's role as an important international aviation hub, international maritime centre and regional logistics hub through various policy initiatives. The Government fully understands that, under the fifth wave of the epidemic, cross-boundary logistics and the supply chain between Guangdong and Hong Kong have been interrupted, which has affected Hong Kong's cargo transhipment. The Government has been following up closely with the Mainland authorities to promote and implement various measures conducive to safeguarding and optimising the cross-boundary flow of goods, with a view to minimising the impact of the epidemic on cross-boundary logistics. At the same time, the Government will continue to promote various policy initiatives that will effectively facilitate the development of Hong Kong's air cargo, maritime and logistics industries, with a view to enhancing the competitiveness of Hong Kong's logistics industry.
     Our reply to the Hon Chan Han-pan's question is as follows:
(1) and (2) The Government fully understands the difficulties faced by the cross-boundary land transport sector under the persistent epidemic situation and the relevant anti-epidemic measures in both Guangdong and Hong Kong. Since the outbreak of the fifth wave of the epidemic, the Task Force on Supplies from the Mainland led by the Government has been working closely with the Mainland authorities to explore various measures to support the cross-boundary goods vehicle (XBGV) trade.  

     â€‹Under the fifth wave of the epidemic, many Hong Kong XBGV drivers have been temporarily removed from the exemption list by the Guangdong Provincial Government because of confirmed cases found in the buildings or housing estates where they live. In response to requests made by Hong Kong, the Mainland authorities shortened the duration of their removal from the exemption list to 14 days with effect from February 16, and narrowed the scope of removal from the exemption list from previously applicable to drivers living in at-risk areas to those living in buildings with confirmed cases. Moreover, XBGV drivers transporting fresh food with a negative nucleic acid test result in the Mainland can be exempted even if they live in buildings with confirmed cases. 
     To reduce the risk of epidemic transmission and to safeguard the smooth XBGV operation, the Transport Department (TD) has arranged for dedicated staff to conduct rapid antigen tests for XBGV drivers at various land boundary control points (BCPs) from February 28 onwards, and only drivers with a negative result are allowed to enter the Mainland. In order to further improve the accuracy of the tests, the TD has already switched to rapid nucleic acid tests at the BCPs, with the sampling method for rapid nucleic acid tests further changed to nasopharyngeal swabs starting from April 21.
     Besides, to support the most hard-hit XBGV trade, the Government provided a one-off non-accountable subsidy of $10,000 to registered Hong Kong XBGV drivers and owners respectively under the sixth round of the Anti-epidemic Fund, so as to help them cope with the current difficult operating environment.
     With the recent stabilisation of the epidemic and the positive support and response from the Guangdong and Shenzhen authorities, the flow of XBGVs has gradually picked up recently. The Government will continue to discuss with the Mainland authorities to gradually allow Hong Kong XBGV drivers to drive directly to the operating points in the Mainland to pick up goods, so as to enhance the cargo volume and efficiency of cross-boundary land transport. The Government will also continue to liaise with the trade and reflect their needs to the Mainland authorities in a timely manner.
(3) To consolidate Hong Kong's role as an international aviation hub, the Government has all along been actively taking forward the development of air cargo industry during the epidemic, including the development of intermodal operation and air cargo logistics park. For instance, the Airport Authority Hong Kong (AA) is developing "sea-air cargo transhipment" between Hong Kong International Airport (HKIA) and Dongguan, as well as setting up an "HKIA logistics park" in Dongguan with the air cargo security screening and acceptance processes conducted there, so that export cargo from the Mainland can be transported by sea to HKIA and then transhipped overseas directly without the need to undergo further security screening. 

     Besides, in view of the importance of high efficiency and smooth operation of the Hong Kong airport in enhancing the competitiveness of Hong Kong's air cargo industry, the Government and the AA have actively examined and introduced various measures to help enhance air cargo efficiency. Among various measures, the AA has been actively enhancing its capacity for and efficiency in handling various types of cargo as well as developing relevant logistics facilities, including the collaboration with its business partner in expanding the express air cargo terminal, so as to enhance Hong Kong's capability in handling express and small parcel shipments, as well as the premium logistics centre being developed on the land parcel of about 5.3 hectares at Kwo Lo Wan in the south cargo precinct. The above measures would be important for HKIA to consolidate its leading position in air cargo logistics. 
(4) The Government will continue to adopt measures to support the Hong Kong logistics industry to develop high value-added logistics, so as to strengthen our international competitive edge and to seize the immense opportunities arising from the national development.
     With a view to enhancing competitiveness of Hong Kong's logistics sector, the Government launched the Pilot Subsidy Scheme for Third-party Logistics Service Providers amounting to $300 million on October 12, 2020 to provide subsidy to around 300 third-party logistics service providers with each to be granted a maximum of $1 million, so as to encourage the adoption of technology by the logistics sector for enhancing efficiency and productivity, as well as to attract international enterprises to choose Hong Kong logistics services. As at end-June 2022, a total of 147 projects have been approved under the Pilot Scheme, with the total amount of approved funding around $92 million. Besides, the Government has been actively identifying suitable sites for the trade to develop multi-storey buildings for modern logistics facilities so as to support port and logistics operations, with the Kwai Chung site put up for sale through public tender on March 25, 2022 which will close on July 15, 2022. We also plan to conduct a feasibility study on another logistics site in Kwai Tsing area.
     As for Hong Kong Port, about 90 per cent of Hong Kong's freight volume is transported by water. The Kwai Tsing Container Terminals (KTCTs) handled over 80 per cent of Hong Kong's total container throughput in 2021 and serve as a major transhipment hub in Asia. The Government announced in the Chief Executive's 2021 Policy Address the development of smart port. Through the Task Force on Smart Port Development formed under the Hong Kong Maritime and Port Board, the Government is working with the trade to drive the development of smart port, with a view to further enhancing port efficiency and reducing cargo handling time and cost through streamlining and optimising the multi-party co-ordinated processes electronically.
     Currently, with well-established infrastructure and supporting facilities in the peripheral area, including a transport network with extensive connectivity, the operation of the KTCTs at the existing site in Kwai Chung not only is conducive to the interface between various supporting facilities, but also brings synergy to the development of the surrounding back-up land. The relocation of the KTCTs requires a holistic consideration of a host of factors, including port planning, land requirement, land use compatibility, environmental considerations, water flow, marine channels, road connections and other infrastructure requirements, as well as sustainable development. As such, we will consider studying the land development of the KTCTs at an appropriate juncture, having regard to the future needs of Hong Kong's economic and social development. 
     The Government will continue to work hand in hand with the trade and support them to develop high value-added logistics service, so as to enhance our international competitiveness and to fully seize the immense opportunities arising from the 14th Five-Year Plan and the GBA development.

Ends/Wednesday, July 6, 2022
Issued at HKT 16:15