Hong Kong Remains Favourable Logistics Hub Despite ‘Vulnerabilities’
by Mary Swire, Tax-News.com, Hong Kong
09 November 2004

A study undertaken by a team of academics has found that Hong Kong retains considerable competitive advantages as a logistics hub, although it faces cost pressures from export centres on the mainland.

The study, commissioned by logistics firm DHL and undertaken by the Chinese University in Hong Kong, found that cost of using Hong Kong as a transfer point for consignments of freight was high compared to locations in the Pearl River Delta.

According to the study, the cost of shipping a consignment of freight from the factory gate to its final destination by sea was between 13% and 18% more when routed through Hong Kong than when routed through Yantian on the mainland.

For air freight, the cost ranged from 11% to 26% higher if moved through Hong Kong, depending on the final destination.

Kelly Yu, general manager of DHL Express Hong Kong, warned that these cost factors represent a “source of vulnerability” to Hong Kong as a logistics hub.

However, he added that this was more than balanced out by positive factors such as the simplicity of Hong Kong’s customs laws, the territory’s efficiency, and tax benefits arising from the establishment of an ‘importer of record.’

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