50.9 F
San Diego
Sunday, February 5, 2023
HomeArticlesStrategic Land Development For Jobs

Strategic Land Development For Jobs

Amid the global COVID-19 pandemic, the logistics industry has demonstrated its importance to Hong Kong’s society and economy.
It is instrumental not only in maintaining the flow of essential goods such as food and household supplies, but also in supporting
the paradigm shift in retailing, which is the process of migrating purchasing activities from offline to online. This is a trend that has
emerged in recent decades, with the growth of e-commerce serving as the catalyst.
Globalisation of supply chains and changing consumer behaviours have made logistics an increasingly crucial link throughout the
value chains. On the one hand, product manufacturing is taking collective efforts across different countries to make product parts
and perform final assembly, with logistics smoothing the process. On the other hand, consumers are increasingly making their
purchases online instead of going out to brick-and-mortar stores, with logistics performing last-mile deliveries to people’s doorsteps.
All these changes have prompted the logistics industry worldwide to continuously evolve and grow its operations and services.
With intensifying geopolitical tensions worldwide, however, accompanying deglobalisation moves could hurt international trade and
pose additional challenges to the logistics industry. In this context, a reconfiguration of the global supply chain is inevitable. As the
rest of the world is moving swiftly to adjust to the shifts in global trading practices, Hong Kong, a premier trading and logistics hub,
must also take forward-looking measures to keep pace with its peers and competitors.
Although Hong Kong as a logistics hub benefitted from many geographical and inherent advantages, including strategic location,
excellent connectivity, efficient customs operations and its free port status, the logstics industry’s edge is diminishing. This is due to rising labour costs, inadequate government support and especially a continual shortage of land supply. These constraints are a direct consequence of the Government’s lack of a strategic economic and industrial blueprint.
Take the maritime and port industry for example: Hong Kong Port (HKP) used to be the busiest port in the world, but 2019 saw its
global ranking drop to eighth place. A comparative analysis shows that HKP has the smallest yard area as a proportion of throughput among the world’s top ten ports. This is particularly problematic considering HKP’s expanded role as a transhipment hub, which requires a large container yard area to park transhipment containers that wait for the next vessel bound for their final destination. To make matters worse, our proprietary analysis indicates that over 40% of the land designated for port back-up uses near Kwai Tsing Container Terminals (KTCTs) is at present under-utilised. By contrast, Hong Kong’s airfreight sector is performing strongly, and Hong Kong International Airport (HKIA) is still ranked as the world’s busiest cargo airport. But HKIA is also facing potential space constraints, with one of the lowest ratios of airport logistics space to air cargo tonnage handled among the world’s top ten airports.
The above examples are just a tip of the iceberg threatening the logistics industry. In fact, the supply of logistics space is far behind
the industry’s demand. While the trading and logistics sector’s GDP contribution grew by 51% from 2009 to 2018, built-up industrial
land recorded only a meagre increase of 8%. In particular, a supply vacuum of new warehouse spaces in the past decade has pushed
down vacancy rates and driven up rents. Meanwhile, the existing flatted factories in the city, designed during the industrial era, are
simply not suitable for the market’s needs, as logistics operators look for modern facilities with a large floor plate, high ceilings and
direct ramp access.
The under-supply of industrial space has pushed logistics operators to operate on sites without proper planning and infrastructure
in the New Territories, resulting in the emergence of brownfield. Currently, of the 1,414 hectares of active brownfields, 651 hectares,
or 46%, are occupied by logistics-related industries. Unfortunately, operations on brownfields are far from optimal, with unplanned
development polluting the environment and upsetting nearby residents. This outcome is a negative externality that is currently borne
by the community.
To support sustainable growth of the logistics sector, we believe that the way forward is for the Government to commit to a timely
and adequate provision of land and facilities. Equally important is to implement policies under an effective governance structure in
support of our strategic industries as a whole

Leave a Reply

Most Popular

Recent Comments

%d bloggers like this: