Critical Factor

Over the past three decades, Hong Kong has grown rapidly compared to other Asian countries to become the most efficient sea and air cargo handling hub. There are 9 cargo terminals in Hong Kong, handling 22 million TEU in 2013; while Hong Kong International Airport ranked first in the world in terms of air cargo throughout with 4.38 tonnes in 2014, followed by Incheon. Obviously, Hong Kong is outstanding in both sea and air cargo handling.

Government policy is one of the factors that is critical for successful sea-air hub. The setting up of free port is one of the typical example illustrating how government policy favor sea-air hub. Free port is a kind of reduction or removal of commercial barriers. Dubai is one of the leaders, which has more than 20 free zones that provide no customs duties and controls for transshipment. Dubai is now considered as one of the major trans-shipment hub in the Middle East. Cargo is being forwarded to Dubai by sea in Far East and Sub-continents to its final destinations in Europe, USA, and Middle East & Africa by aircraft. Similar to Dubai, Hong Kong is a free port. No Customs tariff is levied on imports and exports by the Government. In the process of transshipment, there will be no export or import tax involved. Companies need not afford extra tax for transshipment. It help to alleviate the cash flow of shippers and logistics service providers as well as to ensure the ease of cargo flows and customs territory. Moreover, in order to speed up the Customs procedure, Hong Kong Government introduced the Air Cargo Clearance System (ACCS) to enhance the Customs clearance of air cargoes, enabling fast Customs clearance service to the legitimate trade without compromising security. Government policy raises the initiative of companies to make transshipment through Hong Kong.

Location is another factor of a successful sea-air hub. Neil Davidson, director of ports for London-based Drewry Shipping Consultants said ‘the pattern of hubs is driven by location factors.’ Singapore is a sea-air hub with geographical advantage. Singapore locate at the end of the Malayan Peninsula. With the control over the Straits of Malacca, which is the main shipping channel between the Indian Ocean and the Pacific Ocean, Singapore gains the most economic benefit from transshipment. Positioned at the mouth of the Pearl River Delta on the coast of southern China, Hong Kong’s geographical position as a gateway between the Taiwan Straits, the South China Sea, and the Pacific Ocean make it a strategic channel for sea traffic in Asia and the world. Locating at the center of the Asia-Pacific region, Hong Kong has the most advantageous location which has the closest links to Asia and the world. Strategically located at the heart of Asia Pacific, region’s key markets are reached within 4 hours flight and half the world’s population is within 5 hours flight time. Hong Kong also have direct cross-boundary links to the economic powerhouse of the Pearl River Delta region. The excellent geographical location render Hong Kong c competitive advantage on intermodal business.

As we mentioned above, Sea-air is primarily used as a means of shipment on the major ocean and air trade lanes. For example, in North Asia regular shipping services from China feed into the Korean ports of Busan and Incheon where forwarders can then plug into Korean Air’s substantial global network via its hub at Incheon International Airport. As its name implies that a successful hub requires capabilities in both shipping and aviation aspect. Hong Kong is excel in these two areas by having a top international airport and seaport. Firstly, Hong Kong’s seaport is the fourth-busiest in the world, which means Hong Kong has an ability in providing logistics service as a platform of Sea-air service. The port is well connected with the globe. It allows the ship can easily access to the port or other destinations. Thus enhancing the commerce in port. Our seaport offers 400 container liner services a week to more than 500 destinations worldwide. Moreover, the Port of Hong Kong is supported by the natural shelter and deep water (average water depth of 40 feet can accommodate the 10,000-ton ocean liners) that enable the handling of all types of vessels, which implies that Hong Kong is capable in handling a variety types of cargoes. Also, Hong Kong International Airport has a substantial lead in terms of the number of airline in South China airports, HKIA hosts 90 airlines operating 5,800 flights per week, linking Hong Kong to 117 international destinations worldwide, plus 40 destinations in mainland China. This global network of airline connectivity far surpasses that of Hong Kong’s closest neighbors. Besides its accessibility over the world, HKIA’s efficient air cargo operation owns several international recognition such as Air Cargo Award of Excellence by Air Cargo World. Additionally, HKIA has strong connection with air cargo industry such as DHL Aviation (HK) Ltd. (DHL) and Hong Kong Association of Freight Forwarding and Logistics Ltd. (HAFFA). To sum up, the success in seaport and airport has bring opportunities to Hong Kong to become a logistics hub. Furthermore, Hong Kong's land transportation services are very efficient, thus bringing strong connection between the seaport and airport.