Opportunities and Prospects of Logistics Industry

1
????????? Opportunities and Prospects of
Logistics Industry
Ir Dr Paul Tsui
Presentation by
Chairman Federation Asia Pacific Aircargo
Association (FAPAA) HongKong Association of
Freight Forwarding Logistics (HAFFA)
September 11, 2013
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Agenda

• Current Environment

• Services specification

• Education Training

• Employment Opportunity

• Q A

11 September 2013
3
Hong Kongs Strengths

• World class infrastructure
• Multi-modal connectivity
• Reliable and efficient workforce
• Clean Government

4
Hong Kongs Strengths

• Open and business-friendly environment
• Rule of law and independent judiciary
• Free flow of capital and information
• Level playing field
• A simple and low tax regime
• Transparent, efficient customs
• Free port

5
Support from China

• China fully supports Hong Kong to develop its
  logistics services and remains an international
  maritime centre in its 12th National Five-year
  Plan.
• In particular, China supports Hong Kong to
  develop into a high-value goods inventory
  management and regional distribution centre.

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Hong Kong Port

• Worlds third busiest port in 2011, handled 24.4
  million TEUs
• Major modes of operations
• Container terminals
• River Trade Terminal
• Public cargo working areas
• Mid-stream operations
• About 440 sailings per week to 500 destinations
  worldwide

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Current Situation Ocean Freight
Rank 2004 2005 2006 2007 2008 2009 2010 2011 2012
1 Hong Kong 21 984 Singapore 23 192 Singapore 24 792 Singapore 27 936 Singapore 29 918 Singapore 25 867 Shanghai 29 069 Shanghai 31 739 Shanghai 32 529
2 Singapore 21 329 Hong Kong 22 602 Hong Kong 23 539 Shanghai 26 152 Shanghai 28 006 Shanghai 25 002 Singapore 28 431 Singapore 29 938 Singapore 31 649
3 Shanghai 14 554 Shanghai 18 084 Shanghai 21 719 Hong Kong 23 998 Hong Kong 24 494 Hong Kong 21 040 Hong Kong 23 699 Hong Kong 24 384 Hong Kong 23 117
4 Shenzhen 13 659 Shenzhen 16 197 Shenzhen 18 470 Shenzhen 21 099 Shenzhen 21 471 Shenzhen 18 250 Shenzhen 22 510 Shenzhen 22 571 Shenzhen 22 941
5 Busan 11 492 Busan 11 843 Busan 12 039 Busan 13 261 Busan 13 453 Busan 11 980 Busan 14 194 Busan 16 185 Busan 17 046
6 Kaohsiung 9 714 Kaohsiung 9 471 Kaohsiung 9 775 Rotterdam 10 791 Dubai 11 827 Guangzhou 11 200 Ningbo 13 147 Ningbo 14 719 Ningbo 16 175
7 Rotterdam 8 292 Rotterdam 9 288 Rotterdam 9 653 Dubai 10 653 Guangzhou 11 001 Dubai 11 124 Guangzhou 12 546 Guangzhou 1 250 Guangzhou 14 547
Source Containerization
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Efficient Port Operation

• Nine container terminals at Kwai Tsing
• A total of 24 berths operating round-the-clock
• 36-40 crane movements per hour
• average turnaround time for each container
  vessel at terminals is estimated to be around
  10 hours

9
Support from HKSAR Government

• Measures to strengthen Hong Kong Port
• Actively studying the development of a new
  container terminal in Tsing Yi
• Dredging the Kwai Tsing Container Basin and its
  approach to 17 metres

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An Aviation Hub

• Worlds 1 airport in terms of international
  cargo since 1996
• Handled 3.94 million tonnes of cargoes in 2011
  worlds busiest cargo airport
• 6 000 flights per week to about 160 destinations
  worldwide, including around 40 cities in China

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Current Situation Air freight
Source Airport Council International
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World Class Air Cargo Terminals

• Three air cargo terminals - total designed
  capacity of about 4.8 million tonnes per year

• A new air cargo terminal with a designed capacity
  of 2.6 million tonnes per year is scheduled for
  completion by early 2013

13
Strengthening Hong Kong as an Aviation Hub

• Airport midfield development project underway to
  provide additional cargo stands
• Developing a three-runway System at Hong Kong
  International Airport

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Way Forward

• HK to maintain its role as the regional logistics
  hub and as a supply chain base for high value
  products and services

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BEST LOGISTICS PERFORMERS BEST LOGISTICS PERFORMERS BEST LOGISTICS PERFORMERS BEST LOGISTICS PERFORMERS

2012 2010 2007
  Rank Rank Rank
SINGAPORE 1 2 1
HONG KONG 2 13 8
FINLAND 3 12 15
GERMANY 4 1 3
NETHERLANDS 5 4 2
DENMARK 6 16 13
BELGIUM 7 9 12
JAPAN 8 7 6
U.S. 9 15 14
U.K. 10 8 9
Source World Bank, web.worldbank.org Source World Bank, web.worldbank.org Source World Bank, web.worldbank.org Source World Bank, web.worldbank.org
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Service Customization
warehousing
distribution
Production
Materials management
Inbound Logistic

• Warehouse management
• Packaging
• Labeling
• Vendor Management Inventory

• Supply management
• Import
• Transport
• Gathering and consolidation
• Receiving

• Planning and replenishment of raw materials
  auxiliary materials
• Expediting
• Production line feeding
• Order preparation
• Spare parts management

• International domestic delivery
• Custom services
• Cross-docking
• Spare parts management and distribution
• Specialized distribution
• Packages design and realization
• Hub Distribution

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Wine Regional Distribution
SZX Distribution Centre
EU Vineyards
HKG Regional Distribution
SHA Distribution Centre
EU Bonded Warehouse
EU Vineyards
Asia Pacific countries
EU Vineyards
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Services Characteristics

• RFID Monitoring from the point of origin till end
  user both temperature and humidity
• Capability in handle both wine hard liquor
• Temperature Controlled Warehouse
• Temperature Controlled Local Delivery
• Real Time Inventory Control with electronic data
  Interchange capability
• Wine Promotion Exhibition, Wine Tasting,
  Wine Dinner

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Regional Hub Distribution
Indonesia/Malaysia
China
Vietnam/ Thailand
Korea/ Japan
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Regional Distribution Centre

• Warehouse Capabilities

Temperature Controlled Room
Garment on Hangers
General Storage Services
Pick Pack, Sorting, Labeling
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Standardization Best Practices in Training
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HR Reference
Operations Customer Service Sales Administration
Manager Manager Manager Manager
Assistant Manager Assistant Manager Assistant Manager Assistant Manager
Supervisor Supervisor Supervisor Supervisor
Clerk/ Operative Staff Clerk/ Operative Staff Clerk/ Operative Staff Clerk/ Operative Staff
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Example
121 Manager for Operation Management In charge of enforcing the strategies, guidelines and targets in the operation of the establishment. Jobs/responsibilities/tasks including part or all (but not limited to) the following -
  ?? ???? ??????????????????????????(?????)????????? -
      Evaluate and calculate workload for cargo handling LOCUCT402A
      ?????????? LOCUCT402A
      Monitor the performance of contractors LOCUOM401A
      ?????????? LOCUOM401A
      Design and prepare tenders LOCUOM402A
      ??????? LOCUOM402A
      Prepare proposals LOCUOM403A
      ????? LOCUOM403A
      Represent the company to perform obligations in trade associations and liaise with relevant organizations LOCUOM404A
      ??????????????????? LOCUOM404A
      Settle labour disputes in a company LOCUOM405A
      ???????? LOCUOM405A
      Monitor the performance of suppliers LOCUOM407A
      ??????? LOCUOM407A
      Apply simulation technique to test efficiency of operation LOCUOM408A
        ???????????? LOCUOM408A
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Education Training

• Vocational Training Program for the Freight
  Logistics Sector (VTP) Co-organized by HAFFA
  CILTHK Sponsor by HK Logistics Development
  Council
• Air freight Module
• Module one Introduction
• Module two Cargo Documentation
• Module three Airfreight Operational Supervisory
  Training (QF SCS level 4) July 2012
• Module four Airfreight Operational Managerial
  Training (QF SCS level 4) Nov 2012
• Ocean freight Module
• Introduction
• NVOCC SOP (Customer Service)
• Executive Certificate in Shipping Practice (QF
  SCS level 4) July 2012
• Executive Certificate in Warehouse Distribution
  (QF SCS level 4) Nov 2012

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• Module 1 2 Summary of Feedback (Airfreight)

Overall comment
Does your employer subsidize your course fee?
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• Module 1 2 Summary of Feedback (oceanfreight)

Overall comment
Does your employer subsidize your course fee?
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M3 M4 (both Airfreight Seafreight
Streams)Sponsorship available from QF
(supporting scheme by EDB) Training Provider
(Poly U-MEDC) applied for QF qualifications for
M3 M4 which would be the first training pgm
under QF Specification of Competency Standards
(Level 4) Some modifications to the syllabi of
M3 and M4 were to be made to meet the
qualification requirements of QF SCS in respect
of the logistics industry
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M3 Executive Certificate in Airfreight
Operational Supervisory Training
Name of Unit of Competency (UoC) UoC Code Level
Unit 1 4
Establish and maintain relationship with business partners UoC LOCUOM414A
Unit 2 4
Monitor the performance of contractors UoC LOCUOM401A
Unit 3 3
Handle and review customer's opinions and complaints about service quality UoC LOCUSM312A
Unit 4 4
Formulate air freight security standard UoC LOAFSS401A
Unit 5 Supplementary topics 4
1.           Handle freight problems caused by delay or cancellation of flights UoC LOAFOM403A
2.           Understand intellectual property and avoid infringement act UoC LOCUIL411A
3.           Conduct Electronic Data Interchange (EDI) in the industry and with customers UoC LOCUEL302A
4.           Handle enquiries on air freight rate UoC LOAFSM306A
5.           Calculate commission/concession UoC LOAFSM307A
6.           Assess sales information of the industry UoC LOCUSM406A
7.           Determine suitable aircraft and goods for delivery UoC LOAFOM401A
Total Q F S C S Based Program 4
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M 4 Executive Certificate in Airfreight
Management Training
Name of Unit of Competency (UoC) UoC Code Level
Unit 1 5
Forecast future cargo volume and handling capacity UoC LOAFOM503A
Unit 2 4
Handle claims for air cargo damage UoC LOAFIL402A
Unit 3 4
Conduct quality management audit UoC LOCUQM401A
Unit 4 4
1.           Design and prepare tenders UoC LOCUOM402A
2.           Prepare proposals UoC LOCUOM403A
3.           Formulate on-the-job training plans for staff UoC LOCUOM504A
4.           Formulate contingency procedures on emergency UoC LOCUOM516A
5.           Formulate airfreight standard contract terms UoC LOAFOM510A
6.           Formulate environmental management policy UoC LOCUQM404A
7.           Handle co-loading market transactions with air freight forwarder UoC LOAFSM402A
Total Q F S C S Based Program 4
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M3 Executive Certificate in Shipping Practices
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M4 Executive Certificate in Warehouse and
Distribution
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Current Status of Employment Opportunity

• Trade Logistics is one of the four pillars
  Industries for Hong Kong supporting more than
  200,000 workers.
• Job Vacancies for Cargo Terminal Operator alone
  at the Hong Kong International Airport after the
  completion of Cathay Pacific Cargo Terminal is
  2,000 jobs.
• Job functions such as ramp services, warehouse
  services, clerical, etc.

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