Logistics is an important sector of the economy, accounting for about 5.4 per cent of Hong Kong's Gross Domestic Product. Hong Kong is Asia's premier international transport and logistics hub, as well as an important gateway to Mainland China. It is also the world's busiest international air cargo centre and one of the world's busiest container ports. These achievements are attributed to the operators of the services and facilities — the investors as well as the efficient workforce. The success is also the result of the constructive private and public partnership and cooperation.

Efficient, reliable and well-connected, Hong Kong's airport and port are important assets in the development of a logistics industry. The airport handles an average of 65 000 tonnes of cargo every week and, with its dual runways, it has ample capacity to handle the anticipated increase in demand.

Hong Kong is also home to the most productive and efficient container terminals and is the biggest private terminal operator in the world. A comprehensive network of container line services connects the port of Hong Kong with over 500 destinations worldwide. The nine container terminals at Kwai Chung-Tsing Yi provide a total handling capacity of more than 18 million TEUs.

Further measures were taken during the year to strengthen the air transport infrastructure. The Government's Economic Development and Labour Bureau concluded an Air Services Agreement (ASA) with Saudi Arabia in 2005, bringing the number of ASAs to 55 and providing more opportunities for airlines to expand services.

'Logistics Hong Kong' Initiatives

The policy objective of the Government is to maintain and strengthen the role of Hong Kong as the preferred international transport and logistics hub in Asia.

The Government provides the necessary infrastructure and an environment conducive to the development of the logistics sector. It also promotes closer cooperation with the Mainland, in particular, the Pearl River Delta (PRD) region to achieve synergies in logistics development.

The Hong Kong Logistics Development Council, chaired by the Secretary for Economic Development and Labour, provides a forum for the private and public sectors to foster logistics development with a view to strengthening Hong Kong's status as the leading logistics hub in Asia. Five project groups have been set up under the council to develop and implement work programmes for physical infrastructure, information connectivity, human resource development, support for small-and medium-sized enterprises (SMEs), and marketing and promotion.

In December, with the support of the council, the Government launched the Digital Trade and Transportation Network System, an open and neutral e-platform to enable participants in the supply chain to exchange information and data. The council also advocates the development of the Lantau Logistics Park which will provide modern, purpose-built logistics facilities in a secure operating environment for the efficient delivery of customised and integrated services.

The council worked closely with the logistics sector during the year to upgrade the quality of the workforce by encouraging training institutes to organise tailor-made courses for logistics industry employees. It also organised roadshows at secondary schools to promote awareness among students of the development of the logistics sector and the employment opportunities it offered. Seminars were also held to update logistics SMEs on the latest trends and technologies in the industry. In September, a council delegation, led by the Secretary for Economic Development and Labour, toured Italy, France and Spain promoting Hong Kong's logistics strengths.

The council maintained a keen interest in the Government's continued discussions with the Guangdong authorities on measures to reduce cross-boundary trucking costs. These measures include the relaxation of the 'four-up-four-down' and the 'one-truck-one-driver' rules, as well as the extension of the validity period of Hong Kong-Guangdong joint-venture transport contracts and the extension of operating hours of control points at Jiangmen, Huangcun, Fenggang, Changan and Taiping.