(From left to right) Amy Chan Yuen-man, Deputy Secretary for Transport and Logistics; Mable Chan, Permanent Secretary for Transport and Logistics; Lam Sai-hung, Secretary for Transport and Logistics; and Liu Chun-san, Under Secretary for Transport and Logistics, pose for a group photo during the presentation of an action plan to promote the high-quality development of Hong Kong's logistics industry at the Central Government Office on Oct 31, 2023. (CALVIN NG / CHINA DAILY)

The government of the Hong Kong Special Administrative Region released on Tuesday its action plan to promote the high-quality development of the logistics industry in the city.

The “Action Plan on Modern Logistics Development” aims for the industry to have a smart, modern, green and sustainable, internationalized and convenient development through eight strategies and 24 recommended actions.

The government said it will regularly release four parcels of land, covering approximately 19 hectares, between 2024 and 2027 to entice industry players to develop modern facilities and employ innovative technologies for improved operational efficiency. The government has identified land around the Kwa Tsing container terminal for feasibility studies.

In addition, a total of about 37 hectares of land will be reserved in new development areas in the Northern Metropolis Area, including in the Hung Shui Kiu/Ha Tsun New Development Area, to create a “modern logistics circle”

In addition, a total of about 37 hectares of land will be reserved in new development areas in the Northern Metropolis Area, including in the Hung Shui Kiu/Ha Tsun New Development Area, to create a “modern logistics circle”.

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“Although the land earmarked in Hung Shui Kiu/Ha Tsun for logistics industry development is large, we will also consider other areas such as San Tin Technopole for potential development, because this area has a niche in cross-border transportation,” Secretary for Transport and Logistics Lam Sai-hung said in a press conference on Tuesday.

“We will conduct a planning feasibility study into developing logistics facilities in the Hung Shui Kiu/Ha Tsun development area. When making a decision, we will mull (over) what types of logistics activities (cold storage or e-commerce) will be suitable in the development area, taking into consideration such factors as market trends, geographical location, requirements of facilities, and linkages to the Qianhai area,” Lam noted.

The transport and logistics chief added that Hong Kong should leverage the Hong Kong-Zhuhai-Macao Bridge to further explore logistics development opportunities between Hong Kong and Zhuhai and other places in western Guangdong province.

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Cheung Wai-man, professor with the Department of Decisions, Operations and Technology at the Chinese University of Hong Kong and director of CUHK’s Asian Institute of Supply Chains and Logistics, agrees that land for logistics is important for the industry’s development. “The land area should not be too scattered for economies of scale, and storage facilities for long-period leases will encourage logistics operators to commit to investing in smart logistics solutions,” he said.

Regarding the labor shortage, the administration has estimated that the logistics industry will need about 6,500 additional workers every year to meet development needs, with the majority of requirements being at the clerical or operational level.

Lam said the government will optimize and regularize the “Pilot Subsidy Scheme for Third-party Logistics Service Providers” this year to alleviate the manpower crunch through enhanced training and digitalization.

“By leveraging digital platforms and technologies, logistics providers can streamline cross-border processes, simplifying documentation, and enabling seamless movement of goods. This will not only enhance the efficiency of trade but also position Hong Kong as a preferred gateway for businesses looking to expand their reach into the Chinese mainland market,” said Ivy Tse, co-CEO and co-founder of one-stop supply chain finance platform FreightAmigo.

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The trade and logistics sector is one of Hong Kong’s four key economic pillars, accounting for one-fifth (around HK$651 billion, or $83.2 billion) of gross domestic product and over 610,000 jobs. The logistics sector alone contributes 6.2 percent (around HK$170 billion) to GDP and employs around 184,000 people, according to government data.