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Acting Chief Executive Carrie Lam
Some 60 years ago, goods were shipped as they had been for centuries: as loose cargo in wooden crates packed, stacked and crammed into a ship. The process was unwieldy, inefficient and unreliable. Theft was rampant. The loading and unloading of cargo took ages and a whole lot of dockhands.
And then, things changed, thanks to the invention of uniform metal containers in 1950s. The cost of the very first container ship was 16 US pennies per tonne to load, compared with nearly six US dollars per tonne for loose cargo. And more could be loaded: in 1960s, dock labour moved only 1.7 tonnes an hour onto a cargo ship. In early 1970s, they were loading 30 tonnes an hour. This, together with increased productivity, meant lower costs to move goods.
Today, we are well into the age of container transport - by ship, rail or truck - without the need for re-packing when changing the transport mode. This means that goods can be traded quicker, cheaper and more efficiently.
The revolution of container transport is a classic example of how innovative ways of logistics can boost trade, encourage commerce, and drive economic development.
In Hong Kong, logistics and maritime services have long been one of the pillar industries of our economy. Since the 1970s, we have steadily established ourselves as a regional logistics hub and international maritime centre. Trading and logistics together make up the largest sector of the Hong Kong economy. Last year, trading and logistics contributed 23% of our overall Gross Domestic Product and 20% of our employment.
Strategically located at the heart of Asia, Hong Kong has long been the gateway to southern China, and the bridge between the Mainland and the rest of the world. Our infrastructure is world-class, rated first in the World Economic Forum’s Global Competitiveness Report. Our robust economy, trade freedom, regulatory efficiency, and excellent logistics services have made Hong Kong one of the world’s busiest logistics hubs.
The Hong Kong Port is one of the most efficient ports in the world, with an annual throughput of more than 20 million TEUs (Twenty-foot Equivalent Units). About 340 container vessel sailings a week leave Hong Kong to some 470 destinations worldwide. Last year, we received over 100,000 cargo vessels.
And we are keen to maintain our competitiveness in the logistics and maritime sectors - by promoting high value-added maritime services. Here in our city, over 700 companies are already offering a variety of maritime services - from ship management, ship broking and chartering, registration, finance, maritime insurance, to maritime law and arbitration. Maritime insurance, in particular, is a case in point. We have the largest cluster of representatives from the International Group of Protection & Indemnity outside London, with 12 of its 13 members offering services in Hong Kong.
We recognise the challenge of competition and will not rest on our laurels. In April this year, the HKSAR Government sets up the Hong Kong Maritime & Port Board, which is tasked to formulate strategies to promote the development of high value-added maritime services on all fronts, including manpower development, marketing and promotion, as well as industry development.
Last month, the International Union of Marine Insurance has announced the establishment of its Asian hub in Hong Kong. This is the Union’s first offshoot outside its headquarters in Germany. I welcome many more international partners to Hong Kong, to make good use of Hong Kong’s growing maritime services sector.
Shipping aside, Hong Kong is connected to cities around the world by airplanes. From here, we can reach all of Asia’s major markets within four hours’ flight time. Half the world’s population is within five hours of reach from Hong Kong. The Hong Kong International Airport hosts more than 100 airlines, operating some 1,100 flights each day to 190 international destinations. Our airport has been the world’s busiest international cargo airport for the past six years, handling over 4.38 million tonnes of cargo a year.
And we are building an even better aviation hub, moving ahead with a three-runway system. The project includes reclamation of some 650 hectares of land, construction of a third runway, a new concourse, new automated people-moving and baggage-handling systems. When completed, our airport will have the capacity to handle about 100 million passengers and nine million tonnes of cargo a year.
On land transport, we are well into completing our section of the Hong Kong-Zhuhai-Macau Bridge. On completion of this mega-project, a journey from the Hong Kong International Airport to Zhuhai will drop from four hours to about 45 minutes, expanding our cargo capability in the Pearl River Delta’s western reaches.
Given our superb connectivity in sea, air and land, Hong Kong is well-placed to participate in China’s Belt & Road Initiative - a topic that will be explored during the Plenary Session. Let me just say briefly that, amongst the 60 or so countries along the Belt & Road, the Hong Kong port has marine cargo movements with 45 of them. We have signed air services agreement or international air transit agreements with 40 of them. This certainly gives Hong Kong a clear edge in meeting the increasing need for logistics services in the Belt & Road regions, particularly in emerging economies where high quality logistics services are in high demand.
Malcom McLean’s first ship carried 58 containers back in 1956. Today, mega-vessels carry more than 19,000 containers. I would say our ship has come in, and it will keep coming in.
Acting Chief Executive Carrie Lam gave these remarks at the Asian Logistics & Maritime Conference on November 22.
