The report has correctly pointed out that shipping carriers are profiting substantially from the Terminal Handling Charge exercise. However, by trying to draw all the attention to the high trucking costs, the report clouds the real issue and does not present a true picture.

I have been asking overseas buyers that I have run into in the last few years: what factors are decisive in their routing choice? Almost without exception, they all mentioned total cost from factories to destination to be the most important. Indeed, I am deeply concerned of an accelerated cargo loss when the quota system expires in 2005.

Given a highly developed port like Hong Kong, enhancement of competitiveness can only be achieved with every single stakeholder contributing their fair share. The objective can only be achieved when all the small bits of effort come together harmoniously. It would be most undesirable for any party to take advantage of its monopolistic position to impose a high charging level. There must be sufficient choices for users and competition among the players. Hence, I again voice my appeal to shipping carriers to lower the current THCs. The high THC is a major reason for cargo owners seeking alternative routing from Hong Kong.

The need to reduce trucking costs is a given. In addition to infrastructure expansion and improvement, let's tackle the problem on the micro level. The present container tractor driving license system should be relaxed to encourage more new blood to join the driver pool. The Government might even consider easing up on the requirements of imported labor. Agreements should be made with Mainland authorities on eliminating the double requirements for annual examinations for tractor and chassis and insurance coverage. The cross-boundary container tractor licensing fee should be reduced.

The existing documentation and information exchange system is clumsy and paper intensive. An industry-wide effort must be made to reduce or eliminate hard copies. Hong Kong needs a higher degree of information automation. Backwardness in this respect was sufficiently exposed when the US Government implemented the 24-hour Advance Manifest Rule last year. The industry has achieved a high level of compliance. Yet, it is regretful that the industry has not been able to make use of the opportunity to foster further data automation.

Perhaps it is also time to revisit the strategy for port development. It is not necessary to stick to the old formula of charging the potential terminal operators a high premium for terminal development, as well as making them responsible for development of road systems, fairway dredging, etc. Port development could be treated as infrastructure development.

Our future success depends on whether we could sharpen our own competitiveness. I am fully confident that we can.