We are glad to see the expansion in cross boundary facilities and the realization of the 24-hour boundary crossing. It is also certain that boundary crossing efficiency would be further enhanced with the additional bridge at Lok Ma Chau later this year and the Western Corridor next year. DTTN is set to become operational next year and so might the freight villages and pipelines. However, these will not guarantee success unless the numerous cost items associated with carriage of freight to Hong Kong and operational costs are lowered or eliminated.

It is more than likely that the throughput of container terminals in Shenzhen would surpass that of Kwai Chung this year. One should also worry about safeguarding the No. 1 position in international air cargo of Hong Kong, particularly when intensified competition is imminent.

There are far too many, and far too high, existing charges in addition to the basic freight charge. Shippers are paying a sum in excess of $700 for a small shipment (less than 1000 kg/1 CBM) from Dongguan to Chek Lap Kok before assessment of freight. This is a rather big sum especially when most air shipments are small in volume. Costs have to come down.

Should the requirement for exclusive van be reviewed? If shipments could be consolidated and carried to Hong Kong in a common van, the carriage cost would be lowered substantially. This could be made possible, in the first phase, through franchised carriers, with closely monitored by the authorities through use of electronic seals, GPS devices, etc. As this will require changes in regulatory requirements from the Mainland authorities, the SAR Government may have to take the lead to initiate the change.

Two cost examples I can think of are the $80 Registration Fee currently charged by HIDC and ATL, and the $60-$100 Handling Fee/Gate Charge charged by the freight forwarders' CFS operators. Hong Kong has experienced deflation over the last few years, and labor and property are the most affected areas. There is definitely room for reduction. Moreover, the CFS operators should stop the practice of using shippers' trucks as buffer storage. During peak season, it is not uncommon for truckers to have to wait for a few hours or up to a day before they could deliver their goods. This not only inflates cost, but also disrupts delivery plans and schedules.

One should not forget that the current CT (cargo terminal) charges are 27% higher than at the old Kai Tak Airport. CTs have enjoyed much greater throughput than anticipated along with lower costs due to deflation of the past few years. For this reason, there could not be a more appropriate time for the CTs to review their charge levels. At $1.37/kg, the CT charge is a very substantial cost item to shippers and to the industry.

Likewise, although shippers have been repeatedly told that freight forwarders are already passing out substantial discounts off the "official" HAFFA tariff, and that the tariff represents the ceiling market charge, HAFFA's insistence in maintaining the tariff at the old levels would reinforce the impression of Hong Kong's inflexibility when it comes to costs. Ignorant shippers, or those being forced to pay higher charges, will naturally attempt to seek lower cost alternatives and ship their goods elsewhere.

I am only using air cargo as a cost example. The same principle is applicable to land and sea transport, warehousing and local cargo handling. Indeed, the goal of making Hong Kong competitive again could only be achieved with concerted effort and everyone's contribution counts. Every effort in lowering the charge levels will contribute to the continued success of the whole industry and action is required now!