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Asian Logistics & Maritime Conference airs HK trends and challenges


TRADE disputes and changing trade and consumption patterns were discussed by logistics, maritime and aviation industry experts attending the ninth Asian Logistics and Maritime Conference, organised by the Hong Kong Government and HK Trade Development Council (HKTDC).

The first plenary session, "Where Opportunity Knocks - Asia Supply Chain Wedged between Challenging Geopolitics", focused on Asia's supply chain playing a larger global role as worldwide trade rows and global economic uncertainties impact the industry.

"Trade tensions are rising around the world, resulting in a dramatic spike in import-restrictive measures," World Trade Organization (WTO) senior economist Coleman Nee pointed out at the conference.

Mr Nee highlighted that a WTO report on trade restrictions showed that the trade coverage of new import-restrictive measures imposed from October 2018 to May 2019 was 3.5 times the average since May 2012. World merchandise trade volume grew just 0.6 per cent in the first half of 2019, and the decrease in both imports and exports in Asia was similar to that in the 2015/16 slowdown.

"Trade diversion is a significant trend, resulting in some emerging markets, like Brazil and Vietnam, seeing large increases in exports, while mature markets, such as Korea and Europe, experience declining exports," said Mr Nee.

Maersk senior vice president Robbert van Trooijen discussed the changing supply chain. Omni-channel trends require distribution support, which presents both problems and opportunities for logistics services providers, he said. Keeping supply chain costs as low as possible put logistics providers under pressure as they need to be agile and fast.

"Producers are making money on their sales, but losing money on their supply chain inefficiencies. As margins erode in e-commerce, it is especially important that costs are kept under control in the supply chain," he said.

The plenary also featured Japan-based logistics and distribution firm Yamato Holdings Co's senior executive officer Katsuhiko Umetsu. "The food supply chain will be enhanced by innovative logistics, making temperature control, manufacturing, distribution and logistics transparent," he said.

"Yamato's goal is to develop an end-to-end cold chain platform to allow perishable food to be delivered safely around the world."

Mr Umetsu invited all companies at the forum to work with Yamato Holdings to achieve the goal of building a food safety cold chain that can trace products and temperature using a physical internet-driven network. Eleven per cent of the parcels it delivers are in the cold chain, so the company is ready to create a global cold chain platform with the support of other stakeholders.

Mr Umetsu outlined the future for logistics, information and financial technology. For governments, this involves food safety standards, digitalisation of customs and quarantine regulations, and development of cryptocurrency. For business, this involves developing and implementing new cold chain technology.

HOPU Investments CEO Lau Teck Sien pointed out that global positioning systems (GPS) are changing warehousing and logistics now that using GPS is "very cheap". He said that GPS sensors have revolutionised warehousing because they enable one warehouse to handle consignment volumes that previously required two to three warehouses to handle.

Li & Fung Development (China) managing director Ka-mun Chang forecasts five future trends in the logistics industry. One trend involves the challenge to the WTO caused by the prevalence of bilateral and regional trade agreements, which make customs procedures, for example, very complicated.

A second trend is consumer empowerment through mobile phones; this has created new demands for supply chains, which have to meet consumer needs globally. And a third trend is the trade tension between China and the United States. "Even if they do agree on a simple trade deal," he said, "there will still be many challenges, such as IP, technology transfer and 'Made in China 2025'."

Another trend is the Belt and Road Initiative, which represents a new phase of globalisation. The mainland China government has started moving low-cost sourcing bases for high-volume products, which may benefit logistics companies in Hong Kong and the rest of the Guangdong-Hong Kong-Macao Greater Bay Area.

The final trend Mr Chang discussed was tech innovations, such as artificial intelligence and 3D printing. These technologies shorten lead times, allowing customers to obtain products instantly, he said.

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