First identified by the HKSAR government in 2002/03 as one of the Four Pillar Industries, the logistics industry in Hong Kong has evolved considerably with the changing business environment, global trade practices and customer behaviors in the last decade or so. With the soaring operating costs, serious shortage in land and labour in Hong Kong, some of the industry leaders see automation and process re-engineering as means of survival.
Successfully doubled the annual tonnage of the Hong Kong Air Cargo Terminals Limited (“HACTL”) during his tenure from 1999 to 2010 as Managing Director, Mr. Anthony Wong shares with us his story.
The difficult times
Mr. Wong joined HACTL in the aftermath of the Chek Lap Kok airport failure. He faced numerous challenges, including Y2K, low staff morale, a hugh annual operating deficit, bottleneck in operation capacity, increasing competition and ever rising operating costs. “Despite the crisis hit us hard, I was glad to see that every one of us learnt and grew from the incident. We all worked as a great team to overcome the hurdles and rebuilt the trust of the air cargo community on us,” says Mr. Wong.
The competition in the air cargo industry has always been fierce, thus squeezing the profit margin. In addition to the relatively low profitability which is in the region of 5-8%, the industry is also hit by high oil price, rising operating costs indirectly induced by a number of factors such as the shortage of land, space and labour.
“Automation”, “process re-engineering” and “efficiency enhancement” have therefore become common topics discussed among the management. On top of the recommendations made by the department specializing in process improvements, frontline staffs are encouraged to identify and channel areas of improvements, including those related to safety issues which add to the cost, to management for consideration. Cash incentives are offered to team or individual staff making feasible and practicable suggestions. Annual bonus is also tied to productivity. “They are the ones who do the job every day and you should not be surprised to hear brilliant ideas from them,” says Mr. Wong. “Of course, we never compromise workplace safety which is always our top priority.”
World-class facilities
The success of the Hong Kong logistics industry was never by sheer luck. Mr. Wong believes that Hong Kong has both world-class facilities and talented people to make things happen, such as in HACTL. According to Mr. Wong, the leading position of HACTL must be attributed to the state-of-the-art facilities they invested and built on the airport island, together with the devoted frontline staff and management team. The facilities cost about US$1 billion and were designed to handle up to 3.5 million tonnes per annum, making it, by far, the single largest air cargo terminal in the world. This attracts thousands of air cargo industry players around the world visiting HACTL every year.
“I think we should be proud of the state-of-the-art facilities we have at HACTL. Only with such world-class facilities we could achieve high level of automation. Our investment did not stop there. To further improve our efficiency and competitiveness, we have been investing hundreds of millions of dollars annually on maintenance as well as IT and system enhancement. If well maintained, the facilities should be able to operate effectively and efficiently for another 20 years or more,” says Mr. Wong.
Developing young managers
No industry could sustain without leaders of the next generation. “We have world-class facilities, great entrepreneurs, leaders and people, we need to encourage our next generations to join the force in order to sustain,” says Mr. Wong.
“Many of the youngsters, including the offspring of the present logistics entrepreneurs are reluctant to join the logistics industry,” Mr. Wong thinks that the present situation is quite worrying. The public generally perceives logistics as unskilled low class operation which is definitely untrue. Contemporary logistics has placed more and more emphasis on automation, IT and systems. The demand for related professionals is on the rise. On the other hand, many logistics companies offer positions like supervisor trainee to develop operation managers of the next generation.
“The industry is offering a lot of opportunities to develop young managers. Non-degree holders, including high schools leavers, can now start off as a supervisor trainee and will be given the opportunities to understand the operations logics, manage frontline staff and develop management skills. It is not uncommon for good performers to be promoted to managerial level after certain number of years of service,” says Mr. Wong.
Mr. Anthony Wong sees great demand for middle management in the logistics industry and encourages high school leavers to join as supervisor trainee.
