Services and Activities (Annual Report 2016)

The Hong Kong Shippers’ Council was established to protect and promote the interests of its members and Hong Kong shippers in general on matters relating to the transportation of merchandise by sea,  land, and air.

The Council operates under the guidance of an Executive Committee made up of representatives from 16 major trade associations in Hong Kong and derives its broad-based representation and membership from these trade associations. The Executive Committee is served by a secretariat staff of seven.

THE COUNCIL’S MISSION

At a regional and local level, the focus of the Council is to:

‧  Ensure an open and competitive freight market environment;

‧  Ensure that government policy and practices are geared towards the interests of shippers;

‧  Ensure that proper infrastructure and facilities serve the present and future needs of shippers and logistics operators;

‧  Ensure that carriers’ charges are reasonable, with sufficient transparency and justification, and proper governance;

‧  Ensure that the Hong Kong shippers’ voice is represented locally, regionally and internationally.

The Council achieves these goals through:

1.      Engagement in the consultative mechanism of the HKSAR Government

The Council has representation in a number of major logistics and transport related government committees and advisory groups, including :

-        The Logistics Development Council and its various sub-committees

-        Hong Kong Maritime and Port Board

-        The Sea Cargo Liaison Group, Hong Kong Customs & Excise Department

-        The Logistics Industry Training Advisory Group and its various sub-committees, the Education Bureau

-        The Tripartite Meeting for Logistics Industry, Labour & Manpower Bureau

-        The Regulated Agent Regime Task Force, Civil Aviation Department

-        The Industry Consultative Network (Logistics), Employee Retraining Board

-        Road Cargo System User Liaison Group

2.      Engagement in trade, industrial, and professional organisations and institutes

The Council closely co-operates with other related organisations and institutes.

The Council is represented on:

-        The Shipping and Transport Committee, HKGCC

-        The Logistics Service Advisory Committee, HKTDC

-        The Hong Kong Maritime Forum (HKMF)

-        Transport and Logistics Services Council, FHKI

-        The Focus Group on Import/Export and Wholesale Trade Manpower Survey, Vocational Training Council

-        The Hong Kong Logistics Management Staff Association

Through active participation in these committees and advisory groups, the Council communicates shippers’ needs and requirements to the authorities and other policy-makers. The Council also defends shippers’ interests in the policy formulation process and its execution.

In addition to the consultative and advisory groups, in 2016, the Council also actively participated in major government studies and engaged in ad hoc meetings concerning a number of related issues. The Council’s input is crucial to logistics-related research and surveys by the government to plot the future direction of Hong Kong.

The Council participated in discussion on:

-        Belt and Road

-        Terminal Handling Charges (THCs)

-        Shipping Surcharges

-        Hanjin Shipping Bankruptcy

-        Verification of Gross Mass (VGM)

-        New Groups of Carriers Merger and Acquisition in the Shipping Industry

-        Further Concentration in the Market

-        Objection to Shipping Liners’ Application of Block Exemption from Competition Ordinance

-        Three-Runway System (3RS)

-        Proposed Air Cargo Security Enhancement Measures

-        Public Consultation on the Development of Trade Single Window in Hong Kong

-        2017 Policy Address and 2017/18 Budget Consultation

-        Air Quality Ordinance Review

3.      Protecting shippers’ interests and protesting against shipping lines’ surcharges

The Council represents and defends shippers’ interests in dealing with carriers and service providers. The emphasis is on ensuring that shippers are able to negotiate freight rates in an open market environment and on a level-playing field with the carriers.

The Council monitors the marketplace to ensure sufficient competition exists, that charges and surcharges are justified with sufficient transparency, that proper payment mechanisms are in place that are convenient and cost-effective to shippers and that service standards are set properly, reviewed, and upgraded regularly.

Locally and regionally, the most common points of contention that require constant monitoring are rates and related charges like documentation fees, peak season surcharges, bunker adjustment factors, currency adjustment factors, port congestion surcharges, war risk surcharges, terminal handling charges (THCs), equipment exchange charge, etc. The Council voiced its objections to these unreasonable charges and demanded that they be rescinded. The Council aims to involve the government as and when needed during its dealing with the carriers and freight forwarders.

4.      International Co-operation

The Council maintains active participation in international shippers’ meetings to maintain good liaison and co-operation with shippers’ bodies overseas. The general aim is to promote closer ties, exchange views on issues of mutual concern and make use of collective action against one-sided rate hikes by shipping conferences.

These forums serve as platforms on which the various economies in the region can present and compare their shipping concerns. Through these forums, shippers are made aware of the developments and problems of the various countries and territories represented. They can compare the progress of their endeavours and thereby help strengthen understanding.

Annual meetings provide the forum for discussion and the pooling of information relating to issues affecting each region. At the end of each meeting, a joint declaration is prepared and signed by all participating shippers councils and associations, containing an outline for the course of action planned for the next year on a national, regional, or global level. Through these shippers’ councils’ meetings, shippers around the world are developing more structured organisations to increase their influence.

The Asian Shippers’ Alliance (ASA) held the Global Shippers’ Alliance (GSA) Meeting on 21-23 March 2016 in Paris. The meeting was attended by the Hong Kong Shippers’ Council, the Indonesian National Shippers’ Council, Macau Shippers, Thai National Shippers’ Council and Shippers’ Council of Bangladesh.

The meeting discussed the competition issue in great depth. The meeting recognised that due to factors such as the serious over-capacity in the market, freight rates were competitive in general. However, surcharges and ancillary charges remain as major concerns for Asian shippers.

The battle over surcharges and ancillary charges continues to be a difficult one as shipping lines have been increasing surcharges and ancillary charges in general as means to compensate for their revenue losses from lower freight rates.

The meeting in Paris supported The Hong Kong Shippers’ Council in objecting liners’ block exemption application for liners’ Voluntary Discussion Agreements (VDAs) and Vessel Sharing Agreements (VSAs). The meeting agreed that VDAs and VSAs were anti-competition in nature and therefore provided no benefits to the public.

The meeting also recognised the efforts of member councils in enhancing knowledge and professionalism in the industry through provisions of various forms of training and education. The meeting re-emphasised the importance of human resources development for the industry and agreed to co-operate further in this aspect.

The Chairman and the Executive Director attended the Global Shippers’ Forum AGM in Colombo on 28-29 July 2016. The two-day meeting covered several important topics including VGMs, competition issues, maritime emissions, battery shipments as well as global and regional co-operation of shippers. Further to that, they updated the Council on the development of the most important shipper-related issues and tightened the bonding of shippers’ organisations globally.

The Council was invited to attend the 3rd China International Logistics Summit, held in Suining, Szechuan on 31 Oct - 1 Nov 2016. The summit was hosted by the Szechuan government and jointly organised by the China Purchasing and Supply Association with other logistics organisations. More than 800 delegates from all over China and some 30 countries were in attendance.

The sixth Asian Logistics and Maritime Conference (ALMC) was held at the Hong Kong Convention and Exhibition Centre from 22-23 November 2016.

The Council co-organised a session “Relocating Your Manufacturing Base – the Pros and Cons” on the first day of the conference with HKTDC for an audience of over 600 people. The Council invited four prominent speakers to speak at the session.

The Council hosted the Cross Strait Shipper Alliance Meeting 2016 on 24 November as an associated activity of the ALMC 2016. Representatives from the China Shippers’ Association, Shenzhen Shippers’ Association, Macao Shippers’ Association and Taiwan Shippers’ Association attended the meeting to discuss issues of common interest. The delegates were also invited to attend the Asian Logistics and Maritime Conference on 22-23 November 2016. The meeting discussed important issues including shippers' participation in the Belt & Road Initiatives, cargo safety and security, bankruptcy of Hanjin Shipping, VGMs, competition issues, freight and surcharges, as well as closer co-operation of associated councils. A joint statement was signed.

5.      Enhancing Hong Kong’s logistics industry and cementing its position as a leading logistics hub

The Council supports the government to promote Hong Kong’s port and strengthen the region’s role as a logistics hub within Asia. This is crucial for the success of Hong Kong traders in the arena of international trading.

To achieve this goal, the Council is actively participating in the Government’s promotional activities overseas.

LOGISTICS MISSION

In recent years, Vietnam’s northern centres – notably Hanoi and Haiphong, have become popular production bases for foreign manufacturers, creating demands for logistics services. Port of Da Nang, which is the largest container port in central Vietnam, is also developing its facilities rapidly to international level. In lieu of the opportunities, Mr Willy Lin, Chairman of the Hong Kong Shippers’ Council, also Council Member of the Hong Kong Trade Development Council led a logistics mission to Da Nang, Haiphong and Hanoi in Vietnam from 1-5 Aug 2016, to learn more about the latest logistics development and to explore new business opportunities. Visits to local logistics facilities and factories, networking functions as well as business matching meetings were organised for the delegation in these three major cities. The mission laid the groundwork for future partnership between Hong Kong and Vietnamese companies.

The Council Chairman and Executive Director took part in the joint TDC and LOGSCOUNCIL visit to Vietnam and Thailand f rom 12-16 December 2016. During the visit, two promotional seminars cum luncheons were held in Ho Chi Minh City on 14 December and Bangkok on 15 December. The theme was "Hong Kong as a Regional Logistics Hub -The Best Link in Your Global Supply Chain". The Chairman was invited to be a speaker at the seminar held in Bangkok and gave a presentation to promote Hong Kong’s logistics industry. The core theme of his presentation was “Hong Kong - Thailand partnership”. The Council also signed an MOU with the Thai National Shippers’ Council during the visit.

PRESENTATION

To help promote Hong Kong, in addition to its own activities, the Council entertains a lot of requests to make presentations locally and overseas.

INTTRA SOLARS eVGM Forum was held in Hong Kong on 18 March 2016. The Executive Director presented an update to an audience of 70, comprised mainly of shipping lines representatives and shippers.

Intermodal Asia 2016 was held at World Expo Exhibition & Convention Centre in Shanghai on 22 March 2016. The Marketing Manager of the Council attended the conference and made a presentation on “Highlights of Shippers’ Concerns”. It is important for the industry to understand shippers’ needs to foster product and service enhancements and development.

The Council Executive Director was interviewed by the signature radio programme “Breakfast with Heung Shu Fai” of Metro Finance on 5 April, 2016 to share his view on the latest developments of the logistics industry.

The Council made a presentation on “SOLAS Amendment – New Container Weighing Regulations” on 12 April 2016 at the SCLP luncheon sessions.

On 22 April 2016, the Council Executive Director was invited to give a 45-minute presentation on “Belt & Road” at the Shenzhen and Hong Kong Port Development and Security Seminar - “Belt and Road” seminar, addressing an audience comprising representatives from the Mainland, government officials from Hong Kong and terminal operators. The event was aimed at encouraging broader information exchange between Hong Kong and Shenzhen ports. The seminar was jointly organised by Shenzhen Ports Association, Shenzhen Port Security Society and Hong Kong Container Terminal Operators Association.

The Council was an industry co-organiser of the 2-day international conference “Belt & Road Summit” hosted by the Hong Kong University of Polytechnic on 9-10 May 2016.

On 29 June, 2016, the Executive Director delivered a speech titled “Shipper’s Choices of Airports” at the Shenzhen Air Freight Forum in Shenzhen. Participation at the forum allowed the Council to strengthen its relationship with the Shenzhen airfreight community.

The Maritime Safety Affairs Bureau of the Chinese Government hosted a meeting on 8 July 2016 in Beijing on the hot issue of VGM. The meeting was attended by shipping lines, terminal operators, freight forwarders, and research institutes and shippers representatives. The Chairman and the Executive Director briefed the audience on the latest situation in the market after the implementation of the VGM requirements. The inconsistencies in requirements in different ports in China and introduction of unreasonable charges, especially the freight forwarders’ VGM Fee, were highlighted and brought to the attention of the authority, which has now been urged to issue clear guidelines to minimise confusion and uncertainties in the market.

Hong Kong Logistics Management Staff Association organised a seminar on VGM on 23 August 2016. The Executive Director was invited to make a presentation from a shipper’s perspective; other presenters included a maritime lawyer and an insurer. The event attracted over 100 people.

The Council was a supporting organisation of LSCM Logistics Summit held on 30 September 2016. The Executive Director delivered a speech entitled “Opportunities of Belt & Road Initiatives” and joined a discussion panel.

On 5 October 2016, the Chairman attended a seminar on “China-Hong Kong-Poland: Opportunities for the Polish Business under the New Silk Road Initiative” in Poland and was invited to give a presentation to promote Hong Kong. The topic was “Your Opportunities in Belt & Road”.

The EXCHAiNGE Conference 2016 was held in Frankfurt on 7 October 2016. The Council Chairman, as a keynote speaker, was among a prominent line-up of dominant supply chain representatives to attend the event. He discussed the “One Belt, One Road” initiative in his address. The topic was “Your Opportunities in Belt & Road” The Council also participated in a meeting with a delegation led by a Deputy Director of the German Transport and Logistics Ministry.

The Executive Director was invited to be a guest speaker to make a presentation on “Hong Kong Logistics Industry and its Future” to a class of 60 undergraduate students at the Hong Kong Polytechnic University on 11 October 2016.

On 27 October 2016, the Executive Director attended and moderated at “The End of a Myth – The Hanjin Shipping Case” Forum organised by CILT HK. The forum was attended by over 130 guests.

The Taiwan-Hong Kong Economic and Trade Forum was held in Taipei on 9 December 2016. The Executive Director presented his views on “How the Hong Kong and Taiwan Logistics Industries Joint Hand to Help the Cross Strait Trade”.

6.      Training and visits

The Council has organised a number of tailor-made training courses, seminars and visits to ports, airports and logistics facilities for shippers and industry practitioners to allow them to pick up industrial knowledge, to learn about the latest developments and changes in the trade, shipping opportunities and alternatives in the region and to enhance industry professionalism.

TRAINING

The economic outlook in many parts of the world remains uncertain. The risks of defaults and frauds increase when these events take place and the chances of recovery are usually small and the outcomes are often costly. Therefore, it is very important that all those involved in shipping and trading are aware of the vulnerabilities that currently exist, how the frauds can be prevented and, once they take place, what options there are for recovery. In view of this, the Council organised a workshop “Avoiding Trade Frauds in an Uncertain Economic Climate” on 22 Feb 2016. The workshop updated participants on the changing pattern of fraud in today’s environment, including increased use of the internet to give the fraudulent transaction credibility.

As in the past few years, the Council was a supporting organisation of the Prime Source Forum (PSF), held on 14 March 2016; the PSF is one of the most important events on global procurement and sourcing. The Council supported the forum by helping to get the message across through effective dissemination strategies.

The global economy is weak and the export market is declining. The traditional consumption patterns are constantly changing, so the Council hosted the seminar企業逆市攻守策略研討會on 19 July 2016. Speakers included representatives from Euler Hermes, CRIF Business Information Service and DS-Concept Intelligent Trade Finance. The topics covered credit risk management, reducing bad debts, capital flow management, opportunities in the current economic scenario.

The receivership filed by Hanjin Shipping was a bombshell to the global supply chain and its operators, so the Council hosted several seminars and discussion sessions to update shippers on the latest development :

On 5 October 2016, a panel discussion was held on the Hanjin Shipping Bankruptcy Case. The session was hosted by members of Stephenson Harwood MIT & Shipping team. The Council helped to promote the event and the overall response was highly encouraging.

On 26 October 2016, the Council co-organised with Tradelink Electronic Commerce Ltd. and P.E.E.R. Consultancy Ltd. a workshop on Hanjin Shipping Bankruptcy Case - The impact of Incoterms on your sales, shipping, credit/ marine insurance and LC contracts.

On 27 October 2016, The Executive Director moderated the Panel Discussion – Bankruptcy of Hanjin Shipping – the End of a Myth? - organised by The Chartered Institute of Logistics of Transport. Speakers included representatives from a leading law firm, a shipping company, a lecturer from HKU Space and a council member of CILTHK.

The Council jointly organised the Certificate of Shipping and Logistics Course with the HKU School Professional and Continuing Education (HKU Space) in 2016. The programme ran for eight months between September 2016 and May 2017 to provide industry practitioners and new entrants with a comprehensive training programme on the basics of shipping and logistics operations and build an academic progression path for practitioners to achieve higher academic and professional qualifications.

The programme covered 12 topics including carriage of goods by sea, air and land, cargo insurance, trade documentation, e-commerce and e-shipping, procurement and supply chain management, logistics costing. The tours to Kwai Chung Container Terminal and Hong Kong Air Cargo Terminal Ltd formed an integral part of the course curriculum.

In lieu of the huge demand for the knowledge of dangerous goods (DG) shipments and batteries handling, the Council created a series of DG courses for both sea and air cargo in 2016. The aim was to raise awareness on proper safety in cargo transport. The International Maritime Dangerous Goods Code Training Program and IATA Dangerous Goods Practical Certificate Course were part of the programme series. In-house DG training programmes were also arranged for companies in Hong Kong and Macau.

VISITS

Cross-boundary e-commerce logistics has been growing rapidly and has become increasingly popular. The Council organised a delegation to Shenzhen (深圳跨境電貿考察團/研討會) on 28 September 2016. The aim was to encourage involvement so that shippers can have a better understanding of the recent development in cross-boundary e-commerce and how aviation logistics cope with changes. The itinerary included a tour to Shenzhen Airport where the delegation was given an update on aviation logistics. Participants also attended a seminar on cross-boundary e-commerce logistics. Speakers included representatives from U-Freight Ltd, 深圳市前海轉四方現代物流有限公司, and 深圳圖訊媒體科技有限公司. They exchanged views on recentchanges in cross-boundary e-commerce and related policies and also discussed how to find suitable logistics solutions.

On 27 October 2016, the Council jointly conducted with Hongkong Association of Freight Forwarding and Logistics Ltd a visit to Shenzhen Qianhai. Participants visited Qianhai exhibition hall, Chow Tai Fook Global Goods Shopping Centre, Vanguard, Qianhai Free Trade Zone and Globex warehouse. The aim was to help participants get a better grasp of the potential business opportunities and to enhance the logistics co-operation between Hong Kong and Shenzhen counterparts. A seminar was also arranged with representatives of the Authority of Qianhai Port Management and Globex eServices Ltd. The seminar received positive feedback from its attendees.

7.      Promulgating news and messages to shippers and the industry

The Council communicates to its members regularly via email, and its website www.hkshippers.org.hk. We updated members regularly on the latest trade matters and freight rates, including shipping statistics, and regulations for the region, and new charges and surcharges. The bi-monthly publication Shippers Today features articles and reports on the latest developments in logistics, maritime, and aviation, as well as on the services provided and the service providers.

The Council alerts shippers on developments in the industry, conducts research, and advises shippers of the findings. The Council also organises orientation visits to ports and other logistics and shipping facilities in Hong Kong and the Mainland, and holds seminars and conferences to share information and discuss current issues of significance.