Chairman’s Message (Annual Report 2024)
Willy Lin, Chairman
Chairman message
NAVIGATING CHALLENGES AND OPPORTUNITIES IN GLOBAL SUPPLY CHAIN FOR 2024
Shippers are facing significantly high freight rates, unreliable schedules, and increasing delays in ocean shipping for 2024.
The Asian-Europe trade has been disrupted by Houthi attacks on ships in the Red Sea, prompting many shipping lines to reroute around the Cape of Good Hope instead of using the Suez Canal. According to data from the Shanghai Shipping Exchange, freight rates 6 folds surged from USD 1,020 per TEU in January to US$6,000 in July. Although rates dropped to around US$3,000 by December, they remain relatively high.
In addition to high freight rates, shipping lines have introduced new surcharges, including Maersk’s Transit Disruption Surcharge of USD 200 per container, along with other fees such as the Peak Season Surcharge, Carbon Emission-related Surcharges, U.S. Port Strike Surcharge. Some shipping companies have significantly increased overall freight rates.
On the other hand, schedule reliability and ship delays have deteriorated to unacceptable levels. According to Sea-Intelligence, schedule reliability fell below 50% in January and remained between 50-60% for most of 2024. The global average delay ranged from 5 to 6 days. Both indices were significantly higher than pre-pandemic levels, indicating extremely unsatisfactory service.
In the first half of 2024, the transpacific trade faced significant challenges due to the Panama Canal’s drought situation, which reduced traffic by two-thirds. According to the Drewry Index, east-bound freight rates rose from US$1,138 per FEU in March 2023 to US$4,081 in March 2024, and then doubled to US$7,908 in July 2024. This drastic reduction in capacity, coupled with freight rates nearly eight times higher, caused immense hardships for shippers. Additionally, labor strikes at eastern coast ports in October, despite being short-lived, further exacerbated the situation.
The Hong Kong Shippers’ Council has been consistently updating shippers on developments and providing advice on mitigating challenges through Shipping Alerts, the website’s News Portal, and circulars. Shippers must remain vigilant about these changes.
In November, global shippers convened in Brussels, Belgium, to establish action plans aimed at safeguarding and advancing the interests of shippers. The Global Shippers’ Alliance (GSA) discussed the Shippers’ Bill of Rights, addressing various topics including ESG, free and fair trade, supply chain security, and e-commerce, as well as seamless customs processes. The GSA also met with the EU Trade Directorate General to gain insights into upcoming policies and trade forecasts. Meanwhile, the Asian Shippers’ Alliance (ASA) held a separate meeting to explore shared interests.
In 2024, the industry saw a continued decline in Hong Kong Port’s throughput. According to Alphaliner, Hong Kong ranked 13th globally by year-end. Both public and private sectors in Hong Kong were eager to reverse this downward trend. The Council has actively contributed to this effort by focusing on various initiatives, including expanding cargo sources and catchment areas, retaining stakeholders, enhancing related professional services, developing talent and skilled labor, preparing for green shipping, and fostering cooperation among regional ports. These efforts were part of the Budget 2024/25 and Policy Address 2024 consultation processes and included participation in studies by various think tanks and consultants, as well as submissions regarding the three action plans released by the Transport and Logistics Bureau. The Council aims to provide Hong Kong shippers with more logistics service options and high-quality professional services.
On the airfreight front, we are pleased to note that in 2024, Hong Kong International Airport retained its status as the global leader in cargo throughput among airports. We recognize that e-commerce has emerged as a key driver of business and cargo volume. The Council organized a visit to the HKIA Dongguan Logistics Park and actively supported its promotion. We are optimistic about the success of this initiative to expand the catchment area for Hong Kong air cargo through more cost-effective and competitive operations.
The Council also supported the Civil Aviation Department’s decision to liberalize the Cargo Fuel Surcharge (CFS) system starting January 1, 2025. To assist shippers with these surcharges, the Council has published a summary of the CFS rates from various airlines on its website. It is important for shippers to note that these surcharges can vary significantly between airlines, and they should ensure they are well-informed to avoid being taken advantage of.
There are two major driving forces shaping the logistics and supply chain management industry, namely technological transformation and Environmental, Social, and Governance (ESG) initiatives.
Thanks to the Trade and Industrial Organization Support Fund from the Trade and Industry Department, the Council launched the project “Empower the Logistics Industry and Hong Kong Enterprises to Implement Digital Transformation and Achieve Competency in Hong Kong” in 2024. This initiative included 2 conferences, 8 thematic seminars, 2 study missions, 50 logistics process interviews, and a comprehensive project report. The goal was to support the digital transformation of logistics and trading businesses in Hong Kong. This project followed an earlier Industry 4.0 initiative by the Council, which aimed to assist Hong Kong logistics companies to adopt the Logistics 4.0 framework.
The Council also organized a study mission to Huangzhou and Ningbo in September, enabling participants to explore technologies relevant to their industry and everyday life. Similarly, in October, the Council arranged a visit to Nansha to focus on logistics-related technologies.
Regarding the other major driving force of Environmental, Social, and Governance (ESG) initiatives, the Council organized seminars and delivered presentations at various conferences to raise awareness and encourage participation. With support from the Transport and Logistics Bureau’s Smart and Green Logistics Scheme, the Council offered certificate training courses for industry practitioners, including the Executive Certificate Course in Sustainability and Green Transport and Logistics, as well as the Integrated Professional Course in Sustainable Green Logistics focusing on ESG, SDP, and Carbon Emissions Calculation. As global awareness and requirements continue to grow, ESG will remain crucial to the Council’s efforts in the coming years.
We also dedicated considerable effort to knowledge advancement and talent development. We organized courses on dangerous goods and collaborated with SPACE, the University of Hong Kong, to offer the Certificate Course in Shipping and Logistics, among other programs.
The Council and the Hong Kong Logistics Association are the leading organizations behind the inaugural Hong Kong NextGen Logistician Awards. The Hong Kong’s NextGen Logistician Awards is an annual award for the logistics industry advocated by the HKSAR Government in the Action Plan on Modern Logistics Development and organized through collaboration of various sectors of Hong Kong’s logistics trade with the support of the Hong Kong Logistics Development Council. It aims to recognise and encourage young talents in the logistics industry who have made significant achievements and shown remarkable potential in innovative, high-end, smart and green logistics
By showcasing the success stories of award winners, the initiative seeks to highlight new directions in modern logistics and attract more young people to the industry, fostering its ongoing growth. The pinnacle of the event, the Award Ceremony, was held in November at the Asian Logistics-Maritime-Aviation Conference.
To further attract young talent, the Council collaborated with several industry organizations to host a sharing session at the College of Professional and Continuing Education, Hong Kong Polytechnic University, during Maritime Week in November. This session highlighted career opportunities in the maritime industry, featuring five prominent emerging figures who shared their success stories with the audience.
The Council organized the session titled “Shifting Supply Chains – Outlook, Challenges, and Opportunities” at the SCM & Logistics Forum during the Asian Logistics-Maritime-Aviation Conference in November 2024. With manufacturing activities and supply chains expected to accelerate, the session aimed to share insights and foresights from experts and consultants. Additionally, the Council organized a visit to Laos in June. These study missions are integral to the Council’s efforts to help the industry in identifying new markets and investment opportunities.
The year 2024 concluded with the announcement that Donald Trump would become the President of the United States, signaling significant changes ahead. 2025 is expected to be a busy year for the Council.
NAVIGATING CHALLENGES AND OPPORTUNITIES IN GLOBAL SUPPLY CHAIN FOR 2024
Shippers are facing significantly high freight rates, unreliable schedules, and increasing delays in ocean shipping for 2024.
The Asian-Europe trade has been disrupted by Houthi attacks on ships in the Red Sea, prompting many shipping lines to reroute around the Cape of Good Hope instead of using the Suez Canal. According to data from the Shanghai Shipping Exchange, freight rates 6 folds surged from USD 1,020 per TEU in January to US$6,000 in July. Although rates dropped to around US$3,000 by December, they remain relatively high.
In addition to high freight rates, shipping lines have introduced new surcharges, including Maersk’s Transit Disruption Surcharge of USD 200 per container, along with other fees such as the Peak Season Surcharge, Carbon Emission-related Surcharges, U.S. Port Strike Surcharge. Some shipping companies have significantly increased overall freight rates.
On the other hand, schedule reliability and ship delays have deteriorated to unacceptable levels. According to Sea-Intelligence, schedule reliability fell below 50% in January and remained between 50-60% for most of 2024. The global average delay ranged from 5 to 6 days. Both indices were significantly higher than pre-pandemic levels, indicating extremely unsatisfactory service.
In the first half of 2024, the transpacific trade faced significant challenges due to the Panama Canal’s drought situation, which reduced traffic by two-thirds. According to the Drewry Index, east-bound freight rates rose from US$1,138 per FEU in March 2023 to US$4,081 in March 2024, and then doubled to US$7,908 in July 2024. This drastic reduction in capacity, coupled with freight rates nearly eight times higher, caused immense hardships for shippers. Additionally, labor strikes at eastern coast ports in October, despite being short-lived, further exacerbated the situation.
The Hong Kong Shippers’ Council has been consistently updating shippers on developments and providing advice on mitigating challenges through Shipping Alerts, the website’s News Portal, and circulars. Shippers must remain vigilant about these changes.
In November, global shippers convened in Brussels, Belgium, to establish action plans aimed at safeguarding and advancing the interests of shippers. The Global Shippers’ Alliance (GSA) discussed the Shippers’ Bill of Rights, addressing various topics including ESG, free and fair trade, supply chain security, and e-commerce, as well as seamless customs processes. The GSA also met with the EU Trade Directorate General to gain insights into upcoming policies and trade forecasts. Meanwhile, the Asian Shippers’ Alliance (ASA) held a separate meeting to explore shared interests.
In 2024, the industry saw a continued decline in Hong Kong Port’s throughput. According to Alphaliner, Hong Kong ranked 13th globally by year-end. Both public and private sectors in Hong Kong were eager to reverse this downward trend. The Council has actively contributed to this effort by focusing on various initiatives, including expanding cargo sources and catchment areas, retaining stakeholders, enhancing related professional services, developing talent and skilled labor, preparing for green shipping, and fostering cooperation among regional ports. These efforts were part of the Budget 2024/25 and Policy Address 2024 consultation processes and included participation in studies by various think tanks and consultants, as well as submissions regarding the three action plans released by the Transport and Logistics Bureau. The Council aims to provide Hong Kong shippers with more logistics service options and high-quality professional services.
On the airfreight front, we are pleased to note that in 2024, Hong Kong International Airport retained its status as the global leader in cargo throughput among airports. We recognize that e-commerce has emerged as a key driver of business and cargo volume. The Council organized a visit to the HKIA Dongguan Logistics Park and actively supported its promotion. We are optimistic about the success of this initiative to expand the catchment area for Hong Kong air cargo through more cost-effective and competitive operations.
The Council also supported the Civil Aviation Department’s decision to liberalize the Cargo Fuel Surcharge (CFS) system starting January 1, 2025. To assist shippers with these surcharges, the Council has published a summary of the CFS rates from various airlines on its website. It is important for shippers to note that these surcharges can vary significantly between airlines, and they should ensure they are well-informed to avoid being taken advantage of.
There are two major driving forces shaping the logistics and supply chain management industry, namely technological transformation and Environmental, Social, and Governance (ESG) initiatives.
Thanks to the Trade and Industrial Organization Support Fund from the Trade and Industry Department, the Council launched the project “Empower the Logistics Industry and Hong Kong Enterprises to Implement Digital Transformation and Achieve Competency in Hong Kong” in 2024. This initiative included 2 conferences, 8 thematic seminars, 2 study missions, 50 logistics process interviews, and a comprehensive project report. The goal was to support the digital transformation of logistics and trading businesses in Hong Kong. This project followed an earlier Industry 4.0 initiative by the Council, which aimed to assist Hong Kong logistics companies to adopt the Logistics 4.0 framework.
The Council also organized a study mission to Huangzhou and Ningbo in September, enabling participants to explore technologies relevant to their industry and everyday life. Similarly, in October, the Council arranged a visit to Nansha to focus on logistics-related technologies.
Regarding the other major driving force of Environmental, Social, and Governance (ESG) initiatives, the Council organized seminars and delivered presentations at various conferences to raise awareness and encourage participation. With support from the Transport and Logistics Bureau’s Smart and Green Logistics Scheme, the Council offered certificate training courses for industry practitioners, including the Executive Certificate Course in Sustainability and Green Transport and Logistics, as well as the Integrated Professional Course in Sustainable Green Logistics focusing on ESG, SDP, and Carbon Emissions Calculation. As global awareness and requirements continue to grow, ESG will remain crucial to the Council’s efforts in the coming years.
We also dedicated considerable effort to knowledge advancement and talent development. We organized courses on dangerous goods and collaborated with SPACE, the University of Hong Kong, to offer the Certificate Course in Shipping and Logistics, among other programs.
The Council and the Hong Kong Logistics Association are the leading organizations behind the inaugural Hong Kong NextGen Logistician Awards. The Hong Kong’s NextGen Logistician Awards is an annual award for the logistics industry advocated by the HKSAR Government in the Action Plan on Modern Logistics Development and organized through collaboration of various sectors of Hong Kong’s logistics trade with the support of the Hong Kong Logistics Development Council. It aims to recognise and encourage young talents in the logistics industry who have made significant achievements and shown remarkable potential in innovative, high-end, smart and green logistics
By showcasing the success stories of award winners, the initiative seeks to highlight new directions in modern logistics and attract more young people to the industry, fostering its ongoing growth. The pinnacle of the event, the Award Ceremony, was held in November at the Asian Logistics-Maritime-Aviation Conference.
To further attract young talent, the Council collaborated with several industry organizations to host a sharing session at the College of Professional and Continuing Education, Hong Kong Polytechnic University, during Maritime Week in November. This session highlighted career opportunities in the maritime industry, featuring five prominent emerging figures who shared their success stories with the audience.
The Council organized the session titled “Shifting Supply Chains – Outlook, Challenges, and Opportunities” at the SCM & Logistics Forum during the Asian Logistics-Maritime-Aviation Conference in November 2024. With manufacturing activities and supply chains expected to accelerate, the session aimed to share insights and foresights from experts and consultants. Additionally, the Council organized a visit to Laos in June. These study missions are integral to the Council’s efforts to help the industry in identifying new markets and investment opportunities.
The year 2024 concluded with the announcement that Donald Trump would become the President of the United States, signaling significant changes ahead. 2025 is expected to be a busy year for the Council.