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Introduction
Nowadays, Hong Kong is experiencing an industrial transition and upgrading towards
knowledge economy, logistics firms have unprecedented development opportunity as
economic integration with the Pearl River Delta (PRD), China's access into the World
Trade Organization (WTO), the Closer Economic Partnership Arrangement (CEPA)
between the Central Government of China and Hong Kong Government, as well as the
high contribution of logistics management to regionaleconomic development.
However, the logistics firms in Hong Kong are far from capitalizing from these great
opportunities. Small- and medium-sized logistics enterprises (SMLEs), accounting for 98%
of Hong Kong enterprises, are constrained by inherited and derived operation problems.
These problems, such as lack of long-term vision and strategy, mentality of SMLE owners
and their opportunistic behaviour, small scale of business operations and tight cash
flow, outdated logistics management concepts and skills, heavy reliance on low cost are
operations, nominal added values and innovation in logistics services etc., prohibiting
them to appreciate the benefits of CEPA and economic integration. Instead, SMLEs are
suffering much fierce competitions from multinational companies in the high-end logistics
sectors, and from local logistics firms in the PRD region in
low-end logistics sectors. Actually, they face an increasingly difficult challenge in
the economic transition, and they are in a vulnerable position when they expand their
logistics business in the Mainland.
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