Hong Kong: a logistics powerhouse across sea and sky

Logistics today looks a lot different than it did only a handful of years ago. Infrastructure is more connected and digitisation has made moving and paying for goods faster, safer and easier. But, at the same time, these advancements are only as valuable as the ability to access them.

This is where Hong Kong stands out as a premier logistics hub and a go-to market for businesses looking to capture opportunities in the wider Asia region. Hong Kong’s cargo seaport and airport are among the busiest in the world, receiving and processing millions of tons of goods annually. It also boasts a network of over 240 international container services connecting to more than 460 destinations weekly, enabling efficient supply chain management and the timely delivery of goods¹.

In addition, streamlined customs clearance processes – supported by government initiatives such as the Action Plan on Modern Logistics Development and the Intermodal Transshipment Facilitation Scheme – make cross-border shipping faster and more secure.

Where trade flows quickly

As a duty-free port, Hong Kong offers trade-friendly regulations that facilitate the import and export of goods without incurring customs tariffs. This significantly reduces costs and simplifies logistics processes for businesses operating in the region. The absence of import duties can also make it an attractive option for companies looking to streamline their supply chains.

The city is also proving to be an innovation hub for logistics payments system providers such as US firm PayCargo, which chose Hong Kong as its first point of entry in Asia. By partnering with a local smart solutions provider, Autotoll International, and through the support of HSBC as the settlement bank, PayCargo is contributing to the digitisation of logistics payment processes in the region. Autotoll’s support also enables data feeds from logistics players to be automated, speeding up document validation.

The ongoing growth of the trade ecosystem in Hong Kong also brings benefits to local logistics companies. Digital payments are making trade processes more efficient, reflected in the strong uptake of cashless payments by logistics players to accelerate the movement of imports. Meanwhile, the improved flow of automated trade data provided by digital platforms is enabling companies to make faster decisions and adapt to a shifting logistics landscape, altogether making importing goods simpler, faster and more secure.

These advancements build upon Hong Kong’s advantages as the world’s largest air cargo hub and well as the regional headquarters for over 1,300 multinational corporates² – all of whom stand to benefit from minimised customs delays, just-in-time delivery systems and lower excess inventory costs.

A critical connection point

Hong Kong's proximity to mainland China as well as its connectivity to markets abroad enhances the city’s role as a transshipment hub. This proximity allows for quick movement of goods from factories in mainland China to global markets via Hong Kong SAR, leaning on its advanced logistics infrastructure and efficient customs procedures.

The growing digital connectivity of the city across borders is helping companies optimise their supply chains and respond more rapidly to market demands as they expand. This is particularly relevant for businesses pursuing a ‘China Plus One’ strategy to diversify their manufacturing and supply chain operations. In Asia, different markets have positioned themselves as offering advantages for certain kinds of manufacturing outside of mainland China. For example, Vietnam has become known for electronics and textiles, Thailand is regarded for automotives, and Indonesia has become a go-to for information technology and consumer goods.

These have spurred demand from businesses for digital banking solutions that can help enhance overseas connectivity, and provide faster financial support. HSBC’s Digital Merchant Financing is a key example of this. The solution’s integration with eCommerce platforms, logistics services and data providers allows loans to be disbursed to businesses based on their real-time business performance data, without requiring tangible collateral in return. This facilitates faster capital access, helping them pursue potential opportunities more efficiently.

Our TradePay solution provides another means for businesses to draw loans digitally, while also allowing them to make just-in time payments to suppliers immediately. This can improve cash flow and could strengthen supplier relationships by enhancing control over the timing of trade payables.

It's another reason why digitisation is writing a new chapter in the global trade and logistics story in Hong Kong and across Asia. By simplifying international payments, making cross-border business easier and less costly, and streamlining access to trade finance, banks such as HSBC are helping businesses stay ahead of the trade curve and remain better positioned for growth.

Where logistics goes from here

It’s clear that Hong Kong is focused on the right things: supportive government logistics initiatives complemented by world-class infrastructure, established connectivity to global markets and a priority on digital payment and trade solutions to make logistics and cross-border business easier.

As the trends around digitisation and smart logistics continue to gain momentum, Hong Kong has a unique opportunity to reinforce itself as fit to lead in the future of trade. Given the enthusiasm among the business community for these advancements, all signs show that it is well on its way.