Feasibility of Establishing a Humanitarian Logistics Hub in Hong Kong - Case Study Example

Feasibility of Establishing a Humanitarian Logistics Hub in Hong Kong Humanitarian logistics is a field of logistics which focuses on arranging the warehousing and delivery of products during complicated emergencies or natural disasters to individuals and areas which have need affected. Even though they have been largely used in commercial supply chain, logistics is one of the most essential elements currently in disaster relief operations. The plan of cooperation between teams, quantity and type of resources, specialization of teams taking part in the operation, way of storage and procurement of the products, equipment of tracing and methods of transportation to disaster stricken regions, are among the most significant matters that are directly linked to humanitarian logistics. A study of the strategic humanitarian landscape indicated a decrease in financing in relation to escalating costs and demand along with a connected push toward an extended efficiency, effectiveness, consolidation, and value for finances. Specifically, humanitarian players increasingly utilize external services providers to enhance receptiveness to adversities, attain decreased costs, getting hold of external proficiency. For activities that require physical locations, for example, ease of access, storage of relief commodities, lower storage and transport costs, and closeness to disaster affected locations is emphasized (Jahre, Jensen and Listou 1010). This paper will look at the feasibility of establishing a humanitarian logistics hub in Hong Kong. The earthquake and consequent tsunami which took place in 2004 in South Asia claimed almost two hundred and thirty thousand lives and displaced approximately 1.7 million individuals. Over forty nations and seven hundred nongovernmental institutions offered humanitarian help. In addition, the reaction from the private sector was extraordinary, for instance, companies from the United States of America alone contributed more than $565 million, both in kind and in cash. Also, the role of logistic companies, for example, DHL, FedEx, and UPS together with their associate aid agencies was significant in offering subsidized or free logistics and transportation. The entire universe responded by contributing over $13 billion and instigating the most significant aid effort in history. The 2004 Indian Ocean tsunami saw logistics applied to disasters attain enhanced interest from both practitioners and researchers. Furthermore, the tsunami offered evidence that the adequacy of the emergency aid response pivots on logistic efficiency and speed. Consequently, this enhances the awareness of the essential duty of logistics in humanitarian relief activities (Jahre, Jensen and Listou 1013). Establishing a humanitarian logistics hub in Hong Kong will require systems and processes which will help mobilize knowledge, resources, skills, and people so as to assist vulnerable individuals affected by adversity. Humanitarian logistics specifically refers to the events of planning, executing, and managing the cost-effective, adequate flow of and storage of materials and commodities as well as associated details from the original point to the point of use for the purpose of averting the suffering of vulnerable individuals. In addition, it will be significant to guarantee effective and efficient delivery, such that the required individuals and goods reach those who are affected by an emergency, in establishing a humanitarian logistics hub in Hong Kong. Nonetheless, optimizing the logistic implementation entails that all the relations among those who are involved are managed using an inclusive approach to effectively and efficiently organize inter-organizational performance, make the most of efficiency along the emergency supply chain, and avert redundancy (Jahre, Jensen and Listou 1016). Supply chain management and logistics will both be significant in correctly setting the response to a disaster in Hong Kong. The business confidence in Hong Kong is high. Supplementing its leadership duty as a global logistics hub, Hong Kong is also one of the Asian continent’s foremost international business centres. It has 3,580 regional headquarters and regional office. In addition, Hong Kong is the eleventh largest trading region in the universe and the level of business confidence is extremely high. In 2010, the Business Confidence Survey performed by the British Chamber of Commerce in that region indicated extremely elevated levels of satisfaction in business. 97% of those who took part in the survey perceived the business environment in Hong Kong as very or somewhat satisfactory. The foremost reason highlighted for this elevated degree of satisfaction were identified as infrastructure and free port status, geographical location, public safety and security, communication network, and taxation system. Therefore, establishing a humanitarian logistics hub in Hong Kong will be simple due to the business confidence (Jahre, Jensen and Listou 1017). Trade and logistics in this region will also play a part in establishing a humanitarian logistics hub in Hong Kong. The free port status and world class infrastructure are necessary components in Hong Kong’s lasting accomplishment as a foremost logistics hub. Hong Kong has been long recognized as a global sourcing centre and regional trading hub (Jahre, Jensen and Listou 1019). Trade and logistics is perceived to be the largest of the four economic pillars of Hong Kong. It constitutes 24% of employment and 24.1% of Gross Domestic Product. This means that in setting up a humanitarian logistics hub in Hong Kong, there will be more people who will be employed and the Gross Domestic Product will also increase. Hong Kong International Airport has been the most occupied airport for international cargo for a number of years. In 2010, Hong Kong International Airport dealt with 4.1 million tonnes of cargo, allowing Hong Kong to move beyond Memphis America to become the leading cargo airport. Hong Kong International Airport’s properly developed global network, ecosystem-wide efficiencies, accumulated critical mass, and extensive connectivity all come together to facilitate the long standing leadership position of Hong Kong in air freight, as both a leading gateway and a global hub. Hong Kong International Airport accommodates 90 airlines operating 5,800 flights in a single week. This universal network of airline connection is far beyond that of Hong Kong’s bordering neighbours. In addition, Hong Kong International Airport is an essential component of the local economy. More than 30% of exports in Hong Kong are transported by freight. This represents more than $ 100 million of commodities. The airport utilizes a two way runway system supporting sixty air traffic movements in an hour, and approximately eight hundred and eighty aircraft movements in a single day. This enhances the likelihood of establishing a humanitarian logistics hub because it will be effortless to transport the products that may be needed in a time of disaster (Jahre, Jensen and Listou 1019). Also, Hong Kong has the leading container port. This means it will be unproblematic for an individual or company wishing to establish a humanitarian logistics hub to ship the commodities that may be needed when a disaster occurs (Jahre, Jensen and Listou 1019). Hong Kong’s extensive global network and far-reaching connectivity makes it the principal container port in South China. In the South China group, the numerous ports handle a total of 60 million containers in a year. Out of the 60 million containers, more than 23 million containers are processed in Hong Kong. Hong Kong Port is ranked third among all ports in the world. It has 9 container terminals, and all of them are operated and owned by different private organizations. In addition, the Hong Kong Port is erved by approximately 80 shipping companies, offering 450 container-liner services in a week to over 500 destinations all over the world. Hong Kong will leverage its distinguished and prolonged history as a principal nautical base and continue to extend its duty as a foremost regional marine service centre and international transshipment hub even as the developing China ports deal with more direct cargo movements in and out of the mainland. The feasibility of establishing a humanitarian logistics hub in Hong Kong is also high due to support from the government. The Hong Kong administration completely supports the logistics and trade sector (Jahre, Jensen and Listou 1020). It was once noted that the Secretary of Transport and Housing, Hong Kong asserted that the government had undertaken a number of studies and measures which would play a part in upgrading facilities for more adequate supply chain activities and freight movements. In a 2011 budget address by the Financial Secretary, he promised to make sure that Hong Kong can handle the growth of air traffic and to strengthen the maritime service cluster. Conclusion In humanitarian supply chains, adequacy guarantees that organizations save time, and when time is saved, more lives will be saved. Also, adequacy guarantees that an organization saves costs, and when more costs are saved, more lives will be helped. In the different stages of setting up a humanitarian logistics hub, the input of different actors is necessary. With respect to humanitarian logistics stream, it is remarkable that the change between the different phases incorporates the change in focus from speed to decrease in cost in terms of operational performance. In addition, Hong Kong has a desirable repute of offering connectivity, security, efficiency, speed, and transparency, which together with its enduring free port standing makes it the most ideal humanitarian logistics hub. It may also be asserted that Hong Kong acts as the most ideal humanitarian logistics hub by means of its tactical location, its sustainable competitive advantage, and a government that is business friendly. Finally, it will be beneficial to establish a humanitarian logistics hub in Hong Kong as it will advance disaster-response capacity in the region and supplement the abilities present in different areas. Work Cited Jahre, M., Jensen, L., and Listou, T. “Theory Development in Humanitarian Logistics: A Framework and Three Cases.” Management Research News 32.11 (2009): 1008–1023. Print. Read More