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March 4, 2023
The trading and logistics services industry accounted for 23.7% of Hong Kong’s GDP (HK$651 billion) and employed 622,600 persons (or 16.9% of total employment). Of this, logistics industry accounted for 6.2% of GDP (HK$169.3 billion) and 5% of total employment (184,000 persons). To maintain the competitiveness of Hong Kong's logistics industry, the Government has enhanced the "Pilot Subsidy Scheme for Third Party Logistics Service Providers" (the Pilot Scheme) since January 1 this year to provide greater incentives for third party logistics service providers to apply technology and make wider use of smart logistics solutions to enhance efficiency and productivity.
Subsidy ratio raised from "1:1" to "2:1"
The global logistics industry is moving towards smart logistics, including automation, digitalisation and artificial intelligence. To support the upgrading and transformation of the local logistics industry, especially small and medium-sized third party logistics service providers, the Government launched the $300 million Pilot Scheme in October 2020 to provide each logistics service provider with a maximum subsidy of $1 million on a "1:1" matching basis (i.e. the Government and the applicant will each contribute half of the funding for a technology project).
To further encourage the industry to apply for subsidy under the Pilot Scheme, the Government has raised the subsidy ratio to "2 (Government):1 (applicant)" with effect from 1 January this year, to ease the cash flow of the applicants in carrying out the project. Meanwhile the maximum grant of $1 million for each applicant remains unchanged.
What is third party logistics services?
Third party logistics services refer to value-added services provided during the logistics processes, including tracking and tracing, monitoring, inventory management, just-in-time delivery, pick and pack, labelling, international freight forwarding and so forth. In line with the Government’s policy objective to promote Hong Kong as an international logistics hub, the business of the applicant enterprises should be related to either inbound or outbound goods, rather than goods purely for domestic consumption.
Projects covered by Pilot Scheme
The Pilot Scheme covers all projects that enhance the productivity and competitiveness of Third party logistics service providers through the application of logistics technologies, including automation technologies, automated guided vehicles (AGVs), robots, artificial intelligence technology applications, technology network infrastructure, electronic data interchange (EDI), warehouse/goods distribution center management system (WMS), logistics traffic management system (TMS) The project will include the following: the Logistics Management System (TMS), Real Time Positioning System (RTPS), Enterprise Resource Management System (ERP), Internet of Things (IoT) and Radio Frequency Identification (RFID) technology application, Logistics and Supply Chain Analysis System, etc.
As of the end of February 2023, a total of 173 projects have been successfully applied for funding under the Pilot Scheme, involving some HK$103 million, effectively assisting the local logistics industry to upgrade and transform. Some of the successful examples include:
How to Apply
The Pilot Scheme is open for applications all year round. For enquiries and applications, applicant enterprise can contact the Hong Kong Productivity Council (HKPC), the implementation partner of the Pilot Scheme (Telephone: 2788 6077; email: tplsp_sec@hkpc.org).
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