Edinburgh Napier University

  Hong Kong freight forwarding services have flourished along with China's economic development. Manufacturing activities in the Pearl River Delta (PRD) have provided the Hong Kong logistics sector with many business opportunities. However, due to the changes in the business environment, the industry is facing many challenges: competition from other local logistics companies in China, a shrinking market share on the shipping side, and increasing operating costs. The study aims to answer two questions: will the PRD continue to serve as the manufacturing powerhouse of the world and will exporters in the PRD continue to use Hong Kong:5 airport and port? The findings of this research will help academia and practitioners better understand the opportunities and challenges facing the Hong Kong logistics industry. This research was carried out in two phases. First, the author conducted exploratory interviews with manufacturers, logistics service providers, and government officials. Second, two questionnaires (one for manufacturers and one for logistics service providers) were designed based on the interviews and the literature review. The results of this two-stage analysis indicate that manufacturing in the PRD will continue to demand forwarding logistics support from Hong Kong because the latter continues to offer competitive advantage in several aspects compared with competitors in China. The Hong Kong government's pro-business attitude has helped to maintain Hong Kong's competitive advantage as a logistics hub; thus, the integration of Hong Kong and PRD logistics service providers has further enhanced this advantage in the PRD. Finally, based on these findings, a number of recommendations are offered. The empirical part of the research was completed before the onset of the 2008/9 recession; hence, no reference to its effect has been included in this thesis. The work also excludes any specific reference to the issues of carbon footprints and related environmental concerns because these are not primary issues for the industry as seen by the governments of the PRD region.