Issue No 9: November 2004
Budget cuts but proposal quality rises
Q&A: Monitoring and assessment rules: Update
Web system closes gap between clients and suppliers
Algorithm to help Hong Kong keep competitive edge
Project integrates supplier networks
Cooperative conflicts ‘strengthen decision-making’
Pay-back from staff investment
Human capital needs change as economy opens
Artificial Intelligence helps rostering

Hong Kong could become more competitive and even more efficient in cargo handling as a result of research being carried out at the Hong Kong University of Science and Technology.
Researchers are looking at how best to manage transportation resources at three levels; within facilities such as cargo terminals, within city boundaries, and at a regional level between Hong Kong and the Pearl River Delta (PRD) area.
“Hong Kong is like nowhere else in the world,” said Principal Investigator Prof Raymond Cheung, “because conditions are complex and dynamic.”
His work is focused on providing models and solutions through algorithms that bring flexibility to planning by allowing users to factor in changes as they occur. Prof Cheung said: “Routing used to be planned well in advance and then it was difficult to change anything, but that does not suit a dynamic place like Hong Kong where the situation can change all the time.”
He added: “In terms of operations at container and air cargo terminals, Hong Kong is extremely efficient. But connections between terminals and the final destinations are very weak.”
At the regional level, he said it is about US$200 more expensive to route a container truck from Dongguang to Hong Kong, than to the nearby Chinese port of Yantien. “We may never be cheaper than Yantien but maybe we can reduce the difference to US$20,” he said.
Part of the inefficiency of the Dongguang-Hong Kong route is the Chinese authority’s “four-up four-down” regulation. The regulation says that the same Hong Kong driver, tractor, trailer and container making a delivery in the PRD area must return simultaneously to Hong Kong from the same China drop-off point.
“Very likely that means the driver can make only one trip a day and that the container returns empty. The reason for the constraint stems from a bygone era of cross-border smuggling but Prof Cheung believes the rule will be relaxed within a few years.
Barges, however, have more flexibility as they can return to Hong Kong from a Chinese port other than the one where they delivered containers. Another consideration for logistics providers, said Prof Cheung, maybe where to park an empty container; for example leave it in Hong Kong or near a manufacturing centre in China.
“My understanding is that it’s decided on an ad hoc basis,” he said. “Our challenge is how to build a regional network offering a reliable, cost-efficient service.”
At the Hong Kong level, one problem for transporters is that there is no zip code, said Prof Cheung, so that pinpointing the location of a delivery vehicle at any time can be difficult. Other delivery problems include limited parking space, street restrictions, unpredictable road conditions, and vertical delivery required at multistorey warehouses.
At the facility level, Prof Cheung’s algorithms may be able to help increase the capacity of air cargo or ocean container terminals by better managing the freight flows. “We can help with the routing,” said Prof Cheung. “For example, if five containers arrive at the same time, they don’t all need to follow the shortest path. Routing some of them on a longer path may actually reduce the transportation time.”
To arrive at a workable algorithm, Prof Cheung needed to cooperate with experts in a variety of disciplines including data mining, engineering and software development. Having defined a situation for solving, a vital step is in explaining it in terms of mathematical language and vice versa. “So if we have a mathematical model, can we really interpret it using its industry language?” he said. “If we can do both, we have a very good understanding of the problem.”
The next step is to build the algorithm, which solves the problem. “Sometimes we can have a very good algorithm in the sense that, if everything is fixed, it works well. But if something changes in the model, will the algorithm still give a good solution? For the Hong Kong situation, the algorithm needs to be very robust.”
With the algorithm constructed, it needs to be translated into computer language so it can be graphically represented, then implemented and tested with assimilations.
Said Prof Cheung: “Certainly we can help Hong Kong cargo handlers reduce costs. I think the bigger impact will be that, if we can continue to offer a more reliable service, Hong Kong will continue to be a good choice.”

Principal Investigator
Prof Raymond K M Cheung :