Medium and small sized logistics companies in Hong Kong are in big trouble as the oil prices continue to rise, Xinhua reported, quoting Stephen Ip, vice president of Hong Kong Logistics Association.
Experts estimate that cost faced by Hong Kong logistics companies would grow 15 to 20 per cent when the oil price surpassed US$100 a barrel, said Mr Ip, adding that carriers could improve a fuel surcharge and freight rate adjustment to remedy higher costs.
But many smaller operators face too much competition in Hong Kong with more than 30,000 registered logistics service providers seeking to slice of the market, said Xinhua.
For Hong Kong logistics companies, surging oil prices have added fuel to the flames as export and transshipments from mainland China to the US are slowing down because of weaker American consumer demand, Mr Ip said.
Oil prices are expected to rise to $110 soon, reaching as high as $120-$150, pushing up export costs and making it harder for these companies to survive, he added.
One major Hong Kong forwarder said he expected hundreds of logistics companies in Hong Kong to close after the oil price passed $100.
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