Regulations regarding the entry of e-cigarettes for transhipment into Hong Kong are impacting air cargo volumes out of Hong Kong.

The Hong Kong Association of Freight Forwarding and Logistics (HAFFA) said it held an "emergency meeting" last September 9 to discuss the government's ban on the transhipment of e-cigarettes by land.

"[This] move which has stifled the freight logistics industry environment and negatively impacts the livelihoods of its employees," HAFFA said.

Last April 30, the Smoking Ordinance 2021 came into operation and stipulates that no person shall import alternative smoking products such as electronic cigarettes, heated tobacco products and herbal cigarettes.

Although air transhipment cargo and transit cargo which remains on board aircraft and vessels is exempted, the Ordinance does not allow transhipment of cargo not requiring processing to be imported into Hong Kong by land and then transshipped overseas.

HAFFA noted that a survey among its members suggests that affected e-cigarette cargo is estimated at 330,000 tons per year, which translates to a loss to Hong Kong of approximately 10% of our annual export volume by air.

The value of this re-export cargo affected by the ban is estimated to exceed CNY120 billion (US$17.33 billion).

"Since the Legislative Council passed the Ordinance in October last year, the Association has continued to receive a large number of complaints from our members and other industry stakeholders, reflecting that the Ordinance has had a seriously detrimental effect on the business environment," said Gary Lau, chairman, HAFFA.

"We have written to the Chief Executive/Policy Bureau on this matter four times and conducted an industry questionnaire in January this year," he added.

"The Ordinance has led to a serious decline in Hong Kong's overall air export volume, causing the industry, airlines, cargo terminals and Hong Kong International Airport to lose hundreds of thousands of tons of re-exports every year," Lau further said, noting that "this is bound to shake Hong Kong's status as a regional transhipment hub, and people's livelihoods have been dealt a huge blow."

"The Association agrees with the original intention of the legislation to protect public health and establish a smoke-free Hong Kong, but at the same time, we strongly urge the government to allow the freight and logistics industry to restore the transhipment mode which is vital to the survival of the industry," the HAFFA chief added, pointing out that the organization "object" to the implementation of the Ordinance in a "one-size-fits-all manner."

"We will continue to do everything in our power to continue to work with the government to expand the scope of the exemption under the Ordinance to include land- air transhipment mode," Lau said.

The meeting was held with industry organisations, the deputy financial secretary Michael Wong Wai Lun, secretary for transport and logistics Lam Sai Hung, and Frankie Yick Chi Ming, legislative council member for the transport functional constituency.

HAFFA, established in 1966, now has over 320 corporate members.

"HAFFA aired opinions, sought solutions, and proposed a new set of secured land transportation methods to prevent illegal e-cigarette products from entering the black market through land transhipment with the aim of alleviating government concerns," the organization said in its statement.