Officials in China’s new economic zones are hoping cheap warehousing and hassle-free customs procedures will encourage logistics and storage firms supplying Hong Kong’s domestic market to relocate to the Pearl River Delta. But not many firms seem interested in moving. “It is almost unheard of to have any product that is for local Hong Kong consumption to be stored in China because the turnaround lead time is not workable,” said Raymond Chan, General Manager of logistics firm Cargo Freight Services. Last year the central government announced plans to establish three development zones in Nansha, Hengqin and Qianhai along the Pearl River, part of a wider effort to develop and integrate southern China, Hong Kong and Macao into a single economic hub. Initiatives including preferential tax treatment and liberalized financial reforms were pitched as incentives to lure business. Another idea is to create a seamless customs zone connecting Hong Kong to bonded warehouses and free-trade port areas in the delta. “The policy directions have been given out but the details are not yet finished,” said Hong Kong Trade and Development Council Economist Wing Chu. The Qianhai economic zone in Shenzhen has 300 registered logistics firms, including 130 from Hong Kong. This represents 15.2% of companies in the zone, according to local government data from October last year. The 800 square kilometer site at Nansha includes an established logistics park, one of two deep-water ports on the mainland, and a rail-road-sea transport network. Last month Kerry Logistics Network Chairman George Yeo visited Zhuhai seeking land for warehouses. Completion of the Hong Kong-Zhuhai-Macao bridge would provide more opportunities for logistics providers as there was a lack of land and warehouse facilities in Hong Kong, Yeo said. Oriental Logistics Managing Director Gilbert Lau said limited warehouse space had contributed to rents doubling in recent years, forcing up consumer prices and pushing logistics operators further into the New Territories. Despite the excess capacity and lower warehouse rents in the mainland’s southern areas, Hong Kong logistics firms are wary of storing goods there given final-mile delivery costs and border formalities, the South China Morning Post reports.