Hong Kong on the rocks

In-Depth 1 Jul 2016 by WCN Editorial

Hong Kong continues to lose traffic, with volumes in H1 2016 down 10.5% on the corresponding period of 2015.

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The 9.2M TEU handled at the port, including mid-stream activity, compared with 10.2M TEU in the same period of 2015.

Hong Kong’s volumes have now dropped for 23 consecutive months, and there is a real risk that the port could fall further in the global league table of container ports this year.

The port of Hong Kong has been in decline for more than a decade, with its share of the all-important southern China market falling significantly over this period. Compared with its main rivals in the Pearl River Delta (notably Shenzhen and Yantian), it is more expensive and congested with only limited back-up land available for container storage purposes.

In addition, traffic movements across the border are often slow and delayed, while truck transport rates in Hong Kong are expensive.

Moreover, Hong Kong’s previous and long-held advantage in the value- added logistics and cargo-processing sectors is much less pronounced than it was, as high-tech and modern warehousing facilities have been constructed throughout southern China, including at the ports. It means cargo consolidation and activities such as mixing and matching, packaging and labelling are now being undertaken in China rather than in Hong Kong.

With the port seen as a strategic asset and vital contributor to the local economy, the Hong Kong Government is responding. In April 2016, it merged the Maritime Industry Council and the Port Development Council, and created the Hong Kong Maritime and Port Board (HKMPB).

The significance of the move can be seen from the fact that the new entity is chaired by Anthony Cheung, the secretary of state for transport and housing. However, it is hard to see any end in sight to Hong Kong’s decline as a major container port.

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This complete item is approximately 300 words in length, and appeared in the July 2016 issue of WorldCargo News, on page 33. To access this issue download the PDF here.