Hong Kong port: “Shippers will shift more cargoes to Shenzhen ports”

Hong Kong port: “Shippers will shift more cargoes to Shenzhen ports”

Hong Kong port: “Shippers will shift more cargoes to Shenzhen ports”

   The port of Hong Kong has acknowledged that it will attract a decreasing share of the container cargoes generated by the Pearl River Delta in southern China, as the use of ports of Shenzhen on the mainland continue becomes increasingly common among shippers.
   Hong Kong “will continue to lose market share” to the Shenzhen ports on the mainland, Alan Lee, chairman of the Hong Kong Container Terminal Owners Association, told the TOC conference in Hong Kong Today.
   In 2004, the port of Hong Kong increased its container throughput 7.5 percent to 22 million TEUs, while the Shenzhen ports of Yantian, Shekou and Chiwan boosted their combined box volumes 28 percent to 14 million TEUs. The Shenzhen ports are also planning a large-scale expansion of their container facilities. Most industry observers expect Shenzhen to overtake Hong Kong in TEU volumes within a few years.
   “Hong Kong has a $300 cost disadvantage (per 40-foot container) compared to the port of Shenzhen,”    Lee said, citing additional trucking costs to move mainland cargoes across the border and a higher terminal handling charge in Hong Kong than at mainland ports.
   According to industry sources, customs red tape and long queues for trucks crossing the border add to the difficulties of moving Chinese cargoes via Hong Kong.
   Due to the rapid growth of cargo volumes in the Pearl River Delta, which includes both Hong Kong and Shenzhen, the port of Hong Kong is still expected to increase its traffic in the future despite its loss of market share. “Looking ahead to the year 2010, we project that this region will handle 58 million TEUs,” Lee noted.
   Sunny Ho, executive director of the Hong Kong Shippers’ Council, said Hong Kong businesses were among the major investors in manufacturing plants in southern China. He said the port of Hong Kong could not accommodate container volume growth on its own, without the increasing role played by the Shenzhen ports.
   Ian Richardson, director of tradelane development, Asia-Pacific, at UPS Supply Chain Solutions, said Chinese shippers are increasingly shipping on Free On Board (FOB) Shenzhen or equivalent terms, instead of FOB Hong Kong. This means that the Chinese exporter does not bear the extra cost and distance of moving goods to Hong Kong. “There’s the competition    for Hong Kong,” Richardson told American Shipper.
   Sandra Lee, permanent secretary of Hong Kong’s Economic Development and Labor Bureau, cited several measures to integrate the economies and logistics activities of Hong Kong and other parts of the Pearl River Delta. She told the TOC conference that the construction of a bridge connecting Hong Kong, Macau and Zhuhai on the western side of the delta would “enlarge the catchment area of Hong Kong port.” The Chinese authorities have recently approved the construction of the bridge.
   The free trade agreement between Hong Kong and the mainland, called the Closer Economic Partnership Agreement, is also seen as facilitating trade and logistics between the two sides. “It gives Hong Kong companies access to China’s market before it opens under the World Trade Organization,” Lee said.