When the Hong Kong government gets involved with the port and logistics business, anything is possible.
Hong Kong’s fearless leader Donald Tsang has just returned from a trip to Beijing to kiss the boss’ ring and receive pledges of cooperation with the city’s mainland neighbours in Guangdong Province.
The only items we are interested in are pledges to further develop the logistics services environment and improve Hong Kong’s position as a shipping hub.
We have heard it all before, though. Like the pledge to “streamline” the cross-border customs procedures that delay container truck drivers so they can only make one trip a day. For years this has helped erode the competitiveness of Hong Kong by adding to the cost of exporting containers via the port. The result: It is cheaper to export through neighbouring Yantian in Shenzhen port.
Another pledge Tsang brought home was to relax the costly licensing requirements for cross border vehicles. This issue was also identified years ago as being a contributing factor to increasing the cost of trucking a container across the border. The result: It is cheaper to export through neighbouring Yantian in Shenzhen port.
With cost playing a huge role in port choice for shippers, these issues are no small matter. Yet years after being identified, and after many pledges by the government that the problems would be addressed, little has been done.
Yet what remains most frustrating to the ports and shipping industry is that when the Hong Kong government does decide to do something, after consulting and pondering, and thinking and musing, it invariably arrives at the wrong decision.
The latest move by the Transport and Housing Bureau – responsible for Hong Kong’s transport and logistics sector – is to call for tenders for five sites in the city’s Kwai Chung port that will be used for high-value logistics services.
This idea has been knocking about for some time, and the reason the tender was delayed for so long is no doubt because of strong opposition from the city’s port operators. There is a simple reason for that – it is a bad idea.
Hong Kong topped the list of the world’s busiest container ports for many years because the terminal operators became masters of efficiency and making the most out of very limited space. Containers are stacked higher than elsewhere in the world, logistics facilities extend underground and not an inch of the berths and quays are left unused.
So for the government to give the 29.5-hectare sites to logistics operators is ridiculous. Some of the space is currently being used for container storage and the terminals want it to remain that way. Hutchison’s HIT, for instance, will have to find a home for 10,000 boxes, according to reports.
The chief worry for terminals is that the port will quickly fill with containers, forcing operators to turn away business that cannot be accommodated.
How this ties in with streamlining cross-border trucking to bring in more containers is anyone’s guess. But that’s what happens when you make it up as you go along.