Hong Kong port’s days are numbered
The problems are well documented and in plain sight, but a lack of willingness to tackle them continues to undermine the competitiveness of Hong Kong.
Way back in the mists of 2004, the government of Hong Kong released its Port Masterplan: 2020. The plan, compiled by consultants GHK, took a comprehensive look at the port and its needs over the next couple of decades.
Naturally the government watered down the first draft, but the report’s findings were stark and carried an urgency that revolved around enhancing the port assets.
The Masterplan was submitted to the then Economic Development and Labour Bureau. It has since become the Transport and Housing Bureau – what housing has to do with transport is anyone’s guess. It doesn't exactly make the department more competent.
So anyway, in November 2004, the draft executive summary was released. The study found that while Hong Kong port was the dominant player on the South China direct export cargo market, it was fast losing share to the rapidly growing Shenzhen ports.
Hong Kong had 95 percent of South China’s direct ocean cargo market in 1996, but by the time the study began in 2003 that share had fallen to below 60 percent.
Without going in to great detail about the results of the study, it found that the principal competitive weakness of Hong Kong port viz a viz Shenzhen were the cost of trucking a box across the border, followed by higher terminal handling charges levied by the shipping lines calling at HK.
GHK found it cost US$333 more per TEU, and $296 per FEU, to export a South China container from Hong Kong compared to Shenzhen port. This made such a deep impression on the GHK analysts that they entered in bold, underlined type: Reducing Inland Transport Costs is Mission Critical to Hong Kong’s Future.
It is harder to put it more bluntly. Slash the costs of trucking a box across the border or Hong Kong will continue to lose market share to Shenzhen. That was the message.
So what happened? Nothing. A paralysed government basically ignored the report, a report that explained exactly how the competitiveness of the port was being undermined, putting 110,000 jobs under threat, and what to do about it.
Back in those days, Hong Kong was the world’s second busiest container port behind Singapore. Both positions, of course, were always questionable because the ports counted transshipment containers twice – once off a ship and once on to another. But that's just the way the system works.
Fast-forward to 2012 and Hong Kong is about to lose its number three position to Shenzhen. So what does the visionary Transport and Housing Bureau have in mind to boost the competitiveness of Hong Kong port?
Uh … the Hong Kong Port Masterplan 2030.
I kid you not. After failing to implement any recommendations from the impressive 2020 GHK study, the government wants to compile another one.
The port of Hong Kong handles more than 20 million boxes a year so it was never going to disappear overnight, but surely even the myopic incumbents responsible for transport (and housing) can see that the demise of Hong Kong port is already well under way.