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Thursday, September 19, 2019

Maritime Logistics Professional

No point in trying to prolong Hong Kong’s maritime hub position

Posted to Far East Maritime (by on November 30, 2010

Hong Kong’s halcyon maritime days are over, usurped by mainland ports that can offer the same efficiency at a cheaper price and with easier access.

Earlier this week a coalition of maritime industry groups called for the government to establish a policy bureau to strengthen Hong Kong's position as an international maritime centre.

The alliance, comprising the Hong Kong Shipowners' Association, Hong Kong Seamen's Union, the Institute of Seatransport and the Hong Kong Logistics Management Staff Association, said the government needed to do something to stave off competition from Singapore and Shanghai.

Hong Kong was in danger of losing its international maritime status, they warned, and was lying fourth in the busiest ports in the world list.

"This ranking may drop even further. The issue of finding ways of maintaining and upgrading the status of Hong Kong as an international maritime centre is of the utmost urgency," a paper by the alliance said.

The way to go about improving Hong Kong’s maritime status, according to the four groups, involves asking for government intervention in developing maritime-related services such as shipbroking, chartering, ship finance, arbitration and legal services rather than trying to boost cargo and container throughput.

This is an interesting development. Way back in 2004, the government released its Study on Hong Kong Port – Masterplan 2020. In that report, it was found that the reason Hong Kong’s market share of south China exports was falling was because of the added costs involved in trucking boxes to the port.

So important was containerised cargo – especially the direct export variety from south China factories – that the report concluded it was “mission critical” for the very survival of the port that the cost of trucking containers from the Pearl River Delta factories to Hong Kong be reduced.

Six years later and we now hear from the industry that boosting container throughput is a waste of time.

What an incredible turn around – from mission critical to waste of time in just six years. But however startling that may be, it is in fact a welcome return to reality. Because it is indeed a waste of time trying to attract more containers to Hong Kong, and it always will be as long as it costs more to export a box from the port viz-a-viz Shenzhen just over the fence.

Shippers of lower-in-value ocean freight make their export port decisions based on cost, and Hong Kong is a good third more expensive per box than Shenzhen. This is because of factors like cross border delays keeping truck trips down to one a day, it is because of the high cost of cross border trucking licenses and the fact that mainland drivers are not permitted to drive in Hong Kong.

Hong Kong’s government has made inaction into an art form and it would rather do nothing than take on the many vested interests embedded in the transport industry. Someone in the Transport and Housing Bureau once told me that even though it would be a great cost-saver, it would be “political suicide” for a legislator to recommend mainland truckers be allowed to drive their containers into Hong Kong and deliver them to Kwai Chung container port. The functional constituency for transport would have an embolism.

The laissez faire principle so embraced by Hong Kong's rulers really means not tampering with vested interests that rig the market. So to look to the government for assistance in developing maritime services is worth a good few hyucks.

Perhaps the services can be developed to some degree, but Hong Kong will never again be the busy port it once was. Sometimes the world just moves on.

Tags: shipping imports statistics Zepol

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