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Friday, June 18, 2021

Maritime Logistics Professional

Hong Kong port strike lumbers on and on

Posted to Far East Maritime (by on April 23, 2013

The strike of contracted workers serving Hutchison-owned Hongkong International Terminals is moving into its fourth week with little chance it will be resolved soon.

One of the contractors, Global Stevedoring Service Co, said on Friday that it planned to close down when its contract with HIT expires on June 30 and fire all its staff.

In a statement issued by Global Stevedoring, it advised “all parties” to consider the competition from other regional ports and “understand the challenges” the industry is facing or the city’s logistics industry will suffer.

Wise words indeed. Hong Kong’s port is already well into a decline that will continue until the land is finally converted into luxury waterfront property (by HIT owner and tycoon Li Ka-shing, of course). There is nothing the port operators (there are really only two now – HIT and Modern Terminals) can do to stop the decline. All they can do is make as much profit as possible before the slide forces the need for a change of address. Increasing port charges will further erode the port’s competitiveness and increasing the payroll won’t help either.

But the worker protest has been hijacked by pro-Beijing and pro-democracy affiliated unions with local political parties jumping on their soapboxes. As we all know, when politics enters a room, fair and impartial walk out.

The unions believe their workers are so skilled that even if Global Stevedoring shuts down they will easily find employment with whoever gets the port contract.

There is a feeling that Global is playing games and trying to force the unions to settle the dispute and get back to work. If so, it risks painting itself into a corner because the unions are sticking to their demand for a 20 percent pay rise.

On the other hand, perhaps Global’s business model is based on paying low wages and a 20 percent hike in salaries really will make it unworkable.

Some of the banks have been calculating HIT’s losses from the strike and Citigroup puts them at US$12.9 million. That is really chump change in the greater scheme of things.

The real damage will be in the acceleration of a trend that began years ago. South China shippers began using ports closer to their production areas to ship out direct exports, which is why Shenzhen saw such rapidly rising throughput in the mid 2000s.

With a large chunk of manufacturing now moving west, and China’s declining focus on exports, all Pearl River Delta ports are suffering from falling volumes.