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Hutch port boss weighs into docker strike

Posted to Far East Maritime (by on April 30, 2013

Agenda-driven unions are working hard to ignite public support for the striking Hong Kong container handlers, but no one really seems to care.

Hutchison Port Holdings is not accustomed to being in the public eye. As the world’s number one container port operator, HPH has been happy conducting its business quietly and under the media radar.

In the past, attempts to elicit comment on various issues of the day were traditionally met by the response, “we don’t comment on operational or commercial activities” by the local spokesman.

However, the dockworkers strike at HPH’s Hongkong International Terminals has forced the company into the unflattering glare of the media spotlight.

For more than a month the strike has dragged on, gleefully chronicled on the front pages of the city’s English and more vigorous Chinese press. With a pro-Beijing and a pro-democrat union involved, politics quickly took over from dockworker demands for an obviously unattainable 20 percent salary hike.

Strikers are now camped outside Hutchison Whampoa boss Li Ka-shing’s headquarters in Central and protesters have been milling around outside his house and at Hutch retail stores about town.

The public nature of the strike has forced usually taciturn HPH to adopt a more public stance. It came in the form of full-page statements that have carried in the local press over the past couple of weeks, with the font considerately enlarged for the convenience of the reading public.

But yesterday saw the rare appearance of an old media “friend” on the Op-Ed page of the South China Morning Post. The long-serving Hutchison Port Holdings group managing director John Meredith weighed in with his take on the strike, castigating the “dangerous and deceptive” actions of Hong Kong’s Confederation of Trade Unions.

Meredith can be an irascible fellow at the best of times, but the unions and the striking workers have obviously poked him with a stick. He accused the union boss of a “Cultural Revolution” style attack on Li and political grandstanding instead of serving worker interests.

Meredith warned of a more serious problem, one that we have highlighted in previous blogs on the subject. Transhipment cargo does not have to go via the port of Hong Kong and if shipping lines decide it would be a lot less hassle to send and collect cargo elsewhere, goodbye Hong Kong.

Meredith said transhipment containers account for 70 percent of Hong Kong port business, which is the first time we have heard such an amazingly high percentage used and it means the port is in more trouble than everyone thinks. Direct exports from South China have been declining steadily since comprising more than 60 percent of HK throughput in the early 2000s, but it seems the port is almost at a Singapore-style transshipment-dominated status.

That may be good for Singapore in its strategic geographic location, but transshipping through Hong Kong makes sense in transpacific trade that originates in Vietnam, the Philippines and maybe Thailand. The majority of North Europe and Med containers from China will not go via Hong Kong. And remember that transshipment boxes bring to a port 30 percent of the economic value of direct exports, so competing for transshipment cargo is like magazines trying to boost online advertising at the expense of print ads – the accelleration of an inevitable decline.

Meredith is correct in warning the strikers and unions that they are risking Hong Kong’s competitiveness, but this was happening long before workers designed posters of tycoon Li with bloody fangs and marched around chanting ridiculous slogans like "Li Ka-shing igores the lives and deaths of others".

The truth is, no matter what the strikers or Hong Kong’s container port operators do, containerised cargo will continue to go elsewhere. 

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