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Monday, October 22, 2018

Maritime Logistics Professional

Laissez faire or just plain blasé

Posted to Far East Maritime (by on April 20, 2012

When it comes to maritime hubs, Hong Kong has fallen well behind Singapore.

Hong Kong and Singapore have developed into fierce rivals over the last two decades. During that time, both iconic cities have become transportation hubs, Hong Kong as a gateway to China and Singapore as the transshipment point between East and West.

But there is a crucial difference in how the two cities have developed. Hong Kong adopted the hands off, laissez faire approach while in Singapore the government was, and remains, very much hands on.

Fans of the free market applaud the Hong Kong approach, but those of us who live here know that the government keeps its hands off because it is terrified of upsetting one group or another rather than being dedicated to small government-big business.

For instance  – my favourite example – the trucking of containers from the factories in Dongguan to the port. Because of the delays when bringing a container across the border from Shenzhen into Hong Kong, drivers can only complete one trip a day. That is not very productive and hikes the cost per container that would be lower if the driver could do two trips a day. The Hong Kong government has been working on speeding up the process for almost a decade and is no closer to a solution.

And mainland drivers are not permitted to drive in Hong Kong either, so they must drop off boxes at the border to be taken into the territory. That adds time, which adds money. But the functional constituency for transport would have a cadenza if mainland truckers were allowed in, no matter how much more efficient and cheaper it would make shipping a container from Hong Kong viz a viz Shenzhen.

So the percentage of direct exports from Hong Kong continues to fall.

Another place where the government could stick its oar in but doesn’t is terminal handling charges (a misnomer in that they are the charges levied on shippers by shipping lines). THCs are at least 20 percent higher than in Shenzhen, adding to the cost per box.

So even when the very survival of the container port is threatened, one of the four “pillars” of Hong Kong, the government still cannot bring itself to actually do something useful.

Contrast the decline of Hong Kong with the ascent of Singapore. Okay, so the Maritime and Port Authority of Singapore is obsessed with the city-state becoming an “international maritime centre”. How that differs from what the place already is, is anyone’s guess.

But the point is that the state-owned port authority markets itself like nobody’s business. It is out there offering tax breaks to companies to set up shop in the city, building and upgrading facilities, sponsoring technology development, hosting forums and organizing its Maritime Week.

The week-long event begins on Monday and brings in the IMO, Bimco, Intertanko and a host of other abbreviated organisations together.

But perhaps the clearest indication of the importance of the transportation sector to the Singapore economy is that the country actually has a Ministry of Transport. The ministry’s primary function is to develop policies that improve the competitiveness of Singapore.

Up in Hong Kong, however, transport is lumped in with housing, and when it comes to transportation matters, the goal of the Transport and Housing Bureau is more about pushing pointless infrastructure projects to satisfy grasping vested interests than focusing on the waning competitiveness of the port.

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