Demand rises, but mainland needs to improve operation

PUBLISHED : Wednesday, 23 August, 2000, 12:00am
UPDATED : Wednesday, 23 August, 2000, 12:00am

NYK Line's Hong Kong operations recorded a 15 per cent increase in container volume handled in the first half of this year because of strong demand from the United States and Europe.

NYK (HK) chairman Koichi Aoki said the carrier handled about 240,000 teu (20 ft equivalent units) in Hong Kong and about 50,000 teu in the southern mainland annually.

'To cope with peak season demand, we intentionally reduce our transport of metal scrap and agriculture products to Asia because the consignees sometimes keep the containers for a long time. We also face difficulties in collecting charges,' Mr Aoki said.

As a result, the carrier prefers to bring back empty containers to carry more lucrative cargo from Asia to the US or Europe.

Mr Aoki said the peak season for this year started in July and if the US maintained its purchasing until its presidential elections at the end of this year the tonnage handled by NYK would increase tremendously.

Mr Aoki said the government could do more to promote Hong Kong as a premier shipping hub, especially for shipping lines, if it could convince the mainland to offer the same treatment to Hong Kong-registered ships as those registered on the mainland.

Although the government had done much to improve the Hong Kong shipping register, NYK Line had not registered its vessels in the SAR as it would not gain much.

Mr Aoki said the mainland's Ministry of Communications had approved the establishment of NYK Logistics in Shanghai to carry out logistics activities. NYK leased warehouses when its customers needed them and provided supply chain management services. Customers included those who imported service parts from Japan and other Asian countries, and those who exported to the US and Europe.

Unlike Mitsui OSK Line, which has its regional headquarters in Hong Kong, NYK has its regional headquarters in Singapore, handling administrative work, while its Hong Kong office handles sales. Although it is expensive to do business in Hong Kong, the SAR is an important base for NYK's container liner business, according to Mr Aoki.

He said the mainland customs department was still a major problem for shipping companies. It was ironic that firms could transship cargo to Hong Kong more easily than to Shekou port because of administrative red tape on the mainland.

Clearing boxes at Yantian can take up to three days but is much faster at Shekou, taking only one day. While customs officers can open and inspect the content of boxes that come to the terminal they do not re-pack them, causing delays. 'That is why many shipping firms want their boxes to go through Hong Kong,' Mr Aoki said.

NYK's ships called at Yantian and Shekou ports and, as long as the cargo existed, the shipping line was happy, he said.

Freight rates had risen this year but at lower levels compared with increases imposed last year. The carrier had imposed strict cost controls and improved its efficiency and productivity to remain competitive, he said.

The carrier could not survive if its rates were higher than those of its competitors, Mr Aoki said.

NYK (HK) had also enhanced its services by being ISO 9002-certified by Lloyd's Register this year.