Shenzhen port chiefs bid to lure container shipping lines from Hong Kong

Port chiefs advise big foreign carriers to skip Hong Kong, threatening transshipment trade

PUBLISHED : Monday, 25 November, 2013, 3:52am
UPDATED : Monday, 25 November, 2013, 3:52am

Port authorities in Shenzhen are working aggressively to persuade foreign carriers to skip Hong Kong as a transit hub and do business directly with them, the Post has learned.

Shenzhen is well-placed to overtake Hong Kong as the world's third busiest container port this year. The city could replace Hong Kong as the region's primary transshipment hub for goods, port operators warned.

Last year about 60 per cent of Hong Kong's container throughput came from transshipments. Half of it was due to regulation on the mainland that bans foreign shipping companies from directly sending cargo from one mainland port to another. This regulation is designed to protect the monopoly of domestic shipping lines on the near-sea trade.

However, a document seen by the Post showed that a Shenzhen customs office has been advising an international shipping line how to use a paperwork loophole to skip Hong Kong and go directly to Shenzhen. It said the foreign shippers could simply name Hong Kong as the port of origin in the manifest they submit to Shenzhen customs without actually loading any goods there.

The Post found that at least two Shenzhen ports and two major international carriers have diverted hundreds of thousands of boxes a month away from Kwai Chung Container Terminals.

One port operator in Shenzhen, requesting anonymity, said other ports and shipping lines feared they might lose out if they did not adopt the same practice.

Alan Lee Yiu-kwong, chairman of the Hong Kong Container Terminal Operators Association, said they had raised the issue with the Transport and Housing Bureau, urging an investigation.

"Transshipment is the last fort of Hong Kong's port business and if we lost that it will mark the end of our port," Lee said.

Hong Kong handled 18.3 million 20-foot containers (teu) in the first 10 months this year - a drop of 5.4 per cent from a year ago. That compared with 19.31 million teu by Shenzhen, a slight rise of 0.53 per cent.

Several mainland cities including Guangzhou were already lobbying Beijing to further open up the coastal sea trade following the setting up of a free-trade zone in Shanghai eight weeks ago.

Authorities have relaxed the ban on foreign-flagged ships owned by mainland companies conducting domestic trade, and Shanghai's maritime and port regulators were fighting to extend the relaxation to cover foreign-owned vessels.