Kwai Tsing port still important

PUBLISHED : Wednesday, 09 October, 2013, 12:00am
UPDATED : Wednesday, 09 October, 2013, 2:50am

There have been suggestions that Kwai Tsing Container Terminals is no longer needed. Some even suggest it would be better suited as a location for housing.

This might alleviate the city's housing shortage, but how would this affect Hong Kong's logistics industry which employs some 200,000 people?

The phenomenal growth of southern Chinese ports has led some to say that the Kwai Tsing port operation is a sunset industry. But the success of mainland ports does not preclude the success of our own. As well as retaining a sizable trucked import and export throughput, Hong Kong is well-positioned to handle international trans-shipment cargoes destined for the East and West as well as intra-Asia. Hong Kong port consolidates these cargoes for onward shipment to final destinations.

Rather than being in direct competition, Hong Kong and other Guangdong ports have a complementary relationship, in large part due to China's cabotage laws.

Much like the Jones Act in the US, cabotage laws in China prohibit foreign flagged vessels moving cargoes from one mainland coastal port to another.

Under the principle of "one country, two systems", Hong Kong has a unique advantage as these cargoes, originating from a port in the mainland, are allowed to be carried by a foreign flagged vessel to Hong Kong to be trans-shipped to a hub port in China for export.

For this purpose only, Hong Kong is permitted to be considered as a "foreign port" and not subject to China's national cabotage rules. The same allowance is made for containers imported to the mainland through Hong Kong port.

Out of the 24 million 20-foot containers moved through Hong Kong port last year, 60 per cent were classified as trans-shipment throughput. Of that, a little over half was intra-Asia, including cabotage cargoes which are handled in mainland ports.

As long as China does not give up this sovereignty right and maintains the cabotage rules in order to protect the Chinese shipping line fleet, then Hong Kong will continue its successful operations handling both southern China import and export cargo as well as Asian trans-shipments.

We are working hard to rationalise yard and berth facilities to ensure the port remains a reliable and efficient entrepôt.

The city has many advantages: free port status; operational flexibility; 400 weekly vessel calls with links to 500 port destinations. Perhaps it is a bit too soon to write off Kwai Tsing port .

Gerry Yim, managing director, Hongkong International Terminals