Cut-price mainland ports pressure 'expensive terminals'

Handling tariffs at Hong Kong terminals are forecast to fall 2.5 per cent a year as competition mounts from mainland ports.

A Deutsche Bank Research study said international comparisons showed that Hong Kong was among the most expensive terminals in the world while mainland ports generally charged below-average tariffs.

'We forecast Hong Kong's handling tariffs will fall by 2.5 per cent each year, while China's tariffs should trend towards US$110 per teu [20 ft equivalent unit], which is comparable to other Asian operators,' it said, adding that Hong Kong's premium over the mainland's would be based solely on the quality of its service.

The study, which was completed in June, said it anticipated a 1 to 3 per cent annual container growth for ocean and river trade in Hong Kong through to 2006, based on indications that growth rates had slowed to a much greater extent than was forecast by the Hong Kong Port and Maritime Board.

Mainland container throughput continued to grow significantly despite falling exports and imports.

The main reasons for the slowdown of exports and imports included the pricing of export goods and continued robust export demand for containerised goods.

According to the bank's analysis, these factors supported its views that mainland containerisation of goods was increasing while cargo diversion from Hong Kong port was also helping mainland ports increase throughput.