Mainland ports will see a significant drop in cargo volume this year, the first decline in 20 years, with those in the Yangtze and Pearl River Delta regions to be hit especially hard, China Merchants Holdings (International) chairman Fu Yuning said. 'We are going through an unprecedented crisis,' Mr Fu said. 'The outlook for international container trade is still unstable, while the availability of credit has yet to return to normal.' China Merchants yesterday reported net profit rose 4.5 per cent last year, but Mr Fu expected a single-digit fall in shipping volume at the ports this year. 'The decline at the Pearl and Yangtze River ports will be larger than the national average because they are more sensitive to global trade,' he said in Hong Kong. China Merchants, which invests in these two regions, would see a bigger hit, he said. In the first quarter, mainland ports handled 15 per cent fewer containers on average because of weakening global trade, while China Merchants recorded an 18 per cent drop. The company, which invests in ports in Shenzhen, Shanghai, Ningbo and Zhanjiang, said net profit rose to HK$3.71 billion last year from HK$3.55 billion a year earlier. The board recommended a final dividend of 40 HK cents per share, against 45 HK cents in 2007. Throughput at China Merchants' mainland ports rose 8.6 per cent to 43.58 million 20-foot equivalent units (teu), while at Hong Kong Modern Terminals, in which the company has a 27 per cent stake, it dropped 1.5 per cent to 6.9 million teu. China Merchants would also see a drop in unit revenue as the proportion of low-value boxes increased, said Geoffrey Cheng, a transport analyst at Daiwa Institute of Research. 'The percentage of empty boxes in Shenzhen rose to 45.5 per cent in February from 36.6 per cent a year earlier,' Mr Cheng said. The handling fee for empty boxes is less than half that of a full box. In the five years to 2007, the mean proportion of empty boxes in China was 36 per cent. The ratio fell to 33 per cent in the first half of last year as the country's import volume increased. 'What is happening now in the empty boxes show a regression from the mean,' Mr Cheng said. However, a China Merchants executive said: 'Empty boxes could turn into laden boxes when the export trade resumes in China. That's why operators are chasing after these low-value boxes in the face of the downturn in the economy.' About 150,000 teu of empty boxes are in the west Shenzhen depot and 300,000 teu in east Shenzhen. In Shanghai, there were 700,000 teu of empty boxes, Mr Cheng said. China Merchants' capital expenditure will drop to HK$2.2 billion this year from HK$3.8 billion, as it limits investments. A HK$400 million investment in a Vietnam port project will be subject to the approval of the local government.