Opinion | Resources must be better used to revive fortunes of Hong Kong’s container port
- The world’s busiest only 15 years ago, the city’s facility has just dropped out of the top five to seventh position behind Asian rivals, and the setting up of a new group by operators now aims to improve productivity
Having lost its world No 1 ranking after 2004 to Singapore, Hong Kong port’s competitiveness has been eroded by intense rivalry especially from southern China. The evolution of the bay area port cluster is shaping as a growing threat to our port’s role as a hub and gateway to the world. Two numbers reflect this. Last year, Hong Kong handled 5 per cent fewer containers than in the previous year and less than half the number handled by Shanghai,
Problems date back at least to when the port lost its No 1 position. While port operators have been deft in managing them for so long, change in the industry has gathered momentum. The shipping market has gained scale and ships have grown in size, driven by mergers and acquisitions and the rationalisation of operations into three main alliances. The result is more complex demands, such as handling containers for several shipping lines on the one ship, and providing space for larger vessels and volumes of containers.
Jonathan Beard, Asian head of transport and logistics for consultancy Arcadis, has argued that to compete with centrally coordinated rivals with single operating systems, port operators need to coordinate more and add scale with operational restructuring. At the same time, the bay area provides an opportunity to enhance Hong Kong’s maritime status through support for development of high-end services to regional enterprises, such as ship management and leasing, finance, and insurance as well as maritime law.
Terminal operators and other stakeholders should focus on removing operational inefficiencies. In this respect, Hutchison Port Holdings Trust and Wharf Modern Terminals last month revealed a plan to compete with rivals by setting up a group that will take up 95 per cent market share at the Kwai Tsing port. Hopefully it will enhance competitiveness without running foul of the Competition Commission. With its strategic location, natural deep-water harbour and financial and logistics services, Hong Kong should not concede too readily. It is a question of making better use of resources. After all, competition from Malaysia spurred Singapore to drive productivity reforms that have secured its place among the global top five ports.