Hong Kong International Terminals Ltd, the city’s biggest container-terminal operator and part of Li’s CK Hutchison Holdings Ltd, is experiencing a decrease at its rankings. Consequently, it is freezing salaries for all its staff this year due to rising competition and the U.S.-China trade war. It has also formed an alliance with rival dock operators in Hong Kong in a bid to cut costs.
Specifically, Drewry reported that Hong Kong was amongst the top five busiest container ports since 1979 worldwide. Yet, the city fell two notches to seventh place in 2018, as Guangzhou and South Korea’s Busan surpassed its ranking, according to Bloomberg.
Hong Kong’s container terminals are operated by private companies that have no government links, such as Hongkong International Terminals as well as Modern Terminals.
China’s Qingdao could be next to surpass it this year.
Moreover, Hong Kong container terminal was the busiest container port in the world, in 2004, filled with more than 150.000 vessels.
Additionally, the number is almost cut in half, today, and container traffic at the port has decreased since April by 5.4%, according to the Hong Kong Maritime and Port Board data.
In comparison, Shanghai has experienced an increase by 4.4%, whereas Busan by 5.8% in 2018 and a 7.1% rise for Guangzhou in the first 11 months.
Were Chinese companies to move their production to other countries that are closer to rival ports as Singapore or Port of Tanjung Pelepas in Malaysia, Hong Kong’s decrease would accelerate.
Hong Kong International terminals stated that
In 2018, the port industry in Hong Kong experienced an increasing number of challenges … Market uncertainties still cast a shadow over the coming year.
Moreover, the terminals agreed to form alliance with Modern Terminal Ltd and two other operators to jointly manage and operate 23 berths at the main Kwai Tsing terminals.
Although Hong Kong faced a decline, Singapore managed to keep away and now handles up to 50% of containers, while South Korea’s Busan increased its volume over 80%.
In addition, Singapore added more berths to operate terminals with China’s Cosco Shipping Holdings Co. and Ocean Express Network to bring in business. Also, Busan plans to cut port fees and provide funds for shipping lines tat bring more cargo.
Rahul Kapoor, an analyst at Bloomberg Intelligence in Singapore reported
New terminals require huge capital expenditure … Given the market saturation and more competition, it doesn’t seem economically effective to invest in a new terminal.
On the contrary, Hong Kong focused on financial services. Finance and insurance accounted for 19% of the country’s gross domestic product in 2017 and property 11%, while transportation was 6%.
