Can Hong Kong Port Remain her Competitiveness?

Introduction• was once the pride of Hong Kong people • Hong Kong attracts the flow of cargo with

its free port status, • efficient and transparent customs

procedures, • high frequency of sailings, • multimodal transport system,

This report is find out the influences that affected Hong Kong container throughput in the past

explore reasons and give advices predict whether Hong Kong container terminals as

whole remain the competitiveness

Hong Kong container terminals

Methodology

• Case study – Singapore

• Literature Review

• Authorities Documents (Internet)

• Combination

• Data analysis

• Updated source

Source : Data collected from various data sources

Source : Data collected from various data sources

Recent Trends Source : Summary Statistics on Port Traffic of Hong Kong

Source : Summary Statistics on Port Traffic of Hong Kong

Reasons for the decline of container throughput of Hong Kong

1. Economic transformation

2. New terminals construction of “ YanTian” and “SheKou’

3. Port Competitiveness - High total through cost

1. Economic transformation

• Since the fast pace of development of the 1970s, • financial, trade and services industries have been

catching up. • The financial economy success also means that

the decline of the import and export trade of Hong Kong,

• the government pays less attention and invested less in this sector.

Hong Kong Port - Kwai Tsing Container Terminals

These terminals are operated by five companies, namely:• Modern Terminals Ltd. (MTL)• Hongkong International Terminals Ltd. (HIT)• COSCO Information & Technology (H.K.) Ltd. (COSCO)• Dubai Port International Terminals Ltd. (DPI)• Asia Container Terminals Ltd. (ACT)

• with limited destinations and low service frequency• But Shenzhen competed at the lower end offering the

lowest port charges in the region • Yantian Port has the highest charges on the Mainland• But offered a more competitive turnaround time and

better global network integration.

2. Challenge - Port of Shekou and Yantian , Shenzhen

3. Port Competitiveness - High Total Through Costs • High road haulage tariffs • High Terminal Handling Charges (THCs).

• it costs US$280 more per FEU for East PRD cargo moved inland by road via HKP to US West

• However, barging via the West Shenzhen ports of Shekou and Chiwan still offers a US$160 cost advantage versus HKP, the reason is that Hong Kong’s THC is about US$100 more expensive.

FEU: Forty-foot equivalent unit (a 40 foot ISO container).

Case Study – Port of Singapore

• Currently the world's second-busiest port in terms of total shipping tonnage• it also transships a fifth of the world's shipping containers• half of the world's annual supply of crude oil• and is the world's busiest transshipment port.

Port of Hong Kong

Port of Singapore

Port comparison

• As a trading port for ships plying their trade between Europe and East Asia.

• “With the competition and technology that came with containerization and building of faster ships with a more economical use of fuel oil, shipping lines are using larger ships over greater distances”.

Case Study – Port of Singapore

City Government Policy Support

Hong Kong RTE, DTA, CDTA

Singapore CDTA, LT, EIA

China FTZ, VAT, SEZ

Double tax agreement countries covered:

Hong Kong – 51Singapore – 74China – 96

Source: Data collect from state administration of taxation (2014)

Government Support - Taxation

Other factors – Labour Strikes

Source : Analyzed by Lam and Zhang, 2011

Conclusion

• Shenzhen’s market share of cargo in the region will be drastically increase

• Shenzhen has been predicted to become the world’s largest container

port

• Hong Kong port lost her competitiveness unless transformation of

maritime cluster

• Regards to well-integrated finance, legal and other service sectors

• Framework Agreement on Hong Kong/Guangdong Cooperation which may

help the development between Mainland China and Shenzhen port

Recommendation• HKG provides additional land for containers and related uses

• Port expansion, future container terminal

• Strengthen collaboration PRD (e.g. CEPA)

• HKG vigorously promote HK as the largest Port-service centre in Asia:

e.g. provide more incentives to SMEs ;

build a maritime service centre ;

provide more tax concession for owner to boost the maritime

cluster

Limitation

• Shortage of study time

• Technical support

• Data collection

• Lack of Diversification

• Experience

• Resource

Q & A