About HKTDC | Media Room | Contact HKTDC | Wish List Wish List () | My HKTDC |
Save As PDF Print this page

Exporting Excellence(HKTDC Enterprise, Vol 03,2008)




An efficient container port and logistics strengths will be crucial components of Hong Kong's growth as an Asian transhipment hub

It may no longer be the world's busiest, but industry experts, shippers and buyers alike agree that Hong Kong's container port remains one of the most effective.

According to Modern Terminals Ltd (MTL) Chief Executive Sean Kelly, the volumes of barge and transhipment cargo being handled in Hong Kong and southern China are growing at a healthy pace.

Barge throughput at the Kwai Chung container terminal has increased by an average of 15.6% a year since 2000, while transhipment cargoes have risen by an annual 15%.

"The equivalent figures for all of the south China ports were nearly 20% and 16.7% respectively," he says. "These segments will undoubtedly remain the key driving forces behind our future growth, and we must nurture them carefully."

However, Hong Kong terminal operators find it harder to tap into the potential of the region's most important cargo segment, the trucked exports from the neighbouring Pearl River Delta (PRD), because of the inefficiencies of cross-boundary trucking arrangements.

"These make it expensive to move cargo to Hong Kong by road from the eastern PRD, which has resulted in a declining volume in this sector," Mr Kelly says.

"Hong Kong can grow with the market in the future, if cross-boundary trucking inefficiencies can be resolved, because of our competitive advantages as a hub port, a free port and a business-friendly port that provides value for money."

Mr Kelly adds that he is looking forward to the deregulation of the cross-boundary trucking business that will open the network and level the playing field, facilitating the flow of cargo into Hong Kong via various customs checkpoints.

Hongkong Int'l Terminals (HIT) Managing Director Eric Ip says Hong Kong port operators have been vigorously competing for transhipment cargoes from other Asian origins, including northern China, in order to make up for the loss of trucked cargo from the Guangdong Province hinterland to Shenzhen ports.

"Supported by the shipping lines, the transhipment volume at Kwai Chung has increased by almost 50% over the past three years," Mr Ip says, noting that Hong Kong's favourable position as a natural deep-water port located on major international shipping routes helps it capture international transhipment cargoe. "It is a free port, which ranks highly in the region for customs efficiency."

In view of the continuous deployment of mega vessels and rising bunker fuel costs, global shipping lines need to expedite turnaround times and minimise operating costs.

"With our port's strategic location, smooth customs process and cost-effective terminal operations, it will continue to be a preferred transhipment hub in Asia and gateway of southern China," Mr Ip maintains.

Hong Kong Shippers' Council Executive Director Sunny Ho adds that Hong Kong has a "very distinct advantage" as it is a free port with no licensing requirements for importers and exporters, and no import taxes, duties or quotas.

"This is in sharp contrast with the very complicated system on the Chinese mainland," says Mr Ho, adding that Hong Kong's port will continue to handle the bulk of PRD-bound cargoes.

He notes new trade restrictions this year will replace the old textile quota system, as a result of which a substantial portion of the mainland's textiles and garment shipments will continue to be exported through Hong Kong.

"Many advanced logistics services cannot be performed in Hong Kong because of the complicated customs and trade systems on the mainland, but the city will remain a major consolidation and logistics centre for southern China," Mr Ho says.

He also dismisses suggestions that Guangzhou's New Baiyun International Airport, which opened in August 2004, poses a serious threat to Hong Kong International Airport (HKIA).

HKIA, consistently ranked the busiest airport for international air cargo since 1996, handled 3.58 million tonnes of freight in 2006, while Baiyun managed only 653,000 tonnes.

Although air cargo made up just 1.3% of Hong Kong's total cargo throughput in 2006, it accounted for 34.5% of its total external trade value at US$224bn, which was up 11% over the 2005 figure.

"Baiyun is an up-and-coming facility, but its cargo traffic growth rate is still in the single digits and it is many years away from posing any serious threat to HKIA," a Hong Kong-based aviation analyst observes.

He adds that Guangdong Airport Management Corp General Manager Liu Zijing expects Baiyun airport to handle two million tonnes by 2010, and four million tonnes by 2020. "By that time throughput at HKIA will have crossed the six-million-tonne mark," the analyst says.

The latest Business Monitor International report says airfreight capacity in Hong Kong will grow as a result of the expansion of the passenger business, driven by the proliferation of low-cost airlines.

Although the number of dedicated freighters deployed by international airlines is increasing, about 60% of the cargo is still carried in the bellies of passenger aircraft, the report adds.