[180614.EN.SEA] Drewry: Expensive Hong Kong Loses More Boxes To Cheaper Shenzhen

HONG KONG stands out among the top 10 Asian container ports for losing box volume to rivals, says Drewry's Maritime Research, reports Lloyd's List.

"Hong Kong faces strong competition from Shenzhen, which is lower cost," said Drewry senior analyst Neil Davidson.

"Hong Kong has always been a port with extremely expensive land and an extremely high quality, high-cost port to use. Shenzhen has lower land and labour costs, therefore lower tariffs," he said.

"But it is also the migration of manufacturing from south China to north China - because labour in the south is becoming expensive compared to the north, so manufacturing is moving north and Bohai ports are benefiting.

Half the world's container traffic goes through Asian ports and Mr Davidson expects that will grow to two-thirds by 2020.

"Increasingly Asia is becoming the centre of the critical mass of container trade. Already 30 per cent of world container trade is handled in Chinese ports and that is going up," he said.

"Shanghai will maintain its dominant position. It is going to add capacity in large lumps. The sheer scale of ports like Shanghai and Singapore make you stop and think," Mr Davidson said.

"Hong Kong faces similar challenges to ports in other regions of the world - bigger ships, bigger alliances. How do you accommodate the needs of the alliances when you have fragmented capacity?

"A huge amount of boxes have to be trucked between terminals - the port would benefit from consolidation of terminal ownership, more contiguous quay lines and not having alliances to call at more than one terminal, or having inter-terminal transfers," he said.

Source : HKSG.