16/Sep/2015 by Thomas Cullen.
And these numbers are not simply a reflection of the slow-down of the Chinese economy. Last year volumes in TEU fell by 0.6%, 2013 saw a fall of 3.3% and 2012 – when the mainland Chinese economy was growing in double digits- saw a fall of 5.2%.
The problem is that Hong Kong has lost its competitiveness against the mainland Chinese ports. Although these are no longer seeing the explosive growth they once did, with Yantian Port seeing a TEU volume growth of 6.84% in the first half of the year, at least they are still growing, even if the Yantian Port Company’s profits are under pressure.
The problem is that it is simply more expensive for exporters in Shenzhen to transport their cargoes to Hong Kong, than to the nearest mainland port. Worse is the growing threat to trans-shipment as the number of direct calls to mainland ports grow. Hong Kong has relied on trans-shipment traffic from across Southern China and South East Asia for around a decade but this is beginning to shrink.
Whereas Hong Kong has been able to retain a healthy trade in air freight despite similar threats from air hubs in mainland China such as Shanghai, it appears to have a broken business model in sea freight. If Hong Kong port cannot fix its problems the implications for the wider economy in Hong Kong would are significant, after all the city-state was founded on the capabilities of its port.