Hong Kong port is losing ground as exporters shift to mainland China

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Hong Kong has been subjected to a rapid decline in the volumes of goods transported by sea, as it is losing out to its competitors in mainland China and Southeast Asia.

Container production in Hong Kong fell by 14 percent last year to 14.3 million twenty-foot equivalent units, according to figures from maritime consultancy Drury.

This was the largest percentage decline among the world's largest ports last year. Drury figures show Hong Kong is now the world's tenth largest port by volume, closely followed by Port Klang in Malaysia, where volumes rose by 6.4 per cent last year.

Hong Kong's deep-water port located in the heart of the Pearl River Delta has long made it a sought-after trade gateway to the Greater China region. Volumes at the port, once the world's busiest, according to Hong Kong government data, have declined as the city's manufacturers shift to mainland China and competition from other Chinese ports increases, analysts said.

Shipping companies have come to view facilities in mainland China as a more attractive option than Hong Kong, as goods manufactured in the delta region need to be transshipped by barges, small container ships or roads.

“It is always inevitable that Hong Kong will shrink as a port,” said Tim Huxley, president of Hong Kong-based marine investment firm Mandarin Shipping.

“Manufacturing has moved elsewhere. Meanwhile… [Hong Kong’s port] “It's still a big employer, and it's no longer the gateway to southern China as there are other ports in the Greater Bay Area that serve manufacturers there,” Huxley said, referring to the area around the Pearl River Delta.

Analysts say that Maersk and Hapag-Lloyd's agreement this year to transport goods to the port of Yantian in Shenzhen instead of Hong Kong confirms this trend. “The ports of Shenzhen and Guangzhou have invested in deepwater terminal facilities which has facilitated increased mainline calls, in other words bypassing Hong Kong,” said Eleanor Hadland, senior port and terminal analyst at Drury.

Hadland added that the decline in Hong Kong's throughput last year was due to factors including “improved capacity and capability of terminals in Guangzhou and Shenzhen,” which allow carriers to bypass the region.

Hutchison Ports Holdings Trust, the region's main port operator, said in its February earnings report that there had been a “structural change” in shippers' preferences “for direct shipping in China rather than ship-to-ship transhipment” via Hong Kong. Kong.

“Some of the competitors are in [the] The Greater Bay Area continues to receive government incentives and is therefore able to offer an attractive lower rate option[s] The company added to its shipping lines.

Of the six other Chinese ports on Drury's top 10 list, five reported a rise in container throughput last year. Shenzhen remained flat with a slight decline of 0.5 percent to 29.9 million annual TEU.

The Hong Kong port is also facing increasing competition from its counterparts in Southeast Asia, as manufacturers increase their production outside China, Hadland added.

Singapore, the world's second-busiest port after Shanghai, has benefited “because Southeast Asia, and Vietnam in particular, has picked up a lot of the 'China plus one' story,” said Anup Singh, global head of shipping research. In oil brokerage.

China remains by far the “strongest producer across all industries,” and its production and transportation infrastructure is unparalleled compared to that of most Southeast Asian countries, said Andrea Corrone, vice president of Asian operations at Berlin-based shipping company Fortwo. .

Additional reporting from Robert Wright in London