3pl ~ news

GOOD OLD DAYS HAVE DESERTED HONG KONG
The Year of the Dog has already cocked its leg on Hong Kongs port business and the year has barely started. Just last week the official 2005 container throughput figures were released and there was not much to celebrate: Not only did the port grow by just 2 percent, it also lost its world No 1 title to Singapore.
Of chief concern, of course, is not the world port title. That will just mean editing some port marketing literature. But to grow by only two percent in such a robust environment is further evidence - as if any was needed - that Hong Kong is struggling to cling to its competitiveness.
A closer look at the numbers reveals that within the 22.4 million TEUs Hong Kong handled in 2005, much of the growth came from transhipment and river containers that are counted twice. Remove the double counting and the port would be mucking with a minus.
In 2004, throughput growth climbed as vibrant China trade and recovering domestic and regional economies strengthened exports, but since then the bar chart has headed straight for the bar. Direct exports from Guangdong manufacturing areas continue to migrate across the Shenzhen River to be loaded on vessels departing from Yantian as the Hong Kong government struggles to implement vital cost-saving cross-border initiatives. Most of the initiatives have already been agreed upon by Hong Kong and the mainland but are not being consistently implemented, despite the reduction of trucking costs being "mission critical"" for the port.
None of the analysts we spoke to were surprised by the declining growth of the port. Hong Kong is simply battling to participate in the overall growth of the South China market, and it is growing fast.
The percentages may have dropped from 2003"s stratospheric 40 percent with the addition of extra capacity, but Shenzhens 19 percent increase year-on-year to almost 17 million TEUs is impressive. Consider this: Five berths were commissioned in 2005 and added almost two million TEUs to the total in under a year. Where else but China can those numbers be seen.
The throughput of Shenzhen is expected to rise by high double-digit percentages over the next few years as the GDP of Guangdong and the mainland barrels along at eight or nine percent. But despite being surrounded by healthy growth, Hong Kong will find it more difficult to hold on to market share as shippers look for the low-cost options offered across the border.
It"s not all bad, however. A shifting of focus to barge traffic from the growing Western Pearl River Delta manufacturing areas will keep the box counter ticking over and may provide the answer to Hong Kong"s declining throughput.
We need to get growth back into the market. A lot of investment and jobs are riding on it.