Should the ‘cost’ include relative hinterland prices and other supply chain factors? What are the exact prices paid by lines and forwarders for using a particular terminal? Does the Terminal Handling Charge (THC) accurately represent the true price paid by the line? What is the true ‘cost’ of a delay due to bureaucracy? The variables are many. But a few figures are available which can serve as a rough comparative guide to using terminals in southern China and Hong Kong.
Breaking the headline ‘cost’ figures down for Hong Kong and Mainland China – and obviously prices vary by terminal – the World Bank’s Ease of Doing Business survey says export procedures at Hong Kong including ports and terminal handling, customs clearance, document preparation and inland transportation are more expensive at $625 than the average for Mainland China of $500. However, Hong Kong is easier to use, with the process managed in just six days and requiring four documents compared with China’s average of seven documents and 21 days – and the time differential for imports is even greater.
That generalisation is supported by the THCs levied by member lines of the Transpacific Stabilization Agreement. Carriers loading at Hong Kong charge HK$2140(US$275), almost double the US$141 cost of loading in southern China.
The Hong Kong Container Terminal Operators Association and a number of leading terminal companies refused to comment when contacted about handling fees by Port Strategy, but lines claim the discrepancy is because of the higher stevedoring charges they must pay at terminals in Hong Kong.
However, Paul Tsui, Chairman of the Hong Kong Association of Freight Forwarding and Logistics, says that while using terminals in Shenzhen and Guangzhou are generally cheaper and have been for some time, rampant labour and resource inflation in the Pearl River Delta region is narrowing the gap.
“The Remnimbi is appreciating also,” he adds, “so within the next two to three years I think the cost gap between Hong Kong and those ports will be closed.”