BULK HANDLING

Threat to Hong Kong transhipment prowess

10 years ago

Hong Kong’s transhipment could be cut by as much as 2.4m teu if Cabotage rules are relaxed, according to a recent report from the Department of Supply Chain and Information Management.

Relaxing the policy could lead to the competitive strengths of Hong Kong being impaired

Impact of Cabotage Relaxation and PRD Competition to Hong Kong Maritime Logistics Industry, explains that the threat to Hong Kong is severe and highlights that the policy could have a negative impact on mainland China.

Relaxing the policy could lead to the competitive advantages and strengths of Hong Kong being a world-class logistics and transhipment hub being impaired.

The report stated: “For transshipments destined to or originated from non-PRD, such shipments must be originated or destined from other regions such as Asia and US. Hence, the total throughput affect by Cabotage relaxation would be twice that of transshipment throughput for non-PRD China.”

“According to shipping statistics provided by the HKSAR Census and Statistics Department, the number of non-PRD related laden containers through Hong Kong has been dropping since 2011.”

“As more free trade zones benefit from the relaxation of Cabotage rules, the decrease will be even more drastic. In the worst case scenario, Hong Kong could lose all transshipment involving the non-PRD region, resulting in a 14% decrease of the throughput of Hong Kong.”

The report recommended that Hong Kong deputies of National People’s Congress could provide feedback on the seubsequent adverse consequences to the relevant government departments in Beijing to avoid further relaxation on Cabotage rules.

It is important that the Hong Kong Government should closely monitor Cabotage developments in the mainland. The report requested that the Government could conduct a further in-depth study on the impact of Cabotage relaxation on Hong Kong as a whole, addressing questions such as Can Hong Kong continue to function as a logistics hub?

The report concluded: “A further study should involve consultations and forums, obtaining views from various maritime logistics stakeholders and associations in Hong Kong. This could help in terms of providing feedback to government officials in Beijing.”

“This could also review the impact of Cabotage relaxation on domestic ship liners and the corresponding economic damages to mainland China as a whole”