Hong Kong port reached a dismal milestone in June, posting its 12th consecutive monthly decline in throughput for the first time, handling just shy of 13% fewer containers than in the same month last year.
The port handled 1.7 million TEU in June, down from 1.97 million TEU in the same month in 2014.
Worst affected were the terminals at Kwai Tsing – operated by Hutchison Port Holdings, Modern Terminals and Cosco – that recorded a drop in volumes of 14% compared to June in 2014. It is the fourth month of double-digit declines at the terminals that handled an incredible 218,000 fewer twenty-foot-equivalent units than in June last year.
A look at the first half of 2015 shows the container terminals have handled close to 1 million TEUs less than in the first six months of last year, a drop of 11%. When the river trade and mid-stream containers are added the port recorded an overall decline of 9.7 % year-on-year in the first half of 2015, handling 10.1 million TEU.
Compared to other hub ports in the region, Hong Kong has performed poorly. In the first half of the year, Shanghai’s throughput was up 4.5% y/y (18.03 million TEU), while Singapore handled 4.4% more containers in the first half than in 2014 (16.5 million TEU).
In a study released in May, Deutsche Bank said Hong Kong could expect a 30% fall in throughput at best, and in a worst case scenario, the volumes would be slashed by 50% as geographic and cost advantages worked against Hong Kong viz-a-viz Shenzhen. Such a cut in volumes would drop the throughput to 11 million TEU a year and take Hong Kong out of the top 10 rankings.
The bank’s study closely examined the transshipment portion of Hong Kong’s throughput that makes up 70% of the port’s throughput. This type of cargo was described by Maersk Line’s North Asia head Tim Smith as being “highly portable,” meaning it could be shifted out of Hong Kong by the carriers with relative ease.
Transshipment is also double-counted, which is standard practice in hub ports but has the effect of inflating the throughput figures. When transshipment volumes start to fall, the throughput drop accelerates, a situation facing Hong Kong now.
On a y/y basis, the Deutsche Bank study found transshipment continued to shrink, dropping 3% in 2014 after a 1% drop in 2013 and a 2% fall in 2012.
This post was sourced from IHS Maritime 360: View the original article here.
