It may be the industry that our city was founded upon – but the future of shipping in Hong Kong is looking uncertain after a dramatic slump in business. As the authorities take a new tack in an attempt to reverse the nosedive, Anna Cummins investigates what it would mean to lose this huge slice of our city’s identity. Photography by Calvin Sit
Hundreds of ships drift in and out of Hong Kong every day. In fact, to be precise, 380,050 vessels traversed the city’s waters in 2014. These ranged from huge, hulking long-haul container ships right down to chugging river barges. And many of these boats transported a phenomenal amount of… well, stuff. And, in our fragrant harbour, they still do. More than 90 percent of all global trade is carried by sea and our city alone handles more than 22 million TEUs – a measurement roughly equivalent to one shipping container – of cargo every year. That includes everything from those novelty pyjamas your mum bought you last Christmas to less festive bulk cargo such as coal or gravel.
Since Hong Kong is one of the world’s busiest maritime hubs, those high figures are far from surprising – but there’s more to the shipping industry than just numbers when it comes to our city. It’s a facet of our identity so ingrained that it’s easy to take for granted. “If there was no port, there’d have been no Hong Kong,” points out Dr Stephen Davies, a marine historian at the University of Hong Kong and the former director of the Hong Kong Maritime Museum. It’s an integral part of the city’s history, particularly as The Hongkong and Whampoa Dock Company was founded as far back as 1863, while the Taikoo Dockyard and Engineering Company was set up in 1902. In 1972, in the face of increasing competition across the region, the two dockyards merged and were relocated to Tsing Yi.
But now the port is faltering. Between 2014 and last year, the overall throughput – the total volume of cargo moved – in Hong Kong fell by a whopping 9.7 percent. And the monthly throughput has dropped consecutively every month since June 2014. It’s a trend that’s set to continue into the future, too. A stark study released last year by Deutsche Bank predicted that the volume of containers handled by Hong Kong is likely to fall from between 30 to 50 percent over the next decade. It’s a huge worry for the city. This is an industry that contributed 1.4 percent ($30 billion) to Hong Kong’s GDP and employed 2.5 percent (93,000 jobs) of our total workforce in 2014.
The factors that have long made Hong Kong desirable as a maritime and trade hub, such as its sheltered and deep harbour, strategic location in Asia and position as a unique entry point into and out of China, are rapidly losing their edge to the competition. In 2012, we had the third busiest port in the world. Last year, though, we slipped to fifth place after being overtaken by Shenzhen and Ningbo-Zhoushan. Busan is now hot on our heels and the authorities in the South Korean port have stated that they’re aiming to overtake Hong Kong soon. The same Deutsche Bank study predicted that Hong Kong will fall out of the top 10 busiest ports in the world before 2025.
While this foreboding outlook can be partly attributed to a correspondingly sluggish period for global shipping of late, it’s also indicative of a change in how Hong Kong’s port will have to handle and position itself in the future. For a start, terminal handling fees here are around 30 percent higher than at other ports in the Pearl River Delta. And then there’s the competition. Nearby Shenzhen’s growth figures, for example, have successfully managed to actually buck the global trend – increasing by 4.4 percent between 2014 and last year. Rivals such as Singapore and Busan have already made moves to cut or freeze port fees in order to make themselves more attractive to cargo liners.
“Frankly, as a port, Hong Kong has only ever prospered on the back of China being a basket case,” says Davies. “Whether that’s due to the fact that China shut itself off from the 1950s to 1980s, leaving us to prosper, or whether it’s due to China’s lack of hardware until the early 1990s, it doesn’t matter. The fact is that people would trade their ships through here. But Hong Kong isn’t going to be competitive forever and, in a sense, it would be crazy to try.”
The port at Kwai Tsing, which handles 80 percent of all container cargo in Hong Kong, is run by the private sector. A spokesman for Hong Kong International Terminals, which operates 12 berths at the Kwai Tsing container terminal, seems optimistic that the company will meet its ‘new challenges’ successfully, highlighting that it is ‘actively formulating thorough plans’ to improve the efficiency of operations. But the industry is calling out for support from the government. A spokesman for the Transport and Housing Bureau tells us that the government is actively attempting to curb the fall in trade – it’s dredged a deeper channel at Kwai Tsing container terminal, for instance, to allow larger ships to use the port, as well as adding more berths to increase its efficiency. It also established a new Hong Kong Maritime and Port Board in April, to work on ‘enhancing Hong Kong’s status as an international maritime centre’.
But not everyone is convinced by the moves. “Hong Kong’s business model can be neatly adumbrated by the simple aphorism ‘always be the second mouse at the mousetrap. Never innovate because you might lose your head’,” says Davies. “The government today, they may say they are all for shipping but what they mean is that they are all for having offices for insurance and finance and shipping documentation. They don’t actually want these big smelly vulgar things filled with rough, tough seafarers anywhere near us. There’s nobody at a senior level in government who has any experience of the sea in any form.”
Indeed, the THB spokesman essentially agrees that Hong Kong’s outlook is passive. “The economic contribution of the maritime and port industry slightly edged down in the past decade,” says the spokesman. “This is a normal phenomenon in a dynamic economic system, suggesting the change of comparative advantages of different industries.” In other words, as we interpret it – ‘change happens and we’re rolling with it’.
“London is not a port,” says Davies, “but it’s still the most important place in the world when it comes to shipping infrastructure (such as arbitration, insurance and management) and some people [in our government] think that Hong Kong could be the ‘London of the East’. But London grew into this role based on a huge history and it would have to do something very crass to lose its position now. Asia is not in need of a London because... there’s already a London.” Maybe, then, we’re already sunk...
A History on the Waves
The Hong Kong shipping industry has always rapidly evolved
1863
The Hongkong and Whampoa Dock Company is founded in this year
1867
The annual tonnage carried by junks reaches 1.35 million – up from 80,000 tonnes only two decades previous
1902
The Taikoo Dockyard and Engineering Company is set up
1972
The two aforementioned companies merge and relocate to Tsing Yi
1990s
Hong Kong is the busiest port in the world several times during this decade. It’s overtaken by Shanghai and Singapore in the 2000s
2015
Shenzhen’s port overtakes Hong Kong’s for the first time. We fall from the third busiest port in the world to the fifth
2016
The Hong Kong Maritime and Port Board is established to help devise ways to develop the maritime service industry in the face of the ongoing downturn
2025
A Deutsche Bank study released last year predicts that Hong Kong will fall out of the top 10 busiest ports in the world before 2025
Facts
