THE deal between Cosco, China Shipping and Hutchison Port Holdings Trust to jointly develop a container terminal in Hong Kong has raised hopes that the port's decline will be halted with the arrival of greater transshipment volumes.
The port of Hong Kong saw container throughput shrink by 3.3 per cent in 2013, marking the largest decline among the world's top 20 ports last year and dragging the port down to fourth place behind Shanghai, Singapore and Shenzhen.
Once the reigning champion between 2000 and 2004, Hong Kong is now bearing the brunt of increasing competition from other Pearl River Delta ports, and adding to this is slowing growth in the South China region.
In the first two months of 2014, Hong Kong achieved just 0.9 per cent growth in container volumes, compared to 5.6 per cent growth in Shanghai and 2.2 per cent growth in Singapore, reports Alphaliner.
A bright spot has been Hong Kong's ability to attract new terminal investments in the shape of Cosco and China Shipping acquiring a 40 per cent and 20 per cent stake, respectively, in Asia Container Terminals (ACT) last week from Hutchison Port Holdings Trust for US$318 million.
ACT owns and operates a 740-metre berth at Container Terminal 8 West with annual handling capacity of two million TEU. It is adjacent to the Cosco-HIT Terminal (CT8 East), which allows the two terminals to form a 1,380 metre contiguous berth that can handle containerships of up to 19,000 TEU.
The terminal investment deal may help Hong Kong stem its volumes decline, even though shifts in shipping line alliances would lead to further loss of market share to other South China ports later this year.
Of note, the proposed P3 vessel-sharing alliance of Maersk, CMA CGM and MSC will cut the number of Hong Kong port calls on their westbound strings to Europe from six to three from mid-2014, which could lead to significant volume losses for the port.
The entry of the two Chinese carriers, through their respective container terminal investment arms - Cosco Pacific and China Shipping Terminal Development (CSTD) - will provide Hong Kong with a much needed shot in the arm.
They are the only carriers to have an equity stake in the Hong Kong terminals, as the other three terminal operators (HIT, MTL and DPW) are independent operators.
Once the reigning champion between 2000 and 2004, Hong Kong is now bearing the brunt of increasing competition from other Pearl River Delta ports, and adding to this is slowing growth in the South China region.
In the first two months of 2014, Hong Kong achieved just 0.9 per cent growth in container volumes, compared to 5.6 per cent growth in Shanghai and 2.2 per cent growth in Singapore, reports Alphaliner.
A bright spot has been Hong Kong's ability to attract new terminal investments in the shape of Cosco and China Shipping acquiring a 40 per cent and 20 per cent stake, respectively, in Asia Container Terminals (ACT) last week from Hutchison Port Holdings Trust for US$318 million.
ACT owns and operates a 740-metre berth at Container Terminal 8 West with annual handling capacity of two million TEU. It is adjacent to the Cosco-HIT Terminal (CT8 East), which allows the two terminals to form a 1,380 metre contiguous berth that can handle containerships of up to 19,000 TEU.
The terminal investment deal may help Hong Kong stem its volumes decline, even though shifts in shipping line alliances would lead to further loss of market share to other South China ports later this year.
Of note, the proposed P3 vessel-sharing alliance of Maersk, CMA CGM and MSC will cut the number of Hong Kong port calls on their westbound strings to Europe from six to three from mid-2014, which could lead to significant volume losses for the port.
The entry of the two Chinese carriers, through their respective container terminal investment arms - Cosco Pacific and China Shipping Terminal Development (CSTD) - will provide Hong Kong with a much needed shot in the arm.
They are the only carriers to have an equity stake in the Hong Kong terminals, as the other three terminal operators (HIT, MTL and DPW) are independent operators.
Cosco Pacific already owns 50 per cent of the Cosco-HIT terminal, which handled 1.64 million TEU in 2013, accounting for seven per cent of Hong Kong's total box throughput last year.
It will gain access to the 1.1 million TEU in additional volumes handled by ACT last year, giving it a 15 per cent share of the total volume in Hong Kong.
As for China Shipping Terminal Development, the investment in ACT is the group's first terminal investment in Hong Kong. CSTD has investments in 13 Chinese ports and minority stakes in terminals in Kaohsiung, Zeebrugge and Damietta as well as joint venture terminals in Seattle and Los Angeles.
It will gain access to the 1.1 million TEU in additional volumes handled by ACT last year, giving it a 15 per cent share of the total volume in Hong Kong.
As for China Shipping Terminal Development, the investment in ACT is the group's first terminal investment in Hong Kong. CSTD has investments in 13 Chinese ports and minority stakes in terminals in Kaohsiung, Zeebrugge and Damietta as well as joint venture terminals in Seattle and Los Angeles.
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