**Hong Kong**: A recent tour highlights how the city is adapting to increased competition in global shipping and logistics from mainland China and other international hubs, while also aiming to maintain its unique market advantages amid economic shifts and a focus on decarbonising the industry.
Hong Kong, often referred to as the ‘fragrant harbour’, has long been recognised as a pivotal hub for global shipping, air freight, and logistics, situated within just 1,100 square kilometres and home to over seven million people. This densely populated city, ranking fourth globally in population density, was the subject of an extensive tour and series of interviews by David Priestman, highlighting its continued relevance in the supply chain landscape amidst escalating competition.
The city has historically thrived as a superhub, but it faces increasing challenges from the rapid development of mainland China’s ports and other international hubs like Singapore, Dubai, and Busan in South Korea. While Hong Kong’s container port has seen a gradual decline in its global ranking—currently sitting at tenth out of 700 worldwide—it has been reported that total throughput TEU volume is rebounding to levels seen before the COVID-19 pandemic. The port sector remains vital, contributing over six percent to the city’s GDP and providing employment for approximately 175,000 individuals, representing five percent of the workforce.
During Priestman’s tour, discussions centred around the ‘Greater Bay Area’ (GBA), a burgeoning superhub that encompasses Hong Kong, Shenzhen (the fourth largest global port), Guangzhou, Macau, and more. This region is now dubbed the largest shipping hub globally, with improved connectivity afforded by infrastructure projects like the Hong Kong-Zhuhai-Macao Bridge. Notably, this evolution signifies a shift away from Hong Kong’s longstanding unipolar dominance, further integrating the territory into the broader Chinese economy. Stakeholders are now contemplating whether Hong Kong can maintain its unique market advantages over its competitors.
Victoria Harbour remains a strategic asset, enabling efficient turnaround for container ships within a day to hundreds of international destinations. Traditionally, Hong Kong has served as a gateway to China, with more than 9,000 international companies establishing offices in the city. The Hong Kong Trade Development Council (HKTDC) still views market fundamentals as robust, attributing this to the city’s unique attributes in trading, commercial law, and a large network of port-related services, including an international centre for maritime legal arbitration.
The government has initiated an action plan to bolster inward investment and enhance the local maritime infrastructure, including the release of four new logistics development sites near container ports and the construction of a third runway at Hong Kong International Airport, expected to increase capacity by 50% by 2035. Dr. Patrick Lau, Deputy Executive Director of HKTDC, noted the significance of developing new regional trade lanes and increasing collaboration within the GBA, while also emphasising Hong Kong’s ongoing role as a critical gateway, especially as the mainland opens its market further.
Benjamin Wong, Head of Transport and Logistics for InvestHK, highlighted the city’s geographical advantage, stating that it is strategically located four hours by plane from major Asian markets. He contended that while fluctuations in business rankings are possible, Hong Kong remains an efficient business location due to its streamlined governance structure. Increased tax incentives for shipping operations further cement its attractiveness to international shipowners.
The event also touched upon the impact of geopolitical tensions and the pressing need for the shipping industry’s decarbonisation. Emanuele Grimaldi, chairman of the International Chamber of Shipping, indicated that extreme weather events have accentuated the urgency for the industry to move towards net-zero emissions. Simultaneously, amid increasing protectionism, the need for strong maritime dialogue remains essential.
The Hong Kong Shipowners Association, led by Sandy Chan, plays a pivotal role in shaping shipping regulations and promotional activities, advocating for the development of green bunkering capabilities. Chan noted that while China is emerging as a leading supplier of alternative fuels, the existing fleet’s capacity to use greener alternatives remains limited.
The outlook for the shipping industry appears cautiously optimistic, with shipping volumes expected to increase by an average of 2.4% per year for the next decade. However, concerns over the labour pool and the future of seafaring careers have prompted initiatives like the Marine and Aviation Training Fund to enhance training and attract new talent to the sector.
As Priestman concluded his tour at Modern Terminals within Victoria Harbour, he learned of their advancements in efficiency and automation, as well as their aspirations to become a leading transshipment hub. With a significant annual throughput capacity and the adoption of electric remote-controlled cranes, the terminal exemplifies ongoing innovation in Hong Kong’s logistics and shipping landscape.
The overarching challenge remains for Hong Kong to sustain its business confidence and operational stability while navigating the pressures of both local and international dynamics. The spirit of enterprise among the logistics professionals he encountered exemplified a commitment to maintaining the city’s vital role in global shipping and logistics, ensuring that Hong Kong remains a focal point in the maritime sector.
Source: Noah Wire Services
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