Hong Kong's Port Loses More Market Share to its Neighbors
With volumes driven down by the ongoing trade war and strong regional competition, Hong Kong has fallen to seventh place on the list of the world's busiest ports, according to Bloomberg. As recently as 2016 it was ranked sixth, and it is the first time in 40 years that it has fallen to the current level. It may lose its seventh-place spot to Guangzhou as early as this year.
The other competitors at the top of the list are all located in East Asia, and most of them are in mainland China. These include the megaports of Guangzhou and Shenzhen, both located next door to Hong Kong, along with Shanghai, Ningbo-Zhoushan and Qingdao.
Hong Kong was at the top of the list until 2004, but it has been falling down the rankings ever since. Regional competitors continue to see strong growth, but its own volumes are in decline.
Shanghai, which has invested billions in high tech terminal expansion projects, is currently the busiest port in the world. Its latest projects are located on an island, far from any neighbors. The port of Guangzhou, just 50 miles from Hong Kong, has opened a giant container terminal in an industrial area in Nansha, and it has seen rapid traffic growth in recent years. By comparison, Hong Kong has not added a new terminal in more than a decade, and any potential expansion would have to compete with demand for commercial development along the waterfront.
In response to the market pressure, Hong Kong's private terminal operators have formed a consortium to coordinate the management of their facilities. Leading operator Hongkong International Terminals - a division of Hutchison - has implemented a salary freeze in order to control costs. But as regional competitors pile on more infrastructure investment - like Singapore's 65 million TEU terminal at Tuas, which will open in phases over the coming decades - it may prove challenging for Hong Kong to regain pole position.