While the status of Hong Kong slowly declines:

The main growth is in Shenzhen which you could think of as Hong Kong’s main rival. There the growth was 14% — 18.46 million containers during the year. It could be argued that Shenzhen is siphoning off Hong Kong’s direct South China export containers. Shippers are increasingly sending their exports out via Yantian.

By way of Hong Kong there are customs delays, regulations and high terminal handling charges which add US$250 per FEU to the cost of exporting boxes via Hong Kong instead of Shenzhen.

Alan Lee, chairman of the Hong Kong Container Terminal Operators’ Association, said the drop of 5% over two years was bad news. He said, ‘At Shenzhen terminals, 90% of all cargo is direct shipments from the factories and they are growing at 14%. We are growing at 2.8% with 66% of containers counted twice. We are overstating Hong Kong’s growth and understating that of Shenzhen.’

Shenzhen/Yantian has been gaining in prominence in recent years, with an increase in direct sailings, transitioning of carrier and 3PL operations and customer service teams from Hong Kong to Shenzhen/Yantian, etc. Southern China has been the manufacturing center of the country, and shipping direct from Yantian as opposed to Hong Kong is easier and cheaper. For years Hong Kong enjoyed it’s status as the “gateway to China”, serving as the conduit for mainland cargo headed to the U.S. and Europe. However, post-1997, along with the increasing liberalization of China’s economy, there is less of a need to use Hong Kong as a gateway to and from mainland China, with most companies these days buying direct from manufacturers in China and setting up shop on the mainland as opposed to Hong Kong. I expect Hong Kong Port to continue to decline slightly as Yantian’s prominence grows.

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