A storm in a port

Jessie Chung, HKCTOA
HKCTOA chairman Jessie Chung: “There is an urgent need for additional barge berths and back-up land"

The seemingly chronic decline in container throughput at the Port of Hong Kong is becoming a source of tension between industry bodies and the Government of Hong Kong.

On July 15, Government statistics revealed a 10.5% fall in container throughput at the Port. Five days later, industry stakeholders, including Hong Kong Container Terminal Operators Association chairman, Jessie Chung, joined Joey Lam, deputy secretary for Transport and Housing and Maisie Cheng, director of Marine to thrash out a way to emerge from the current malaise.

One can only speculate on the mood during the meal but upon leaving the venue and issuing a statement to the press, Ms Chung offered a great deal more for the government to digest.

Industry-wide consensus on land rationalization

“There is an industry-wide consensus to urge the government to rationalize the land use and provide additional barge berths and back-up land to restore the competitiveness of Kwai Tsing Container Terminals,” said Ms Chung.

The Government’s proposals, released in mid-2015, outlined the first phase in raising the yard to berth ratio of Kwai Tsing Container Port from 11.6 ha to 12.4 ha, per berth. The current yard to berth ratio is far below the international standards, in this regard, every bit of land is particularly important to our operational efficiency,” she added.

The structural changes in the world’s shipping market and the ongoing changes in the throughput mix handled in Hong Kong over the past decade have been particularly challenging to the Kwai Tsing Container Port.

“More ultra-large vessels berthing, alliance restructuring and additional transshipment volumes have increased the operational complexity that we all face. Kwai Tsing Container Port has seen the rise of vessel-to-vessel transshipment volumes from 44.9% in 2005 to 58.7% in 2015 and the increase in river-based container traffic in the Pearl River Delta from 2m teu in 2005 to 2.8 m teu in 2015,” said Ms Chung.

“There is an urgent need for additional barge berths and back-up land for handling the high barge and transshipment volumes, which occupy space in the terminals for longer periods of time than truck based cargo,” she added.

Ms Chung said the Government’s proposals, released in mid-2015, outlined the first phase in raising the yard to berth ratio of KTCP from 11.6 ha to 12.4 ha, per berth. The current yard to berth ratio is far below the international standards, in this regard, every bit of land is particularly important to the operational efficiency KTCP.

The land optimization and other infrastructure initiatives that the industry originally proposed should enlarge the total storage area and provide for an increase in annual capacity of 3-4m teu, equivalent to an additional three or four new container berths.

In an emailed response to Hong Kong Maritime Hub a spokesperson for the Transport and Housing Bureau insisted the Bureau was committed to strengthening the competitiveness of Hong Kong Port and had undertaken or proposed tangible initiatives to meet that goal. These include:

  • Deepening the Kwai Tsing Container Basin and its Approach Channel;
  • Making better use of land around container terminals and other facilities to accommodate growth in transshipment and allow efficient operations;
  • Providing additional barge berths at container terminals to enhance efficiency of handling containers transported by barges;
  • Upgrading the Stonecutters Island Public Cargo Working Area into a modern container handling facility to improve port efficiency; and
  • Rationalising the management of port back-up land let under short term tenancies to enhance support for port operations.

Dredging work to deepen the Kwai Tsing Container Basin and its Approach Channel from 15m to 17.5m has been substantially completed in April this year to allow ultra-large container ships to call at Hong Kong Port at all tides.

Hong Kong Port
Container throughput at the Port of Hong Kong declined 10.5% during the first six months of 2016

Back up land integration

“Work is currently in progress to integrate three pieces of port back-up land into the container terminals to provide much-needed additional yard space for container storage.  Moreover, three new port back-up sites have been identified to support terminal operations through short-term tenancies.  They will be available from end 2016 onwards,” the spokesperson said.

“To increase the handling capacity of Hong Kong Port and meet the increasing demand for barge berths at the container terminals, we made available a new barge berth for container terminal operations from June 2015.

“We will soon make available through short-term tenancy another waterfront site for barge berthing.  In addition, we are making preparatory work to rezone two other sites for permanent barge berthing.  Furthermore, a sea frontage of 120m to be released from the Stonecutters Island Public Cargo Working Area will soon be available to support terminal operation,” she added.

The THB said it had also improved the management of port back-up land by extending the tenancy for container storage and cargo handling, restricting the land to single use and waiving the triennial rental review to encourage operators to upgrade their cargo handling facilities.

“With the implementation of the above measures, the capacity and efficiency of Hong Kong Port will be enhanced.  The Government will maintain close liaison with the port players so as to respond to their needs promptly, thereby maintaining Hong Kong’s position as a transshipment hub in the region,” the THB spokesperson concluded.

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