19th April 2024 – (Hong Kong) Hong Kong’s position as a pivotal maritime hub suffered a significant setback as it recently fell out of the world’s top ten busiest container ports for the first time in decades. This decline reflects a broader trend of shifting trade patterns and increasing competition from mainland China and Southeast Asia. The city’s maritime industry, which once epitomised its economic vitality, now faces the challenge of reasserting its relevance in an evolving global trade landscape.

The statistics from Alphaliner, a leading shipping data provider, paint a stark picture: Hong Kong’s port throughput plummeted by 14.1% year-on-year to 14.34 million twenty-foot equivalent units (TEUs) last year. This significant drop was not just a numerical decline but symbolised the city’s diminishing stature on the maritime world stage. Once the busiest port globally from 1987 to 2004, Hong Kong was surpassed by Dubai’s Jebel Ali port, pushing it to the 11th position.

Several factors contributed to this downturn. Primarily, Hong Kong has been grappling with fierce competition from its mainland counterparts. Ports like Shanghai, Ningbo-Zhoushan, and Shenzhen have seen substantial growth due to direct mainland connections and state-backed expansions, enhancing their attractiveness to international shipping lines. These ports offer more competitive pricing and convenience, factors that Hong Kong has struggled to match.

Moreover, the redirection of river transport cargo to nearby ports like Shenzhen and Guangzhou indicates a significant shift in the Pearl River Delta’s logistics dynamics. This shift is compounded by the broader decentralidation of manufacturing from Hong Kong to other parts of China and the region, diminishing the city’s role as a primary gateway to the mainland.

In response to these challenges, the Hong Kong government and the maritime industry have initiated several strategies aimed at revitalising the port’s operations. The Transport and Logistics Bureau (TLB), despite acknowledging the throughput decline, has argued that different ranking methodologies could still favour Hong Kong. According to the TLB, other metrics, such as the Xinhua-Baltic International Shipping Centre Development Index, place Hong Kong fourth globally, highlighting its efficiency and shorter vessel stay times compared to other major ports.

Strategically, the city plans to pivot from focusing merely on cargo volume to enhancing the value-added services it can offer. This includes developing high-value maritime services and strengthening its talent pool—a move aimed at transitioning Hong Kong from a traditional cargo hub to a sophisticated maritime services centre.

To regain its competitive edge, Hong Kong must embrace innovation and diversification. The maritime sector is increasingly influenced by technological advancements, and Hong Kong could invest more in digital and green port technologies. These investments would not only improve operational efficiency but also enhance the port’s environmental profile, making it more attractive in an era where sustainability is becoming crucial.

Furthermore, diversifying its service offerings to include more than just cargo handling could provide new revenue streams. For instance, expanding into maritime finance, insurance, and legal services could capitalise on Hong Kong’s robust financial sector, creating a more integrated maritime cluster.

Another critical area is strengthening collaborations with other ports and maritime organizations both regionally and globally. By forming alliances and participating in joint ventures, Hong Kong can leverage collective strengths and mitigate the impacts of competitive pressures.

Additionally, fostering closer ties with countries in Southeast Asia could help position Hong Kong as a crucial player in the burgeoning “China-plus-one” strategy, where manufacturers seek to diversify production away from mainland China.