Sunday, June 16, 2019
 
Columnist
Martin Hennecke

Shippers' Council fears terminal monopoly
 
10/01/2019
 
The Hong Kong Shippers' Council is attempting to find out more about the top three terminal companies' announcement on co-establishing the Hong Kong Seaport Alliance, which represents 95 percent of market share. It might be a monopoly, depending on how the league operates and charges, council chairman Willy Lin Xuanwu said. If the alliance can make the terminal transportation arrangements better, increase efficiencies, lower costs, ensure the SAR shipping hub's competitiveness, and benefit the SAR's economy as a whole, it is worthy of support, Lin said. Four terminal operators, including CK Hutchison's (0001) Hongkong International Terminals, Modern Terminals, COSCO-HIT Terminals (Hong Kong), and Asia Container Terminals had announced formation of the alliance on Tuesday. The alliance plans to start joint operations of the Kwai Tsing Container Terminals' 23 berths progressively within 2019. Planning is being conducted by an Operations Coordination Team using a common terminal operating system. There are 24 ports in the terminal. Lin said although it may have a chance to deliver more efficient service to carriers if the alliance could share the infrastructures, currently there is no mechanism to supervise whether those terminal operators would stop competition, indicating a monopoly. He added that Hong Kong's fees have climbed in recent years, while mainland terminal fees fell. He pointed out if the efficiencies are enhanced and utilization rises, operators have the responsibility to reduce the related charges. The port and logistics sector accounts for 3.2 percent of Hong Kong's GDP. "The terminal industry is naturally easy to monopolize," said Steve Lo Wong-fung, honorary president of the Chamber of Hong Kong Logistics Industry. "If the terminals asked for higher prices, we logistic companies, as an intermediary, would shift the price to clients."

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