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Grim outlook for PRD''s box terminals
2009/2/24
Hong Kong recorded an incremental container throughput increase of one percent in 2008, but a closer look at the Port Development Council numbers reveals the extent of the port''s decline.
The 24.28 million TEUs handled by Hong Kong were enough to keep it in third place behind Singapore and Shanghai, and ahead of Shenzhen, but crashing mainland exports saw boxes coming through the port reaching a grim seven-year low.
Hong Kong manufacturers own an estimated 70,000 factories in the Pearl River Delta, but more than a quarter may be forced to close down, according to the Federation of Hong Kong Industries. This will add to the pressure being placed on Hong Kong''s logistics services.
Much of the growth in Hong Kong over the past few years has come from transhipment and river trade cargo that is double counted, but even this tally-twice sector plummeted in the last two months of 2008. In November, the drop year-on-year was 31.1 percent and this accelerated to 38.3 percent in December as transhipment dried up and river trade slowed. January throughput was down 23.3 percent.
But of greater concern was that the economically more valuable direct exports also recorded a rapid decline in throughput in January, falling 18.7 percent. These boxes from the PRD factories are trucked in to Kwai Chung terminals operated by Hongkong International Terminals, Modern Terminals and DP World.
Hong Kong long ago said goodbye to double-digit growth in container volume, but it must be a bitter pill to swallow for the once busy terminals in Shenzhen where the throughput rose just 1.5 percent last year, a direct result of the poor manufacturing output. In January, Shenzhen''s throughput fell 17.5 percent to 1.52 million TEUs, the worst monthly drop on record.
Analyst Charles de Trenck, the founder of Transport Trackers, said 2009 would be a difficult year for both Hong Kong and Shenzhen.
"There will be a double digit decline in first quarter volumes for Hong Kong and Shenzhen ports, but this decline will diminish as the year progresses," he told Cargonews Asia.
De Trenck said Hong Kong''s underlying core container volume had been flat for a decade and with the number of container moves in the PRD declining in the first quarter, the figures for Hong Kong were going to be "horrible".
"The problem is Chinese New Year was early this year and that will affect container volume in January and February. But by March, there will be no more excuses for poor throughput."
With many factories in the PRD still closed, port throughput for February and March will continue its shocking decline, with some predicting a drop of 40 to 50 percent.
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2009/2/25