Despite the erosion of its competitiveness, the Port of Hong Kong retained its ranking as the world's No. three container port in 2012. The bad news was that while retaining its standing, the port posted a 5.3 percent drop in container throughput in 2012 over the previous year. At 23.09 million 20-foot equivalent unit (TEU) of containers, Hong Kong edged out the Port of Shenzhen, at 22.94 million TEU last year, up slightly by 1.6 percent year-on-year. (A 20-foot equivalent unit (TEU) is a measure of containerized cargo capacity).

A report by Alphaliner attributes Hong Kong's weaker results to a drop in mid-stream volumes, which shrank 19.3 percent to 5.62 million TEU, the lowest level in over a decade. On the other hand, Hong Kong's main Kwai Tsing terminals held on to most of their volumes last year, with 17.47 million TEU, compared to 17.42 million TEU in 2011.

"Now we are No 3 (in terms of container port ranking), and with Shenzhen (port) growing so fast, it will overtake us and we will be No 4. Although we have not grown as fast as other ports like Shanghai and Singapore, they are not competitors in most cases, and they are serving different markets and different sectors, and not forgetting Guangzhou and Shenzhen, we are fighting for the same pie," explains Richard Colwill, managing director of the global consultancy firm BMT Asia Pacific. A marine engineer by training, Colwill is actively-involved in marine planning and risk studies, associated with port development.

"Being a good No 4 is absolutely fine. There seems to be a feeling that this decline means we are not as good as we used to be, and we are not growing as fast. There have been some small hiccups, but Hong Kong's port operations remain at world standards," he remarks.

Colwill contends services provided in the port and the city are significantly better than services in other parts of the world and "we should be proud of this and we should have more visibility".

Pointing out that the most valuable assets of Hong Kong are its geography and the energy of its population, Colwill says, "Those assets are favorably deployed to the benefit of the city as a whole. As well as the shipments of boxes, there is a back end industry involved in contracts, shipments, transport, legal and ship servicing, ship support and people like us, who are in maritime consultancy as well."

Regarding the expansion of Shenzhen ports, Colwill elucidates that it is only natural. They are closer to the cargo sources, cheaper and have lower operational costs.

"To bring cargo to Hong Kong you need intangible values. Some of these values are efficiency of the port, efficiency of customs and some intangible values maybe to do with taxation of goods you are moving. So it is not a surprise that ports were able to develop and grow as they did at a fast pace and mature," he explicates.

Colwill explains that BMT has recently finalized a study for "Hong Kong's position as an international maritime center" which has been submitted to the government. It is expected to be released in summer. BMT is also now finalizing another major report - Development Plan for Hong Kong Port 2030 - that will be submitted to the government soon.

However, Colwill declined to comment on both studies.

But whatever recommendations BMT makes to the government, it is quite clear that Hong Kong faces challenges around every corner to maintain its competitiveness.

(HK Edition 06/28/2013 page3)