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The Hong Kong Shippers’ Council cautioned of the negative impact on competition with regards to formation of the “Hong Kong Seaport Alliance”


Press Statement   (9 January 2019)

The Hong Kong Shippers’ Council cautioned of the negative impact on competition with regards to formation of the “Hong Kong Seaport Alliance”.

The Hong Kong Shippers’ Council (Council) expressed deep concern over the negative impact on competition from the formation of the Hong Kong Seaport Alliance (Alliance).

 The four biggest container terminal operators in Kwai Ching, namely, Hongkong International Terminals Limited, Modern Terminals Limited, COSCO-HIT Terminals (Hong Kong) Limited, and Asia Container Terminals Limited, announced on 08 January 2019 that they would form the Hong Kong Seaport Alliance. The four terminal operators account for over 95% of container terminal businesses in Hong Kong.

While details of how this Alliance operate are lacking, the Council is extremely worried about over-whelming market position of the Alliance. “With 95% market share, the industry virtually has no choice”, says Willy Lin, Chairman, The Hong Kong Shippers’ Council. “The Alliance could agree on non-competition agreements, over clients and pricing”, Lin continues.

Mr. Lin agrees that asset sharing could enhance asset utilization and productivity, but cautions that “there is no mechanism to monitor, not to mention regulate, the competition behavours of the members of the Alliance”.

Mr. Lin goes on to say that “some shipping lines have lowered their Terminal Handling Charges (THCs) for shipments import and export through Mainland China ports, and have cancelled or lowered some of their surcharges in the past few years, but charges in Hong Kong just going up in both charge levels and numbers”.

Mr. Lin reminds that “Hong Kong shippers are still paying the highest THCs in the world. Besides, Hong Kong shippers hardly see any justification for the over HK$600 Documentation Fee, the HK$135 Depot Fee, and many other ridiculous charges”.

“It is necessary to ensure that benefits from productivity improvement are passed down to shippers and that cost of shipping through Hong Kong are lowered”, Lin says. “Shippers will always make their routing decisions based on total shipping costs”.  

 

For inquiry, please contact:

Mr. Sunny Ho, Executive Director, The Hong Kong Shippers’ council

(Tel: 2211 2332, Mobile: 9039 5103, E-mail: sunnyho@hkshippers.org.hk)