Port

Smart port imperatives

Operations need to digitalise at the city’s container terminals

The steady decline in container numbers at the port of Hong Kong shows no sign of arresting anytime soon with the entrepôt likely to slide out of the top 10 port rankings as early as next year.

After three quarters of 2022, the port of Hong Kong’s cumulative throughput stood at 12.68m teu, a decline of 5% compared to the total for the first three quarters of 2021. Covid restrictions have significantly cut cross-border container traffic between China and Hong Kong all year.

The United Nations Conference on Trade and Development (UNCTAD) recently released its updated liner shipping connectivity data for Q3. This provides new data on how well the world’s countries are connected in terms of liner shipping services. Hong Kong was one of the places with the largest declines in connectivity.

“Hong Kong has seen a clear decline during the pandemic period. In reality Hong Kong has experienced a slow erosion of connectivity ever since 2010, but the past year has accelerated this trend,” analysts at Sea-Intelligence noted in a recent report.

The city’s role as a window into China is under threat. The local port community looked on with some concern in May as Danish carrier Maersk carried out landmark first international box relay shipments with China finally toying with easing its strict cabotage rules, something that has traditionally helped bolster Hong Kong throughput.

The formation of the Hong Kong Seaport Alliance in January 2019 has proven to be a smart move. The alliance comprises Hongkong International Terminals, Modern Terminals, COSCOHIT Terminals and Asia Container Terminals, covering 23 container berths at eight terminals in Kwai Tsing. Officials tell Splash the alliance has enhanced efficiencies, optimised utilisation, and improved overall service offerings to customers.

The launch of Electronic Release Order (eRO) in 2020 and the current roll out of Electronic Booking Confirmation Note (eBCN) is digitalising the procedure for import and export containers respectively, enhancing further efficiency.

Dr Jonathan Beard, a partner at EY Infrastructure Advisory, urges the port community to carry out plenty more digital initiatives. Hong Kong needs to become a smart port to prosper, he says, to digitalise the port ecosystem and streamline the flow of cargo and information through the port. Progress in this regard has been slow and bedevilled by the absence of a strong port authority that could advocate and drive change not only within the port, but also outside the port gate.

The recently appointed secretary for transport and logistics, Lam Sai-hung, visited the city’s container terminals in July to discuss with operators how best to progress with plans to transform the area into a smart port.

“Hong Kong is one of the busiest container ports in the world and has always been renowned for its efficiency. I am glad to learn that the operators have been actively investing in resources over the years to introduce modern management, advanced computer equipment and information technology systems to enhance productivity as well as improve the working environment and industrial safety,” Lam said.

A task force at the Hong Kong Maritime and Port Board, an advisory body, is expected to release details of its own smart port investigation shortly.

“The government is actively promoting the development of a smart and green port to enhance the international competitiveness of the port of Hong Kong,” Lam said.

To strengthen the collaboration with Greater Bay Area ports, the government has said it will explore establishing communication mechanisms with ports in Guangdong to better leverage the respective complementary strengths in order to promote a healthy and coordinated development among the ports. “I am confident that the port of Hong Kong will continue to enhance its competitiveness and be a preeminent entrepôt with the concerted efforts of the terminal operators and all stakeholders together with the support from both central and Hong Kong government,” says Horace Lo, group managing director at Modern Terminals Limited.

“Hong Kong has experienced a slow erosion of connectivity ever since 2010 ”