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Hutchison Port predicts more mega ships calling at Shenzhen hub
[HONG KONG] Billionaire Li Ka-Shing's Hutchison Port Holdings Trust predicts more mega ships will call at its Shenzhen port to move cargo from the key Chinese export manufacturing region.
Its Shenzhen facility, in Yantian, opened a new berth this year and another will begin operating in the second half to handle these big ships, Gerry Yim, chief executive officer of the Singapore-based company, said Monday. Hutchison Port also is seeing more container barges moving from other parts of the Pearl River Delta to Shenzhen to be loaded onto ships for export.
The Yantian terminal moves about 70 per cent and 65 per cent of the Shenzhen area's exports to the US and Europe respectively, the CEO said, making it the largest port facility in the southern Chinese province. The growth at Shenzhen, accounting for more than half of Hutchison Port's revenue, may eat into some volume at the company's Hong Kong terminal, which is seeing a drop in the cargo it handles as transshipments decline.
Shenzhen "is important for China's exports," Mr Yim said at a briefing in Singapore.
Hong Kong, once the world's busiest container port, has lost volumes to its neighbors in the last two decades and has fallen in global rankings to fourth place after Shanghai, Singapore and Shenzhen.
Expansions by mainland Chinese ports and more shipping lines making direct port calls have hit the company's Hong Kong port volumes, which are largely transshipments.
Hutchison Port Holdings Trust operates container terminals in Hong Kong and Shenzhen, as well as river terminals in Guangdong. Hutchison Port Holdings Ltd. runs facilities controlled by Li elsewhere, including Rotterdam, Sydney, South Korea's Busan and other Chinese cities.
Li's CK Hutchison Holdings Ltd owns 30.07 per cent of Hutchison Port Holdings Trust through its subsidiaries including Hutchison Port Group Holdings Ltd, according to the annual report of the Singapore-based company. Temasek Holdings Pte holds 11.04 per cent via subsidiaries and associated companies, such as PSA International Pte.
Worldwide, the number of mega ships will probably to increase to 250 in two years' time from 150 at present, Mr Yim said.
The global shipping industry's restructuring - which has seen the combination of China Ocean Shipping Group and China Shipping Group as well as CMA CGM SA's takeover of Singapore's Neptune Orient Lines Ltd - will affect transshipments in Hong Kong, Mr Yim said. Changes to alliances among shipping operators worldwide also will have an impact, he said.
The company increased tariffs at its Hong Kong terminal by 3 per cent to 5 per cent last year for about half of its customers, and will discuss a rate increase with the others, chief financial officer Ivor Chow said at the briefing.
Hutchison Port Holdings Trust handled a combined 12.2 million 20-foot boxes at its container port terminals in Hong Kong and Shenzhen last year, 1 per cent less than in 2014.
The company posted a net income of HK$3.04 billion (S$532 million) in 2015, compared with a loss of HK$16 billion a year earlier when it recognised a one-time impairment related to a labor strike in Hong Kong. It's scheduled to report first- quarter results after the Singapore market's close Monday.