Sea Transport Industry in Hong Kong

Lawrence  -  01:34 PM
Overview
  • Endowed with a deep-water, silt-free natural harbour strategically located along a major sea route and with the Chinese mainland providing a huge cargo base, Hong Kong has become a sea transport hub in Asia.
  • Advanced port facilities and efficient port services are complemented by excellent trade, financial and other services which underpin Hong Kong's status as the 10th largest trading entity in the world. In 2011, 24.4% of Hong Kong total exports (by value) were transported by ocean.
  • Hong Kong Port was the world's third busiest container port in 2011, having handled 24.4 million TEUs, following Shanghai (31.7 million TEUs) and Singapore (29.4 million TEUs). In the first 2 months of 2012, Hong Kong’s seacargo throughput decreased 0.3% year-on-year (YoY) to 3.6 million TEUs.
  • Hong Kong's port is renowned for its efficiency. All container terminals are privately owned and operated. Productivity enhancement through new cargo management techniques has raised their handling efficiency.
Industry Data
Total port cargo throughput (In million tonnes)

2010

% of total

2011

% of total

Total

267.8

100%

277.4

100%

  Ocean-going

182.0

68.0%

194.9

70.3%

    Exports and imports

75.4

28.2%

77.5

27.9%

    Transhipments

106.6

39.8%

117.4

42.3%

  River trade

85.8

32.0%

82.5

29.7%

    Exports and imports

43.3

16.2%

40.9

14.7%

    Transhipments

42.6

15.9%

41.7

15.0%

Source: Hong Kong Shipping Statistics, Census and Statistics Department
Total container traffic (in million TEUs)

2010

2011

2012*

11/10 Change

Total

23.7

24.4

3.6

+2.9%

  Kwai Tsing Terminals

17.1

17.4

2.8

+1.9%

    Ocean vessel

14.4

15.1

..

+4.6%

    River cargo vessel

2.7

2.4

..

-12.8%

  Mid-stream operation and other berths

6.6

7.0

0.9

+5.5%

    Ocean vessel

1.8

2.3

0.2

+27.6%

    River cargo vessel

4.8

4.6

0.6

-3.0%

Source: Summary Statistics on Port Traffic in Hong Kong, Hong Kong Port and Maritime Board
*January - February
Range of Services
The sea transport sector is of vital importance in supporting Hong Kong's status as the world's 10th largest trading entity. During 2011, Hong Kong handled 277.4 million tonnes of seaborne and river cargoes, up 3.6%. 70.3% of seaborne cargoes were transported by ocean-going vessels. Of the seaborne cargoes handled in the aforesaid year, 117.4 million tonnes (42.3%) were transhipment cargo. The Chinese mainland was the biggest source and destination of Hong Kong's transhipment business.
Hong Kong handled 24.4 million TEUs of containers in 2011. Of the total, 71.4% were handled by container terminals at Kwai Tsing terminals, with the rest handled mid-stream by Hong Kong's mooring buoys and by river trade facilities. The moorings also handle most of Hong Kong's break bulk cargo. Bulk shipping takes care of bulky, unpacked goods such as oil, gas, grain, minerals and timber.
Liner shipping
Sea cargoes to and from Hong Kong are carried both by liners and bulk vessels. Liner shipping is operated under a scheduled timetable with pre-announced rates and destinations. Many key routes are under liner conferences (agreements by the main shipping lines on tariffs and sailings). Hong Kong is a major hub with more than 440 container liner services per week connecting to over 500 destinations worldwide.
The larger container lines have invested in advanced systems to provide cargo tracking information and improve efficiency. They often form alliances or merge with other transport providers to develop door-to-door multi-modal services. Many liners are also forming alliances amongst themselves to increase efficiency and reduce cost in a very competitive environment. Vessel sharing has enabled the liners to offer a more flexible service in terms of global coverage, higher frequency of departures and a greater choice of routes.
Port Facilities
Hong Kong's port facilities are financed, built, owned and operated by private firms.
Container Terminals
Hong Kong has nine existing container terminals with a total of 24 berths at Kwai Chung and Tsing Yi Island, operated by several private consortia. Through various productivity enhancement measures, their combined throughput capacity is some 20 million TEUs per year.
In view of the growth in container throughput, the government has launched the 10th terminal (which is proposed to be located in southwestern of Tsing Yi) feasibility study, with a decision expected by the end of 2012.
River Trade Terminal
The Pearl River links Hong Kong with many manufacturing centres in Southern China, which has become the main cargo base for the territory. River trade grew fast in the last two decades, rising from 9.3 million tonnes in 1990 to 82.5 million tonnes in 2011. To cater for increasing river trade, a dedicated terminal, the River Trade Terminal (RTT), was established in 1996 and  became operational in November 1998. RTT is located in the west of Tuen Mun.
Service Providers
Shipowners own ships to obtain an income. In the liner shipping market, ship owners can rent ships to a shipping line. In the bulk shipping market, ships can be rented on a time or voyage basis to a ship charterer or ship operator.
Hong Kong is a major ship owning and management centre. As in February 2012, there were 2,005 vessels (over 71 million gross registered tonnes) on the Hong Kong Shipping Register (HKSR), making HKSR to be the 4th largest shipping register in the world following Panama, Liberia and Marshall Island. According to the Hong Kong Shipowners Association, the total tonnages of ships owned or managed by its members exceed 114 million deadweight tones, over 9% of the world’s total fleets.
Shipping lines tend to own and/or lease a group of ships which they deploy on pre-determined liner routes. Ship operators rent ships from owners and use them to carry bulk cargoes from port to port. The aim of the operators is to reduce the number of wasted voyages and this requires careful selection of the ship, routes and cargo.
Shipping lines use shipping agents to sell their freight space in a particular port. The shipping broker acts to match the supply of bulk vessels from operators/owners with the demand for bulk cargo shipments by the charterers.
Employment & Establishment in 2010

Establishment (% changes)

Persons engaged (% changes)

Ship agents/managers and local representative offices of oversea shipping companies

245 (-1.6%)

7,653 (-1.4%)

Ship owners/operators of sea-going vessels

135 (+29.8%)

4,461 (+18.0%)

Container terminal and marine cargo terminal operators

7 (-)

3,583 (-1.1%)

Ship owners and operators of vessels moving between Hong Kong and the ports in Pearl River Delta

76 (+5.6%)

2,024 (+10.7%)

Inland water freight transport

149 (+0.7%)

 1,219 (+13.5%)

Mid-stream operation and container back-up activities

331 (-5.2%)

4,869 (+1.3%)

Air or sea cargo forwarding services

2,799 (+4.2%)

37,195 (+3.0%)

Source: Key Statistics on Business Performance and Operating Characteristics of the Transportation, Storage and Courier Services Sector in 2010, Census and Statistics Department
Business Receipts and Other Incomes of Selected Industry Groups (HK$ billion)

2009

2010

10/09 change

Ship agents/managers and local representative office of oversea shipping companies

5.2

5.9

+14.8%

Ship owners/operators of sea-going vessels

69.4

93.7

+35.0%

Container terminal and marine cargo terminal operators

8.7

9.5

-8.3%

Ship owners and operators of vessels moving between Hong Kong and the ports in Pearl River Delta

5.9

7.0

+19.0%

Inland water freight transport

0.7

1.4

+94.8%

Mid-stream operation and container back-up activities

4.4

4.7

+6.7%

Air or sea cargo forwarding services

116.2

149.8

+28.9%

Source: Key Statistics on Business Performance and Operating Characteristics of the Transportation, Storage and Courier Services Sector in 2010, Census and Statistics Department
Exports
Hong Kong earned HK$128.4 billion from exporting sea transport services in 2010 (accounting for 15.6% of total service exports in 2010), up 27.6% from 2009. Unlike air transport, passenger revenue constituted an insignificant part of the exports of sea transport services.
(HK$ billion)

2008

2009

2010

10/09 Change

Exports of Sea Transport Services

123.2

100.6

128.4

+27.6%

Passenger

1.5

1.1

1.5

+34.3%

Freight

77.1

58.6

78.3

+33.6%

Ship Chartering

7.1

4.2

4.1

-4.3%

Others*

37.5

36.6

44.6

+21.7%

Share of total services exports

17.2

15.0

15.6

+0.6%

Sources: Report on Hong Kong Trade in Services Statistics for 2010, Census and Statistics Department
* “Others” include: Supporting and auxiliary services to water transport (e.g. container terminal services; ship broking, surveying, consulting, repair and maintenance services; chandling; stevedoring services; cargo inspection, sampling and weighing services; port and waterway operation services; towing and pushing services; pilotage and berthing services; vessel salvage services; and other water transport supporting and auxiliary services).
Major Export Markets of Sea Transportation Services 2008-2010 (HK$ billion)

2008

2009

2010

Value

Share (%)

Value

Share (%)

Value

Share (%)

Asia

58.9

47.9%

50.7

50.4%

65.4

50.9%

North America

28.6

23.2%

21.4

21.3%

28.3

22.0%

Western Europe

23.3

18.9%

17.3

17.2%

24.0

18.7%

Sources: Report on Hong Kong Trade in Services Statistics for 2010, Census and Statistics Department
An increasing number of countries are seeking to privatise their port operation and/or develop new ports to be run on a commercial basis. An exportable sea transport service from Hong Kong is thus the development and management of ports on the Chinese mainland and the wider region. Hong Kong port operators are already active in this field. Modern Terminals, a Hong Kong terminal operator, invest and operate several container terminals in Shenzhen, and has expanded its business to the Yangtze River Delta since 2004. Hutchison Port Holdings (HPH) Group, another Hong Kong terminal operator, has a network of operations that comprises 315 berths in 52 ports around the world, handling 75 million TEUs worldwide in 2010.
Recent Developments and Market Outlook
  • South China ports have been developing quickly in the past years. As at 2011, Shenzhen was the world’s fourth busiest port, handling 22.6 million TEUs (up 0.3%), whilst Guangzhou remained to be the seventh, handling 14.4 million TEUs in 2011 (up 14.7%). Shanghai was the busiest seaport on the Chinese mainland in 2011, handling 31.7 million TEUs.
  • On 15 December 2008, “Three links” (meaning direct transportation, postal, and trade links between the Chinese mainland and Taiwan) was officially restored after almost 60 years. The mainland has opened 63 seaports, including Tianjin, Shanghai, Guangzhou, Shekou (Shenzhen), Yantian (Shenzhen), and Taiwan opened 11, such as Taichung, Kaohsiung, and Keelung for direct transportation.
  • The Hong Kong-Zhuhai-Macau Bridge (HKZMB), a large-scale cross-border infrastructure linking the three places, is expected to be completed in 2016. Cargo movement between Hong Kong and western Pearl River Delta will be further enhanced.
  • In order to enhance land connectivity with the mainland, several measures have been adopted, including simplifying cross-border procedures, providing "one-stop" kiosks for immigration and customs clearance and expanding capacity at border-crossing points.
  • In view of long-term trade growth within the region, the Hong Kong government is now conducting a feasibility study to build a container terminal 10 in southwestern Tsing Yi, with the decision expected by the end of 2012.
  • Under the "Green Lane" scheme, which came into effect in May of 2006, licensed carriers can load up goods from the shippers and drive to a nearby "freight village" or "duty-free depot" to carry out the customs clearance process. The goods needed not be re-opened or rechecked in Hong Kong.
  • According to the Framework Agreement on Hong Kong/Guangdong Co-operation signed on April 2010, Hong Kong is positioned as an international shipping centre while Shenzhen and Guangzhou will remain as a hub within the region.
  • 17 Hong Kong major freight liners have signed up the Fair Wind Charters (FWC), a voluntary commitment to switch from high-sulphur bunker oil to 0.5% sulphur diesel when berthing in Hong Kong, with an aim to cut emissions of air pollutants near the port areas. FWC is the first of its kind in Asia.
The Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Chinese mainland
According to China's WTO commitment and the Regulations on the Administration of Foreign Investment in International Marine Shipping (issued by MOFCOM and became effective in June 2004), foreign joint-ventures are allowed to provide the following services:
  • Maritime cargo-handling services
  • Customs clearance services for maritime transport
  • Container station and depot services
  • International shipping
  • International shipping agency
  • International ship management
  • International marine shipping freight loading and unloading
  • International marine shipping container terminal and yard business
The shareholding of foreign investors should not exceed 49%.
By contrast, the CEPA provisions allow Hong Kong services suppliers (HKSS) to have greater flexibility to access the market, as they are allowed to form wholly owned units in providing certain types of maritime services, including:
  • International ship management services
  • Containers station and depot services
  • Non-vessel operating common carrying services
  • Port cargo loading and unloading services
  • Ship survey services for ships registered in Hong Kong
  • International ocean container leasing, buying and selling as well as trading of container parts
  • Ship maintenance and repair services; and for tugs that they operate between Hong Kong and mainland ports
  • Regular business services such as shipping undertaking, issuance of bills of lading, settlement of freight rates and signing of service contracts
For a Hong Kong company providing maritime transport services, 50% or more of the ships owned by it, calculated in terms of tonnage, should be registered in Hong Kong.#
HKSS can set up joint venture enterprises on the mainland to provide third-party international shipping agency services. The shareholding of Hong Kong service suppliers should not exceed 51%. This lowers the barrier of the third-party international shipping agency services for Hong Kong service suppliers, as compared to other foreign joint-ventures outside CEPA.
Business scope has been further expanded for HKSS since January 2009, as they are allowed to set up wholly owned enterprises and branches in Guangdong on a pilot basis to provide shipping agency services to vessel operators for routes between Guangdong Province and Hong Kong and Macau.
Under CEPA Supplement VI, HKSS can set up wholly owned shipping companies in the Mainland, providing regular business services (shipping undertaking, issuance of bills of lading and settlement of freight rates, etc.) for shipping transport between Hong Kong and the Class B ports in Guangdong, operated by HKSS using chartered Mainland vessels. ________________________________________# The requirement that "50%, or more of the ships owned by it, calculated in terms of tonnage, should be registered in Hong Kong" as set out in Annex 5 of the CEPA legal text (see www.tid.gov.hk for further details), is not applicable to HKSS which provide towing services.
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Overview
  • Endowed with a deep-water, silt-free natural harbour strategically located along a major sea route and with the Chinese mainland providing a huge cargo base, Hong Kong has become a sea transport hub in Asia.
  • Advanced port facilities and efficient port services are complemented by excellent trade, financial and other services which underpin Hong Kong’s status as the 10th largest trading entity in the world. In 2011, 24.4% of Hong Kong total exports (by value) were transported by ocean.
  • Hong Kong Port was the world’s third busiest container port in 2011, having handled 24.4 million TEUs, following Shanghai (31.7 million TEUs) and Singapore (29.4 million TEUs). In the first 2 months of 2012, Hong Kong’s seacargo throughput decreased 0.3% year-on-year (YoY) to 3.6 million TEUs.
  • Hong Kong’s port is renowned for its efficiency. All container terminals are privately owned and operated. Productivity enhancement through new cargo management techniques has raised their handling efficiency.
Industry Data
Total port cargo throughput (In million tonnes)

2010

% of total

2011

% of total

Total

267.8

100%

277.4

100%

  Ocean-going

182.0

68.0%

194.9

70.3%

    Exports and imports

75.4

28.2%

77.5

27.9%

    Transhipments

106.6

39.8%

117.4

42.3%

  River trade

85.8

32.0%

82.5

29.7%

    Exports and imports

43.3

16.2%

40.9

14.7%

    Transhipments

42.6

15.9%

41.7

15.0%

Source: Hong Kong Shipping Statistics, Census and Statistics Department

Total container traffic (in million TEUs)

2010

2011

2012*

11/10 Change

Total

23.7

24.4

3.6

+2.9%

  Kwai Tsing Terminals

17.1

17.4

2.8

+1.9%

    Ocean vessel

14.4

15.1

..

+4.6%

    River cargo vessel

2.7

2.4

..

-12.8%

  Mid-stream operation and other berths

6.6

7.0

0.9

+5.5%

    Ocean vessel

1.8

2.3

0.2

+27.6%

    River cargo vessel

4.8

4.6

0.6

-3.0%

Source: Summary Statistics on Port Traffic in Hong Kong, Hong Kong Port and Maritime Board

*January – February
Range of Services
The sea transport sector is of vital importance in supporting Hong Kong’s status as the world’s 10th largest trading entity. During 2011, Hong Kong handled 277.4 million tonnes of seaborne and river cargoes, up 3.6%. 70.3% of seaborne cargoes were transported by ocean-going vessels. Of the seaborne cargoes handled in the aforesaid year, 117.4 million tonnes (42.3%) were transhipment cargo. The Chinese mainland was the biggest source and destination of Hong Kong’s transhipment business.
Hong Kong handled 24.4 million TEUs of containers in 2011. Of the total, 71.4% were handled by container terminals at Kwai Tsing terminals, with the rest handled mid-stream by Hong Kong’s mooring buoys and by river trade facilities. The moorings also handle most of Hong Kong’s break bulk cargo. Bulk shipping takes care of bulky, unpacked goods such as oil, gas, grain, minerals and timber.
Liner shipping
Sea cargoes to and from Hong Kong are carried both by liners and bulk vessels. Liner shipping is operated under a scheduled timetable with pre-announced rates and destinations. Many key routes are under liner conferences (agreements by the main shipping lines on tariffs and sailings). Hong Kong is a major hub with more than 440 container liner services per week connecting to over 500 destinations worldwide.
The larger container lines have invested in advanced systems to provide cargo tracking information and improve efficiency. They often form alliances or merge with other transport providers to develop door-to-door multi-modal services. Many liners are also forming alliances amongst themselves to increase efficiency and reduce cost in a very competitive environment. Vessel sharing has enabled the liners to offer a more flexible service in terms of global coverage, higher frequency of departures and a greater choice of routes.
Port Facilities
Hong Kong’s port facilities are financed, built, owned and operated by private firms.
Container Terminals
Hong Kong has nine existing container terminals with a total of 24 berths at Kwai Chung and Tsing Yi Island, operated by several private consortia. Through various productivity enhancement measures, their combined throughput capacity is some 20 million TEUs per year.
In view of the growth in container throughput, the government has launched the 10th terminal (which is proposed to be located in southwestern of Tsing Yi) feasibility study, with a decision expected by the end of 2012.
River Trade Terminal
The Pearl River links Hong Kong with many manufacturing centres in Southern China, which has become the main cargo base for the territory. River trade grew fast in the last two decades, rising from 9.3 million tonnes in 1990 to 82.5 million tonnes in 2011. To cater for increasing river trade, a dedicated terminal, the River Trade Terminal (RTT), was established in 1996 and  became operational in November 1998. RTT is located in the west of Tuen Mun.
Service Providers
Shipowners own ships to obtain an income. In the liner shipping market, ship owners can rent ships to a shipping line. In the bulk shipping market, ships can be rented on a time or voyage basis to a ship charterer or ship operator.
Hong Kong is a major ship owning and management centre. As in February 2012, there were 2,005 vessels (over 71 million gross registered tonnes) on the Hong Kong Shipping Register (HKSR), making HKSR to be the 4th largest shipping register in the world following Panama, Liberia and Marshall Island. According to the Hong Kong Shipowners Association, the total tonnages of ships owned or managed by its members exceed 114 million deadweight tones, over 9% of the world’s total fleets.
Shipping lines tend to own and/or lease a group of ships which they deploy on pre-determined liner routes. Ship operators rent ships from owners and use them to carry bulk cargoes from port to port. The aim of the operators is to reduce the number of wasted voyages and this requires careful selection of the ship, routes and cargo.
Shipping lines use shipping agents to sell their freight space in a particular port. The shipping broker acts to match the supply of bulk vessels from operators/owners with the demand for bulk cargo shipments by the charterers.
Employment & Establishment in 2010

Establishment
(% changes)

Persons engaged
(% changes)

Ship agents/managers and local representative offices of oversea shipping companies

245
(-1.6%)

7,653
(-1.4%)

Ship owners/operators of sea-going vessels

135
(+29.8%)

4,461
(+18.0%)

Container terminal and marine cargo terminal operators

7
(-)

3,583
(-1.1%)

Ship owners and operators of vessels moving between Hong Kong and the ports in Pearl River Delta

76
(+5.6%)

2,024
(+10.7%)

Inland water freight transport

149
(+0.7%)

 1,219
(+13.5%)

Mid-stream operation and container back-up activities

331
(-5.2%)

4,869
(+1.3%)

Air or sea cargo forwarding services

2,799
(+4.2%)

37,195
(+3.0%)

Source: Key Statistics on Business Performance and Operating Characteristics of the Transportation, Storage and
Courier Services Sector in 2010, Census and Statistics Department

Business Receipts and Other Incomes of Selected Industry Groups (HK$ billion)

2009

2010

10/09 change

Ship agents/managers and local representative office of oversea shipping companies

5.2

5.9

+14.8%

Ship owners/operators of sea-going vessels

69.4

93.7

+35.0%

Container terminal and marine cargo terminal operators

8.7

9.5

-8.3%

Ship owners and operators of vessels moving between Hong Kong and the ports in Pearl River Delta

5.9

7.0

+19.0%

Inland water freight transport

0.7

1.4

+94.8%

Mid-stream operation and container back-up activities

4.4

4.7

+6.7%

Air or sea cargo forwarding services

116.2

149.8

+28.9%

Source: Key Statistics on Business Performance and Operating Characteristics of the Transportation, Storage and
Courier Services Sector in 2010, Census and Statistics Department

Exports
Hong Kong earned HK$128.4 billion from exporting sea transport services in 2010 (accounting for 15.6% of total service exports in 2010), up 27.6% from 2009. Unlike air transport, passenger revenue constituted an insignificant part of the exports of sea transport services.
(HK$ billion)

2008

2009

2010

10/09 Change

Exports of Sea Transport Services

123.2

100.6

128.4

+27.6%

Passenger

1.5

1.1

1.5

+34.3%

Freight

77.1

58.6

78.3

+33.6%

Ship Chartering

7.1

4.2

4.1

-4.3%

Others*

37.5

36.6

44.6

+21.7%

Share of total services exports

17.2

15.0

15.6

+0.6%

Sources: Report on Hong Kong Trade in Services Statistics for 2010, Census and Statistics Department

* “Others” include: Supporting and auxiliary services to water transport (e.g. container terminal services; ship broking, surveying, consulting, repair and maintenance services; chandling; stevedoring services; cargo inspection, sampling and weighing services; port and waterway operation services; towing and pushing services; pilotage and berthing services; vessel salvage services; and other water transport supporting and auxiliary services).
Major Export Markets of Sea Transportation Services 2008-2010 (HK$ billion)

2008

2009

2010

Value

Share (%)

Value

Share (%)

Value

Share (%)

Asia

58.9

47.9%

50.7

50.4%

65.4

50.9%

North America

28.6

23.2%

21.4

21.3%

28.3

22.0%

Western Europe

23.3

18.9%

17.3

17.2%

24.0

18.7%

Sources: Report on Hong Kong Trade in Services Statistics for 2010, Census and Statistics Department

An increasing number of countries are seeking to privatise their port operation and/or develop new ports to be run on a commercial basis. An exportable sea transport service from Hong Kong is thus the development and management of ports on the Chinese mainland and the wider region. Hong Kong port operators are already active in this field. Modern Terminals, a Hong Kong terminal operator, invest and operate several container terminals in Shenzhen, and has expanded its business to the Yangtze River Delta since 2004. Hutchison Port Holdings (HPH) Group, another Hong Kong terminal operator, has a network of operations that comprises 315 berths in 52 ports around the world, handling 75 million TEUs worldwide in 2010.
Recent Developments and Market Outlook
  • South China ports have been developing quickly in the past years. As at 2011, Shenzhen was the world’s fourth busiest port, handling 22.6 million TEUs (up 0.3%), whilst Guangzhou remained to be the seventh, handling 14.4 million TEUs in 2011 (up 14.7%). Shanghai was the busiest seaport on the Chinese mainland in 2011, handling 31.7 million TEUs.
  • On 15 December 2008, “Three links” (meaning direct transportation, postal, and trade links between the Chinese mainland and Taiwan) was officially restored after almost 60 years. The mainland has opened 63 seaports, including Tianjin, Shanghai, Guangzhou, Shekou (Shenzhen), Yantian (Shenzhen), and Taiwan opened 11, such as Taichung, Kaohsiung, and Keelung for direct transportation.
  • The Hong Kong-Zhuhai-Macau Bridge (HKZMB), a large-scale cross-border infrastructure linking the three places, is expected to be completed in 2016. Cargo movement between Hong Kong and western Pearl River Delta will be further enhanced.
  • In order to enhance land connectivity with the mainland, several measures have been adopted, including simplifying cross-border procedures, providing “one-stop” kiosks for immigration and customs clearance and expanding capacity at border-crossing points.
  • In view of long-term trade growth within the region, the Hong Kong government is now conducting a feasibility study to build a container terminal 10 in southwestern Tsing Yi, with the decision expected by the end of 2012.
  • Under the “Green Lane” scheme, which came into effect in May of 2006, licensed carriers can load up goods from the shippers and drive to a nearby “freight village” or “duty-free depot” to carry out the customs clearance process. The goods needed not be re-opened or rechecked in Hong Kong.
  • According to the Framework Agreement on Hong Kong/Guangdong Co-operation signed on April 2010, Hong Kong is positioned as an international shipping centre while Shenzhen and Guangzhou will remain as a hub within the region.
  • 17 Hong Kong major freight liners have signed up the Fair Wind Charters (FWC), a voluntary commitment to switch from high-sulphur bunker oil to 0.5% sulphur diesel when berthing in Hong Kong, with an aim to cut emissions of air pollutants near the port areas. FWC is the first of its kind in Asia.
The Closer Economic Partnership Arrangement (CEPA) between Hong Kong and the Chinese mainland
According to China’s WTO commitment and the Regulations on the Administration of Foreign Investment in International Marine Shipping (issued by MOFCOM and became effective in June 2004), foreign joint-ventures are allowed to provide the following services:
  • Maritime cargo-handling services
  • Customs clearance services for maritime transport
  • Container station and depot services
  • International shipping
  • International shipping agency
  • International ship management
  • International marine shipping freight loading and unloading
  • International marine shipping container terminal and yard business
The shareholding of foreign investors should not exceed 49%.

By contrast, the CEPA provisions allow Hong Kong services suppliers (HKSS) to have greater flexibility to access the market, as they are allowed to form wholly owned units in providing certain types of maritime services, including:

  • International ship management services
  • Containers station and depot services
  • Non-vessel operating common carrying services
  • Port cargo loading and unloading services
  • Ship survey services for ships registered in Hong Kong
  • International ocean container leasing, buying and selling as well as trading of container parts
  • Ship maintenance and repair services; and for tugs that they operate between Hong Kong and mainland ports
  • Regular business services such as shipping undertaking, issuance of bills of lading, settlement of freight rates and signing of service contracts
For a Hong Kong company providing maritime transport services, 50% or more of the ships owned by it, calculated in terms of tonnage, should be registered in Hong Kong.#
HKSS can set up joint venture enterprises on the mainland to provide third-party international shipping agency services. The shareholding of Hong Kong service suppliers should not exceed 51%. This lowers the barrier of the third-party international shipping agency services for Hong Kong service suppliers, as compared to other foreign joint-ventures outside CEPA.
Business scope has been further expanded for HKSS since January 2009, as they are allowed to set up wholly owned enterprises and branches in Guangdong on a pilot basis to provide shipping agency services to vessel operators for routes between Guangdong Province and Hong Kong and Macau.
Under CEPA Supplement VI, HKSS can set up wholly owned shipping companies in the Mainland, providing regular business services (shipping undertaking, issuance of bills of lading and settlement of freight rates, etc.) for shipping transport between Hong Kong and the Class B ports in Guangdong, operated by HKSS using chartered Mainland vessels.
________________________________________# The requirement that “50%, or more of the ships owned by it, calculated in terms of tonnage, should be registered in Hong Kong” as set out in Annex 5 of the CEPA legal text (see www.tid.gov.hk for further details), is not applicable to HKSS which provide towing services.

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