HK, Singapore battle on as rival ports

HK, Singapore battle on as rival ports

SINGAPORE (AFP): Old rivals Hong Kong and Singapore will battle on to be the world's busiest port beyond the territory's handover to China next week, but both also have a fight on their hands from emerging competitors, analysts say.

Asia's two premier shipping hubs have for long been engaged in a ding-dong race to be the world's top container port, an honor Hong Kong snatched in 1992 and has held ever since, profiting from China's economic boom.

Last year, the Hong Kong port handled 13.41 million TEUs (twenty-foot equivalent units) and Singapore 12.94 million TEUs. The gap narrowed from 680, 000 TEUs in 1995.

"This big race for the most TEUs will continue. Old rivalries die hard," a shipping analyst with a Western investment house said here ahead of Hong Kong's July 1 transfer to China.

But more interesting for industry watchers would be how the two ports tackle emerging competition, the analyst said.

Richard Stokes, director of regional marine research at investment house WI Carr, said the establishment of direct shipping links between Taiwan and China starting in April posed a strong challenge to Hong Kong.

"That will have a more immediate medium-term influence on shipping channels," Stokes said, adding that the emergence of satellite ports in Singapore's neighborhood would also "make their influence felt" in time.

Despite fighting keenly for the position of the world's number one container port on the back of their strategic locations, Hong Kong and Singapore do not compete directly for the same cargo.

Hong Kong serves as the principal gateway for Chinese foreign trade, handling 30 percent by volume and 60 percent by value of the mainland's booming imports and exports which swelled to us$386 billion last year.

Singapore, sitting astride one of the world's busiest sea lanes, acts as the trading and distribution hub for fast- expanding Southeast Asia, linking the region to the rest of the world.

Hong Kong and Singapore may be in no immediate danger of losing their status as regional hub ports, but cargo-hungry competitors are building up their container handling capacity and are hot on their heels, analysts said.

"They will definitely remain as hub ports but their market share will decline," Andrew Penfold, director of the UK-based Ocean Shipping Consultants, told Singapore's Shipping Times here.

Asian economies have been pumping massive investments into port development in competition for rapidly growing cargo traffic while liners, shippers and manufacturers look for cheaper alternatives.

Hong Kong's strongest competition is seen to come from the Taiwanese port of Kaohsiung even as Taiwan and the mainland move to expand the limited shipping links they established in April.

China is developing several new ports, having spent more than eight billion dollars since 1985 on port and port-related infrastructure. Its container traffic is expected to grow to 10 million TEUs by 2005 from 4.5 million TEUs in 1996.

Shanghai has beefed up its port infrastructure and could become a container shipping hub in its own right, experts said.

In Singapore's neighborhood, Indonesia, the Philippines, Malaysia and Thailand are developing ports to attract transshipment traffic and help reduce their dependence on the city-state.