The move by four of the five terminal operators at Hong Kong port to join forces faces a hurdle as the local Competition Commission has opened an investigation with shippers concerned the new alliance could operate like a cartel.
Earlier this week the main operators of what was once the world’s largest container port announced plans for a new Hong Kong Seaport joint operating alliance to manage and operate 23 berths across nine terminals at Kwai Tsing container terminals in Hong Kong.
The alliance features Hutchison’s Hongkong International Terminals (HIT) along with Modern Terminals, Cosco-HIT Terminals (Hong Kong) and Asia Container Terminals (ACT). Importantly, it does not include DP World, who has a berth at the port. There are fears that the other four operators will use the alliance to squeeze the Middle East operator from the port, a business tactic often adopted by Hong Kong’s top conglomerates when faced with overseas competition.
“Taking into account the changing dynamics of the shipping industry, in particular with the formation of strategic alliances between shipping lines and the growing use by lines of larger vessels, the trustee-manager is of the view that the Hong Kong Seaport Alliance will enable better utilisation of the existing capacity by increasing the flexibility in the overall berth and yard planning among the 23 berths to better accommodate the need of such shipping alliances,” Hutchison explained on the rationale for the new alliance earlier this week.