Hong Kong Seaport Alliance offers remedy to address competition concerns

Long plagued by monopoly accusations, the Hong Kong Seaport Alliance, formed by four of the five container port operators at Kwai Tsing Container Terminals, has released a list of proposed remedies in order to address concerns raised by Hong Kong’s competition authority.

Hong Kong’s Competition Commission started an investigation into the alliance jointly set up by Hongkong International Terminals (HIT), Cosco-HIT Terminals, Asia Container Terminals and Modern Terminals, with a focus on whether the alliance may harm competition in Hong Kong.

The commission has found that the alliance is not likely to give rise to competition concerns in the international transhipment and barge transhipment markets but likely in the gateway market where the parties have a very high combined market share and where there currently is a lack of significant alternative service suppliers.

In response to the commission’s investigation, the alliance has proposed a number of commitments with the most essential ones being capping their charges for gateway cargo related services.

The proposed commitments would last for up to eight years.

“The commission considers that the proposed commitments are appropriate to address its concerns, and it therefore proposes to accept them,” the Competition Commission said, adding that it will make a final decision by August 26.

The alliance operates 23 berths across eight terminals at the Kwai Tsing port, leaving the sole remaining operator, DP World, to operate one berth at Terminal 3.