Market Overview

Hong Kong's First Quarter 2019 Box Volumes Plummet

Hong Kong's First Quarter 2019 Box Volumes Plummet


There has been a steep drop in the volume of box traffic handled at Hong Kong, one of the world's busiest box ports. Containerized throughput at Hong Kong took a dive in the first three months of 2019 when compared to the first quarter of 2018, according to preliminary figures from the Hong Kong Marine Department. Box traffic was down, on average, by 10.2 percent in the first quarter of 2019 compared to the first quarter of 2018.

Hong Kong (all box terminals) handled a total of 4.4 million twenty foot equivalent units (TEU) for the three months ending March 2019. However, the port handled more traffic in the prior corresponding period of 2018 when it had a throughput of 4.9 million TEU. Hong Kong handled a total of 19.6 million TEU during 2018. That data makes Hong Kong the world's seventh-busiest box port.

Containerized throughput was down each month in the first three months of 2019 compared to the previous year. In January Hong Kong handled 1.7 million TEU, down just over 8 percent compared to January 2018. Throughput of containers was down significantly in February 2019 – 19.6 percent – compared to February 2018. March 2019 was down by just under 3 percent compared with March 2018.

The effect of the Chinese lunar new year holidays in February can be seen in the detailed trade data that has been released for the last three years (data prior to 2017 is not available on a monthly basis). Throughput fell in February 2017, 2018 and 2019 and then picked up again each March.

The port of Hong Kong's main terminal for international cargo is the Kwai Tsing Container Terminals, which has nine terminals and 24 berths. The terminals have 99 quay cranes for the loading and discharge of cargo and they have a quay length of 7,694 meters (nearly 25,250 feet). There are five privately owned marine terminal operators –Hong Kong International Terminals, Modern Terminals, COSCO-HIT Terminals (Hong Kong), Asia Container Terminals and Goodman DP World. There is also a large river terminal.

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Looking at the Kwai Tsing terminals only (i.e. looking at primarily ocean-going cargo), there was a 3.5 million TEU throughput in the first quarter of 2019. That's an 8.9 percent decline compared with the corresponding period in 2018, which had a containerized throughput of just under 3.8 million TEU. The first quarter of 2017 saw just over 3.86 million TEU pass through the Kwai Tsing terminals. Given that the full 2017 calendar year figures stood at 16.23 million TEU and the 2018 full year figures were 15.47 million TEU, it would appear that Hong Kong is experiencing a medium-term decline in throughput volumes.

Hong Kong appears to have a balanced trade; the vast majority of boxes, on both the import and export trades, are full. That may be explained in part by trans-shipment volumes (boxes that are dropped off at the port by one vessel and a later loaded on another ship for onward transport).

Just over 87 percent of all boxes (both import and export) in the first quarter of 2019 were full boxes. There is little change on this point between the first quarter of 2019 and the first quarters of 2018 and 2017.

Hong Kong also detailed the empty/full split of the port's import and export box trade.

In 2019's first quarter there were 1.53 million full import boxes and 0.27 million empty import boxes, which is a ratio of six full boxes to each empty. On the export side there were 1.5 million TEU full export boxes and 0.17 million TEU empty export boxes. That's a full to empty box ratio of 9 to 1.

The volumes of full and empty boxes on both the import and export trades in the first three months of 2018 were similar to the current year but at a slightly lower volume. The ratios of full to empty boxes on both the import and export trades were identical.

To put all this Hong Kong throughput data into context, the busiest box port in the U.S. is the Port of Los Angeles with 9.5 million TEU in 2018. The immediately adjacent port of Long Beach recorded 8.01 million TEU, which means that the two Southern California ports together handled just over 17 million TEU.

However, comparing Los Angeles/Long Beach to Hong Kong doesn't really provide a full comparison because Hong Kong is just one of several ports in the local Pearl River Delta coastal city area. The others include Shenzhen and Guangzhou. The Hong Kong Marine Department estimates the full year 2018 TEU throughput of the three ports (Hong Kong, Shenzhen and Guangzhou) at about 67.24 million TEU. Those three ports serve the six-city urban agglomeration of Dongguan, Foshan, Guangzhou, Hong Kong, Jiangmen, Shenzhen and Zhongshan. Together the six cities have a population of more than 63.45 million.

Image sourced from Pixabay


Posted-In: Freight Freightwaves Hong KongEarnings News Global Markets General


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