18th April 2019
The Hong Kong Seaport Alliance (The Seaport Alliance) is a contractual agreement between Hongkong International Terminals Limited (HIT), COSCO-HIT Terminals (Hong Kong) Limited (COSCO-HIT), Asia Container Terminals Limited (ACT) and Modern Terminals Limited (MTL) to collaborate on operations at Kwai Tsing to improve the value proposition of the combined facilities in the context of growing regional competition, maximise efficiencies, optimise utilisation and cost synergies and to reduce environmental impact. The operators will cooperate on operational aspects and make their activities in Kwai Tsing terminal-neutral. The forming of the Seaport Alliance is a forward-looking and decisive response to the complex challenges faced by the Port of Hong Kong.
With growing regional competition and a fast-changing global shipping industry, the Seaport Alliance will enable members to deploy the facilities and resources in a more cost-effective and efficient way. The berths will be operated under a single terminal operating system and a single customer-terminal interface platform.
The Seaport Alliance firmly believes that the co-operative endeavour will deliver sustainable benefits to terminal operators, shipping lines, shippers, related businesses, industry workers, and Hong Kong as a whole. The Seaport Alliance aims to commence joint operations progressively from 2019 and is estimated to complete in approximately 18 months.
The success of notable container terminal collaborations overseas has inspired Hong Kong terminal operators to work together. For instance, the operations of Ningbo, Zhoushan and nearby ports came under a common platform in 2015, bringing synergies to the ports in Zhejiang.
Similarly, the Seattle and Tacoma ports formed the Northwest Seaport Alliance in 2014, which has since offered better rates and services to customers. By rethinking traditional operating model of container terminals in Hong Kong, the Seaport Alliance will ensure that the Port of Hong Kong stays vibrant and continues to be a reliable transshipment hub in the region, as well as a key gateway to China.
Furthermore, efficiency gains will be reaped from the enhanced flexibility to berthing locations, more nimble yard planning, improved turnaround time of vessels, and fewer inter-terminal trucking trips. The cost synergies achieved will enable all parties involved to be more competitive against other ports in the region.
In meeting the maritime industry challenges of the day, opportunities have emerged for Hong Kong to find strength in imagination, enterprise and versatility. The Seaport Alliance is a resolute and strategic answer to the demands of a new era.
Gerry Yim, Managing Director of Hongkong International Terminals Limited, said, “The formation of the Hong Kong Seaport Alliance will further enhance efficiencies, increase utilisation and improve our overall service offering to customers. It will ensure that the Port of Hong Kong remains a valuable contributor to our economy, both as an employer and as a facilitator of global trade.”
Lawrence Shum, Managing Director of COSCO-HIT Terminals (Hong Kong) Limited, said, “The maritime and port industry significantly drives trade and logistics business which are one of the four economic pillars of Hong Kong. We will work together to enhance the position of Hong Kong as an international shipping centre.”
Hanliang Zhu, Managing Director of Asia Container Terminals Limited said, “With the many advantages generated by the Hong Kong Seaport Alliance, we are confident that our terminals can attract more mega vessels to make Hong Kong their port of call. Indeed, the fact that COSCO SHIPPING PISCES, which is the world’s largest container vessel of its class, called at Hong Kong on her recent maiden voyage bodes well for the vibrant development of the Alliance.”
Peter Levesque, Group Managing Director of Modern Terminals Limited, said, “The Alliance will improve the value proposition of Hong Kong port to customers, while reducing emissions and enabling Hong Kong to more effectively compete within the region.”