WASHINGTON: Port competition in Southern China for a share of the liner shipping business is fierce. Hong Kong and other south China ports compete not only among themselves, but also with northern rivals like Shanghai and Ningbo. Now with terminal overcapacity and a softening Chinese economy, that competition is destined to heat up even more.
Ports in Southern China compete fiercely for business – among themselves, with neighboring Hong Kong and with ports north, including giants Shanghai and Ningbo. This Southern China port system remains one of the most important in the world today. But competition is mounting and should only get worse as overcapacity collides with a softening Chinese economy, stagnant trade flow and migration of manufacturing inland. Tough times loom ahead.
Too many ports vying for less business is only part of the story, however. Port strength depends not only on the business itself, but as well on an ability to move goods to and from the terminals quickly, efficiently and, increasingly, over longer distances. While Shanghai, for one, is making some strides especially in terms of inland river transport and inland terminals, China as a whole lags way behind the US, Europe and many parts of Asia in terms of efficient and integrated intermodal transport. An unhealthy dependence on truck transport continues. Investment in better rail transport has been especially paltry. With the exception of ocean-to-highway linkages, modern intermodal facilities are surprisingly few and far between. Those that do exist are often poorly linked to the overall logistics system.
In Southern China, it’s especially complicated and troubling. Inland river transport has languished and rail never got off the ground. But because industry developed very close to the ports, trucks could handle container hauling. Now that a combination of government policy and economics is forcing more industry to migrate further inland, the problems of that unbalanced intermodal system are emerging.
When it comes to moving containers in South China, “the trucking industry has a stranglehold,” said Brian Slack, distinguished professor emeritus geography, planning and environment at Concordia University in Montreal. And as the infrastructure developed, “the configuration does not facilitate anything but truck.” But as manufacturing moves away from the Pearl River Delta, hauling containers by truck becomes increasingly difficult, more costly and less economic, Slack pointed out. “It’s a significant constraint on South China,” he said.