COSCO Shipping Ports Limited (Cosco) and Hutchison Port Holdings Trust (HPHT) announced on Monday, 19th of December, of an agreement to jointly manage 3 terminal operating companies in the port of Hong Kong.
The agreement concerns COSCO-HIT Terminals (Hong Kong) Limited (CHT), which is held 50/50 by Cosco and HPHT through intermediary companies and owns 2 berths in Terminal 8 East; Asia Container Terminals Limited (ACT), which owns 2 berths in Terminal 8 West and is held again by Cosco (60%) and HPHT (40%); and Hongkong International Terminals Limited (HIT), a wholly-owned subsidiary of HPHT, owning 12 berths in Terminals 4, 6, 7 and 9. In total, the companies will collaborate for the efficient co-management and operation of the 16 berths across Terminals 4, 6, 7, 8 and 9 of Kwai Tsing, New Territories, Hong Kong.
The companies believe that the move will enable to deploy the terminals’ facilities and human resources in a more cost effective manner. There will be a single management team responsible for the day-to-day operations and conducting the business of the combined terminals, which will help improve operating efficiencies.
The revenue and expenses from the management and operation of the combined facilities will be allocated among the two owners in accordance with the respective designed capacity of the facilities.
Zhang Wei, Cosco Vice Chairman and Managing Director, said in the company statement: “Taking into account the changing dynamics of the shipping industry with the formation of strategic alliances between shipping lines, the company is of the view that the arrangement would create additional capacity by increasing the flexibility in the overall berth and yard planning among the 16 berths across the combined terminals to better accommodate the need of such shipping alliances for enhanced service, thereby increasing the overall competitiveness of the Combined Terminals.”
The container throughput of Hong Kong has been growing for the last 4 months, following 25 months of a constant decrease. In November, 2016 the port handled 1.76 mln TEU (+10.1% y-o-y), particularly Kwai Tsing’s volume was 1.37 mln TEU (+10.3% y-o-y).