Thursday , 20 June 2019
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Competition Commission investigates Hong Kong Seaport Alliance
The alliance covers 23 berths at the Port of Hong Kong

Competition Commission investigates Hong Kong Seaport Alliance

The Hong Kong Competition Commission has launched an open investigation into the newly formed Hong Kong Seaport Alliance – a joint operating agreement between four terminals at the port.

The members of the alliance include Hongkong International Terminals Limited (HIT), Modern Terminals Limited, COSCO-HIT Terminals (Hong Kong) Limited, and Asia Container Terminals Limited (ACT).

The agreement is designed to deliver more efficient service offerings to carriers that call Hong Kong, while enhancing the overall competitiveness of the Port of Hong Kong across the region.

However, the Competition Commission is investigating whether the agreement may breach the first conduct rule of the competition ordinance by preventing, restricting or distorting competition in Hong Kong and it is being treated as a priority.

The Seaport Alliance covers a total of 23 berths and the planning for which is conducted by an operations coordination team using a common terminal operating system (TOS).

Only one berth at the Port of Hong Kong is not operated by the alliance – this is run by DP World.

The four companies plan to commence the joint operations of the Seaport Alliance progressively within 2019.

Gerry Yim, managing director of HIT, said: “The formation of the Seaport Alliance will further enhance efficiencies, increase utilisation and improve our overall service offering to customers.

“The Seaport Alliance 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.”

This collaboration is in direct response to a rapidly changing business environment, including the formation of new carrier alliances, carrier industry consolidation, and the dramatic increase in vessel size over the last few years.

Peter Levesque, group managing director of Modern Terminals Limited, said: “The Seaport Alliance will improve the value proposition of Hong Kong to customers, while reducing emissions and enabling Hong Kong to more effectively compete within the region.”

He added that the alliance combined with the application of new technologies will enable Hong Kong to thrive as an international shipping hub for years to come.

The port and logistics sector accounts for 3.2% of the GDP of Hong Kong, and provides more than 174,000 industry related jobs.

Hanliang Zhu, managing director of ACT, said: “By achieving additional efficiencies through optimised use of terminal assets, the Port of Hong Kong will continue to be a reliable transhipment hub in the region and a key gateway to China.”