A global business

by Cindy Chan

Erik Bogh Christensen, chairman, Hong Kong Container Terminal Operators Association Limited

Despite an environment of both expansion and optimism logistics recruitment needs are not in parallel with industry growth in the port of Hong Kong

A free port with a favourable geographical location at the mouth of the Pearl River Delta, Hong Kong provides world-class port services for the container shipping industry and is capable of maintaining its leading position as the key container hub of the region.

In Hong Kong, most cargoes are handled at the Kwai Chung Container Port. In 2002, the port handled 13,910 vessel calls and enjoyed a total throughput of 11.89 million TEUs (a unit equivalent to 20 feet). From January to July this year, the port has already handled 6.8 million TEUs.

According to Erik Bogh Christensen, chairman of the Hong Kong Container Terminal Operators Association Limited (HKCTOA), the percentage increase in the number of containers handled in the Pearl River Delta in recent years has been double-digit. "A 10 percent GDP in Guangdong will translate into a growth of two million TEUs per year in this region," he says.

Established in 1999 by the four private terminal operators in the Kwai Chung Port, the HKCTOA has been promoting the port of Hong Kong as the key container hub in the region and making efforts to increase the port's competitiveness. In order to achieve these objectives, Mr Christensen says the association takes part in conferences and communicates with relevant departments of the HKSAR government and the Trade Development Council, giving advice and consultation regarding the industry.

Capital-intensive industry

Despite the optimistic industry outlook, recruitment needs are not growing in tandem with the business. Mr Christensen explains that the industry is not labour-intensive, as it relies greatly on capital investment. The industry involves high levels of technology and automation that require a large capital input and includes a port infrastructure which needs billions of dollars of investment.

Moreover, it is difficult for the association to provide employment figures, because some of the work is outsourced to sub-contractors. Mr Christensen, who is also managing director of Modern Terminals Limited, says that his company directly employs about 1,200 people and the Kwai Chung terminals give work to about 4,000 to 4,500 in total.

Although the industry is still expanding, Mr Christensen does not think it will have a big impact on employment because of its capital-intensive rather than labour-intensive nature.
Since some Hong Kong terminal operators have business connections with other ports in the Pearl River Delta and are engaging in port development projects there, it is, however, possible that Hong Kong employees will be stationed and work on the mainland, he says.

Courses in logistics are now available in both local institutions and universities and Mr Christensen says that graduates can join the industry as trainees. Areas in which they can participate include operations, project development and human resources. Graduates from other disciplines also have a chance to enter the industry, he notes.

In addition, Mr Christensen emphasises that there is still room for improvement. He notes that the construction of roads and bridges, not to mention soft infrastructure such as banking, insurance, customs and IT-related items, should be continuously improved.

The economic slowdown may have affected many other industries, but the logistics industry has not been seriously harmed because it is a global business with many different markets, notes Mr Christensen. He explains that, when big markets such as North America, the European Union and Japan are weak, there will still be business and trade with other countries such as Indonesia and Malaysia.

Hong Kong is facing competition from other ports in South China and may lose some market share. However, Mr Christensen is confident that Hong Kong's position will not be undermined, as the market is large.

Building the future

The building of a bridge linking Hong Kong to Zhuhai and Macau has attracted some negative comments, but it is Mr Christensen's belief that the bridge will bring more business opportunities, rather than threaten the leading position of the Hong Kong port.

The Container Terminal 9 project in Tsing Yi is also under way, improving the productivity and enhancing the efficiency of logistics services in Hong Kong. The new six-berth terminal is slated for completion in 2004 and is expected to handle an additional four million TEUs. Container Terminal 10, on the other hand, is not expected to be completed before 2010.

Meanwhile, the association will work closely with the government, the Hong Kong Logistics Development Council and the Steering Committee on Logistics Development to review regularly the growth of the industry and ascertain when new capacity will be needed.

Taken from Career Times 31 October 2003
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