In Shenzhen’s Yantian port, 400,000 containers are sitting empty, a volume that far exceeds the port’s designed capacity of 250,000 containers.
Across the border in Hong Kong, officials are looking for a place to house hundreds of thousands of empty containers expected to hit the city in the next few months, the South China Morning Post reported.
With the global financial crisis deepening and a crippled manufacturing sector, China’s port operations would have likely worsened this month.
Last month, container throughput in Shanghai, the world’s second-busiest container port, fell 15 % and that in Shenzhen fell 17.5 percent. The declines were the worst performance ever for the two ports.
In Hong Kong, container throughput fell 24.1% in December last year and 23.2% in January. Hong Kong’s container throughput since November last year has been the worst since the early 1990s.
Early this month, Hong Kong-based consultancy Transport Trackers lowered its forecasts for 2009, from a 9% drop to an 11% decline for the Asia-Europe container trade and from a 5% drop to a 9% fall for the transpacific container trade. It also lowered global container trade forecast this year from a 0.3 percent growth to a 0.8 percent decline.
CargoNews Asia reports that is worse than in 2001 when it declined 0.2% before rebounding 11.2% in 2002, the consultancy said.
The dismal prospects have become the basis of a potential price war among Chinese ports whose profits could shrink as much as 36% this year, with the exception of a 10% growth for Dalian port, according to a Citi research report this week.
Two leading Hong Kong-listed port operators, Cosco Pacific and China Merchants Holdings, will suffer a net profit drop of 27% and 25% respectively for this year, according to one industry analyst.
The analyst also said that Tianjin Port Development, the Hong Kong-listed operator of Tianjin port in northern China, will see net profit crash of 36% this year.
Shanghai International Port Group, the operator of Shanghai’s ports, was this month handling 30,000 boxes daily, compared with 100,000 previously.
Chiwan Wharf in western Shenzhen reported its daily container volume fell as low as 10,000 TEUs in the first two weeks of February against a peak of 20,000. In the north, Dalian and Tianjin ports’ container growth fell into negative territory in January.
Port operators in Hong Kong and Shenzhen now charge about US$0.13 to store one TEU per day, but charge around $13 for handling one TEU.
The drop in the charges, operators’ main revenue source, has forced operators to cut costs.
The Shenzhen Port Administration plans to lower costs, raise the quality of port management and offer incentives to shipping lines to stay.
For example, it recently asked the relevant government authorities to waive a fuel tax for Shenzhen port.