Strikes and demonstrations by dockworkers at the Port of Hong Kong have now entered their second week and vessel queues are continuing to lengthen, forcing the diversion of large volumes of container traffic away from the world’s third-busiest container port.
Forwarders are now reporting vessel delays of up to six days for ships calling at terminals operated by the target of the labor unrest — Hongkong International Terminals.
HIT, a subsidiary of Hutchison Port Holdings Trust, which operates five terminals at Hong Kong including Container Terminal 8 East, a joint venture with Cosco, would not comment on the extent of the service disruption.
Yet as the queue of vessels waiting to load and unload in the South China Sea is growing, forwarders are taking urgent steps to reroute cargo, either via ports in southern China or through facilities operated by HIT’s Hong Kong rivals.
A DHL spokesperson said the situation was highly fluid, with the length of delays unpredictable. The logistics giant is offering air freight and sea-air options to customers seeking a change of mode. “Also, for new, incoming ocean freight shipments, we are providing customers options to use carriers with alternative routings,” she said.
A spokesman for Kuehne + Nagel said the dispute is impacting yard operations and causing berth congestion at HIT and HIT-Cosco facilities, with resulting delays of two to four days.
The decline in yard productivity is also affecting truck turnaround times at HIT, according to Panalpina. “We are trying to shift bookings as much as possible to vessels berthing at terminals operated by DP World, River Trade Terminal or MTL,” said a spokesman. “In addition, we are encouraging customers to divert the cargo to other ports in South China such as Shenzhen, Guangzhou and Pearl River Delta ports.”
Jacques Chan, general manager for Hong Kong and South China at BDP International, told the JOC the strike is disrupting both import and export shipments. He reported berthing delays of up to six days at HIT.
“For import shipments, some carriers have decided to omit calling HIT,” he said. “They might berth at other terminals such as MTL, or they might call at Shenzhen ports — Yantian, Shekou, Chiwan — and transship the cargo back to Hong Kong port by feeder vessel to avoid HIT.
“For export shipments, BDP is striving to assist customers booking vessels which berth at other terminals not affected by the strike.”
David Skov, head of Maersk Line South China, said the carrier is so far seeing minimal impact as its mother vessel calls in Hong Kong are made at Modern Terminals Ltd. and not at HIT.
“We have some barge volume at HIT in Hong Kong that are handled with less productivity,” he said. “We will continue monitoring the situation as it develops and do everything we can to ensure that our customers’ cargoes can be delivered on time."
Gerry Yim Lui-fai, managing director of HIT, said his company is losing HK$5 million ($644,000) a day because of the strike and may face claims from shippers for delays.
HIT has refused to enter pay discussions with the striking dockers, many of which are employed by third parties to work at HIT. “HIT has a service contract with the contractors, who, in turn, have employment contracts with their workers,” a spokesperson told the JOC. “Salaries of the contractor-workers are directly negotiated between the workers and their employers.
“We will continue to urge our contractors to communicate with their employees.”
Chan said the Hong Kong Labour Department tried to mediate between unions and the contractors to discuss the dispute earlier today. “However, the meeting failed to materialize due to the absence of some contractors,” he added.
“It seems that the deadlock between the strikers and the contractors could last for some time, given the strikers are adamant to fight for the pay rise and the contractors are not reacting to their request.”
Contact Mike King at Michael@borderline.eu.com.