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18-Jun-04 Cargo flow decision makers, terminal operators and industry experts agree that more bulk shipments will go through Shenzhen's ports in the future, while Hong Kong’s port will be used increasingly for priority and specialized goods, says business intelligence consultancy Fusion Consulting in a new report on the Pearl River Delta. The report, based on Fusion Consulting’s executive interviews with over 85 consignees, buying offices, manufacturers and exporters, shows that almost all industry participants expect more shipments to go through Shenzhen rather than Hong Kong, with cost as the key driver influencing their choice of ports. However, Hong Kong high-end shipments will continue to increase as its ports’ modern facilities offer better capacity for refrigeration, speed and high technology. Hong Kong is also expected to benefit from the boom in South China trade when the HK-Macau-Zhuhai bridge is operational, especially if trucking tariffs become more competitive. 88% of the executives interviewed named cost as the first or second driver influencing their choice of port in South China. One respondent cited “Cost, cost and cost!” as the three top performance benchmarks. Close to 60% of the executives, who source mainly from southern China, already export more than half of their China sourcing via Shenzhen ports. Only 10% do so via the Hong Kong port. 95% believe that more shipments are going to shift to Shenzhen and other China ports from Hong Kong ports in the future. However, 17% of those interviewed claim that they would choose Hong Kong ports over southern China if trucking tariffs were reduced in line with the trucking cost to Shenzhen ports. Hong Kong has advantages such as a higher number of direct calls to the US and Europe; transshipments to Taiwan; and a better capacity for handling specialized goods such as dangerous goods or those which need to be refrigerated. The bulk of the exports are currently from the electrical goods, electronics and toys sectors. These products, along with building materials, furniture and chemicals, have the fastest anticipated future export growth, according to Fusion Consulting. “The electrical, electronics and toys sectors are expected to keep growing. The total number of factories in these sectors only accounts for 30% of all factories in Guangdong, yet they already create nearly 75% of the export value,” said Marine Mallinson, Director of Fusion Consulting in Hong Kong. Guangzhou and Shenzhen now account for more than 50% of Guangdong’s economy. However, Zhongshan, Zhuhai, and Foshan in the western Pearl River Delta (PRD), along with Dongguan and Shenzhen in the eastern PRD, have the strongest future growth dynamics. Zhongshan’s production and export annual growth rates for 2001-2005 are estimated at 32% and 27%, respectively, while Shenzhen’s production growth rate for the same period is forecast at 24% and its export growth rate is 18%. About Fusion Consulting For more information, please contact Fusion Consulting at
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