CHINA has an excess of 50 million TEU container port capacity to actual volumes, according to ports expert with the OECD, Olaf Merk, who pointed out that the capacity surplus is more than the combined throughputs of Japan, South Korea, Taiwan and Russia.
"When looking at what is already in planning, things could get worse, with surplus capacity to reach almost 100 million TEU in 2030," Mr Merk said. The main reason for this overcapacity is the combination of lower trade growth in China and competition between Chinese cities, he said.
The central government has called local provincial government and major ports to optimise operations and capacity through integration.
Zhao Nan, research director at the Shanghai International Shipping Institute (SISI), said restructuring will carry on for years. The Yangtze River ports will also start a new round of mergers and restructuring soon, he said.
Currently a series of sweeping port reorganisations are ongoing across the nation, the Singapore's Splash 24/7 reported.
In 2015, the Zhejiang government started the integration of five major ports in the province including Ningbo Port, Zhoushan Port, Jiaxing Port, Taizhou Port and Wenzhou Port. The government has established a new entity named Zhejiang Port Investment Operation Group (ZPIO) to operate the ports under one platform.
Tianjin Port is currently in collaboration with Heibei Port Group, which operates a number of major ports including Tangshan Port, Huanghua Port and Qinhuangdao Port in Hebei. The two port groups have established a joint venture Bohai Tianjin-Hebei Port Investment and Development Company to jointly invest and operate port terminals.
To the south restructuring is also underway. Xiamen Port and Zhangzhou Port in Fujian, have already completed a merger in 2014, while three major ports in Guangxi, Qinzhou Port, Beihai Port and Fachenggang Port have all been restructured into Guangxi Beibu Gulf Port Group in 2013.
Currently the most complex and difficult port restructuring is in northeast China. Along the short coastline in the Bohai Rim, there are four major listed port companies including Dalian Port, Jinzhou Port and Yingkou Port in Liaoning and Qinhuangdao Port in Hebei.
The government has proposed to establish a provincial port company to operate all the ports under one roof since 2014, however, there hasn't been any progress yet.
James Frew from UK consultants Maritime Strategies International reckons China has some tough choices to make when it comes to remedying its bloated ports scene.
"I don't believe there are easy answers," he says, citing issues of the expansion of neighbouring Busan. The South Korean port expected to take transshipment cargo from China and actually got very little due to the huge expansion of Chinese port capacity.
PORTS
21 August 2016 - 21:29
Drastic action required to deal with China's excess box port capacity
CHINA has an excess of 50 million TEU container port capacity to actual volumes, according to ports expert with the OECD, Olaf Merk, who pointed out that the capacity surplus is more than the combined throughputs of Japan, South Korea, Taiwan and Russia.
PORTS
21 August 2016 - 21:29
Drastic action required to deal with China's excess box port capacity
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